The Defense Department has become the largest shareholder of a California rare earth mine critical for military technology.
The agreement, considered a “transformational public-private partnership” by MP Materials Corporation, will “dramatically accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain and reduce foreign dependency,” the company said.
“With a multibillion-dollar package of investments and long-term commitments from DoD, MP Materials will construct the Company’s second domestic magnet manufacturing facility (the ’10X Facility’) at a soon-to-be-chosen location to serve both defense and commercial customers,” MP Materials explained. When the facility is completed, the nation’s rare earth magnet manufacturing capacity is expected to reach an estimated 10,000 metric tons.
James Litinsky, founder, chairman, and CEO of MP Materials, said the initiative is 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,” Litinsky stated.
The DOD’s 10-year agreement establishes a “price floor commitment of $110 per kilogram for MP Materials’ NdPr products stockpiled or sold, reducing vulnerability to non-market forces and ensuring stable and predictable cash flow with shared upside,” the company noted. The Defense Department also agreed to purchase $400 million of a “newly-created series of the Company’s preferred stock convertible into shares of the Company’s common stock, and a warrant permitting DoD to purchase additional shares of the Company’s common stock.”
Separately, a new rare earth mineral mine is scheduled to open in Wyoming on July 11.
