MP Materials Stock Jumps 44.7% Amid Rare Earth Metals Negotiations

MP Materials stock surged 44.7% in July 2025, driven by the US government's positioning in the rare earth metals industry. The Pentagon acquired up to $400 million of preferred stock in MP Materials, the nation's largest rare earth miner and supplier. This move aims to protect the US' intellectual property and national interests, given the crucial role of rare earth metals in the defense industry. Investors can look into market gauges to determine if MP Materials is done running higher.

The U.S. Department of Defense (DoD) has acquired up to $400 million of preferred stock in MP Materials, the nation's largest rare earth miner and supplier, marking a significant move to bolster the domestic supply chain. The investment, announced on July 10, 2025, aims to enhance the U.S.'s self-sufficiency in rare earth metals, which are critical components in various military weapons systems and advanced technology applications.

MP Materials owns the only operational rare earth mine in the U.S. at Mountain Pass, California. The Pentagon's investment will be used to expand the company's rare earth processing capabilities and magnet production. The company plans to build a second magnet manufacturing facility, known as the "10X Facility," expected to begin commissioning in 2028. This expansion will increase MP Materials' total magnet production capacity to approximately 10,000 metric tons annually [1].

The Pentagon's investment includes a price floor of $110 per kilogram for MP Materials' NdPr products, providing price stability and shielding the industry from market volatility. Additionally, the DoD has committed to purchasing all magnets produced at the 10X Facility for the next decade, ensuring a steady demand for the company's products [2].

The Pentagon's stake in MP Materials will make it the largest shareholder in the company, holding approximately 15% of the outstanding common stock as of July 9, 2025. This strategic partnership comes amidst growing urgency to establish a U.S.-based mine-to-magnet supply chain, especially after China's export restrictions on rare earths in April underscored American vulnerabilities [3].

MP Materials' stock surged 51% on July 2, 2025, following the Pentagon's investment. The company's market capitalization grew to $7.4 billion, an increase of about $2.5 billion from the previous trading session. This significant increase reflects investors' optimism about the company's expanded production capabilities and the Pentagon's support for the domestic rare earth supply chain [1].

The Pentagon's investment in MP Materials is part of a broader effort by the U.S. government to reduce its dependence on foreign countries for critical minerals. This strategic partnership aims to strengthen supply chain security and support dual-use technologies for both defense and commercial markets. Investors can look into market gauges to determine if MP Materials is done running higher, given the company's expanded production capacity and the Pentagon's long-term commitment to its success.

References:
[1] https://www.cnbc.com/2025/07/10/pentagon-to-become-largest-shareholder-in-rare-earth-magnet-maker-mp-materials.html
[2] https://www.ainvest.com/news/mp-materials-sees-51-surge-stock-defense-pact-rare-earth-magnet-production-2507/
[3] https://cen.acs.org/business/investment/US-invests-rare-earth-firm/103/web/2025/07?sc=230901_cenrssfeed_eng_latestnewsrss_cen