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4d ago

Pentagon Takes 15% Stake in MP Materials to Secure U.S. Rare Earth Supply

The agreement secures a 10-year commitment to purchase all magnets from a planned 10X plant at a set price underwritten by DoD loans with bank financing to boost domestic processing capacity

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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 will invest $400 million in preferred stock to become MP Materials’ largest shareholder with a 15% stake.
  • The Pentagon guaranteed purchase of 100% of magnets from the planned 10X facility for 10 years at a $110 per kilogram floor price.
  • The deal includes a $150 million Defense Department loan and a $1 billion financing package arranged by JPMorgan Chase and Goldman Sachs.
  • MP Materials will use the proceeds to expand heavy rare earth separation at Mountain Pass, California, and to commission the 10X magnet plant in 2028.
  • The partnership aims to break China’s near-monopoly by building a sovereign U.S. mine-to-magnet supply chain for defense systems and clean-energy technologies.