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5d ago

Pentagon Invests $400M in MP Materials to Anchor U.S. Rare Earth Magnet Supply

The DoD’s equity purchase underwrites a decade-long purchase guarantee for a planned 10,000-ton magnet plant aimed at reducing Chinese dominance.

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A view of mining facilities at the MP Materials rare earth mine in Mountain Pass, California, U.S. January 30, 2020. Picture taken January 30, 2020. REUTERS/Steve Marcus/File Photo
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Overview

  • The Department of Defense will invest $400 million in preferred stock of MP Materials to acquire roughly a 15% ownership stake.
  • The agreement includes a 10-year contract to purchase 100% of output from the planned “10X” magnet facility at a price floor of $110 per kilogram of neodymium-praseodymium.
  • Proceeds from the Pentagon investment and a $1 billion financing package from JPMorgan Chase and Goldman Sachs will fund a second U.S. magnet plant and expanded rare earth processing at Mountain Pass, California.
  • The “10X” facility is slated to begin commissioning in 2028 and aims to add 10,000 metric tons of annual magnet capacity to the U.S. supply chain.
  • China supplied about 70% of U.S. rare earth imports in 2023 and controls about 90% of global processing capacity, highlighting the strategic need for a domestic mine-to-magnet chain.