MP Materials Partners with DoD to Boost Rare Earth Magnet Supply, Stocks Surge

MP Materials has partnered with the Department of Defense to boost US rare earth magnet supply, leading to a surge in shares. The company produces specialty materials crucial for electrification and advanced technologies, operates the Mountain Pass Rare Earth Mine and Processing Facility, and is constructing a manufacturing facility in Fort Worth, Texas. MP Materials is also producing separated rare earth products, including neodymium-praseodymium (NdPr) oxide, under an exclusive distributorship agreement with Sumitomo.

MP Materials Corp. (NYSE: MP) has announced a transformational public-private partnership with the U.S. Department of Defense (DoD) aimed at significantly boosting the domestic production of rare earth magnets. This strategic collaboration, which includes a multibillion-dollar investment package from the DoD, aims to reduce the country's dependency on foreign sources for these critical materials.

The partnership involves the construction of a new magnet manufacturing facility, dubbed the "10X Facility," which is expected to be operational by 2028. This facility will complement MP Materials' existing operations at Mountain Pass, California, and its magnetics facility in Fort Worth, Texas. The new facility is projected to increase the company's total U.S. rare earth magnet manufacturing capacity to 10,000 metric tons.

In addition to the new facility, MP Materials will expand its heavy rare earth separation capabilities at Mountain Pass. This move solidifies the company's position as a national strategic asset, ensuring that high-purity rare earth materials are extracted, separated, and refined in one location.

The agreement between MP Materials and DoD includes a 10-year NdPr price floor commitment of $110 per kilogram and a 10-year magnet offtake agreement, ensuring stable and predictable cash flow for MP Materials. DoD has also agreed to purchase $400 million of the company's preferred stock, making it the largest shareholder.

The partnership is a significant step towards achieving U.S. independence in rare earth magnet production. Rare earth magnets are crucial components in advanced technology systems, including defense and commercial applications. The U.S. currently relies almost entirely on foreign sources for these materials, making this strategic partnership a critical initiative.

The agreement also includes commitments from JPMorgan Chase Funding Inc. and Goldman Sachs Bank USA, totaling $1.0 billion in financing for the 10X Facility. Additionally, DoD has committed to a $150 million loan to expand heavy rare earth separation capabilities at Mountain Pass.

MP Materials will hold an investor conference call on July 10, 2025, at 8:30 a.m. Eastern Time, to provide additional details about the partnership and the agreements with DoD. The call can be accessed through MP Materials' investor relations page or by dialing 1-646-876-9923 with the meeting ID: 96410701710 and passcode: 978482.

The partnership underscores MP Materials' commitment to strengthening the U.S. supply chain and ensuring the availability of critical materials for high-growth industries and future dual-use applications.

References:
[1] https://www.morningstar.com/news/business-wire/20250710526348/mp-materials-announces-transformational-public-private-partnership-with-the-department-of-defense-to-accelerate-us-rare-earth-magnet-independence