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4d ago

Pentagon Takes 15% Stake in MP Materials to Secure Rare Earth Magnet Supply

It comes with a decade-long commitment to purchase all magnets from the planned 10X facility at a floor price of $110 per kilogram.

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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 Defense Department agreed to invest $400 million in convertible preferred stock and warrants in MP Materials, making it the company’s largest shareholder with about a 15 percent stake.
  • Under the deal, the Pentagon will buy 100 percent of neodymium-praseodymium magnets from MP’s planned 10X plant over ten years at a guaranteed minimum price of $110 per kilogram.
  • MP Materials will use the Pentagon funds alongside $1 billion in financing from JPMorgan Chase and Goldman Sachs and a $150 million DoD loan to expand processing at Mountain Pass and build the 10X facility.
  • This public–private partnership advances President Trump’s strategy to end U.S. reliance on Chinese rare earth exports, which supplied roughly 70 percent of America’s rare earth needs in 2023.
  • Rare earth magnets from the new supply chain are vital for U.S. military systems—including drones, submarines and the F-35 fighter jet—and for key high-tech industries.