MP Materials has partnered with the United States Department of Defense (DoD) to develop a comprehensive US rare earth magnet supply chain, aiming to lessen reliance on foreign sources.
The initiative includes a multibillion-dollar investment package and long-term commitments from the DoD.
MP Materials plans to build its second US magnet manufacturing facility, named the “10X Facility,” at a location yet to be determined.
The facility, expected to start operations in 2028, will increase MP Materials’ domestic magnet production capacity to approximately 10,000 metric tons.
The company also plans to enhance its heavy rare earth separation capabilities at its Mountain Pass, California, site.
MP Materials founder, chairman, and CEO James Litinsky said: “This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence.
“We are proud to enter into this transformational public-private partnership and are deeply grateful to President Trump, our partners at the Pentagon, and our employees, customers and stakeholders for their unwavering support and dedication.”
This development will further establish Mountain Pass as a key national asset for extracting, separating, and refining high-purity rare earth materials. Rare earth magnets are critical components in advanced technology systems used in both defence and commercial sectors.
The agreement includes a long-term package of convertible preferred equity, warrants, loans, and price floor and offtake commitments, extending over a decade.
The DoD has committed to a 10-year agreement with a price floor of $110 per kilogram for MP Materials’ NdPr products. This agreement aims to reduce exposure to market fluctuations and ensure stable cash flow.
Furthermore, for ten years following the 10X Facility’s construction, the DoD will guarantee that all magnets produced will be purchased by defence and commercial clients.
MP Materials has secured a $1bn financing commitment from JPMorgan Chase Funding and Goldman Sachs Bank USA for the 10X Facility’s construction and development, subject to standard conditions.
Additionally, the company expects to receive a $150m loan from the DoD within 30 days to expand its heavy rare earth separation capabilities at Mountain Pass.
As part of the agreement, the DoD will purchase $400 million of newly created preferred stock, convertible into common stock, with an initial conversion price of $30.03 per share. This purchase is set to close on 11 July 2025.
The DoD’s strategic investment positions it to become MP Materials’ largest shareholder, potentially holding 15% of the company’s shares on an as-converted and as-exercised basis by July 2025.
MP Materials operates the world’s second-largest rare earth mine at Mountain Pass and is commissioning a magnetics facility in Texas, known as Independence, to bolster its downstream capabilities.
