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yesterday

Pentagon to Acquire 15% of MP Materials in $400M Rare Earth Investment

Completing today, the Pentagon’s stake marks a key step toward a resilient U.S. rare earth mine-to-magnet supply chain

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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 become MP Materials’ largest shareholder after closing a $400 million preferred-stock purchase for a roughly 15% stake
  • The agreement secures a 10-year offtake commitment at a price floor of $110 per kilogram for neodymium-praseodymium magnets
  • MP Materials will deploy the Pentagon funding alongside a $1 billion financing package arranged by JPMorgan Chase and Goldman Sachs to expand heavy rare earth separation and build a second U.S. magnet plant
  • The new “10X” magnet facility is slated to begin commissioning in 2028, boosting annual U.S. magnet output by 10,000 metric tons
  • Shares of MP Materials surged nearly 50% in premarket trading on Thursday, reflecting investor confidence in the strengthened domestic supply chain