The Nevada-based rare earth company MP Materials (MP) has landed significant investments from two very big names from two very different sectors, a clear sign that the mining of these metals is now front and center of the geopolitical landscape.
MP Materials announced last week that it has entered into a 10-year public-private relationship with the Department of Defense (DoD) to accelerate rare earth mining in the U.S.
The multibillion dollar package will allow MP Materials to construct its second domestic magnet manufacturing facility – called the 10X Facility – at a soon-to-be-named location that will serve both defense and commercial customers.
The new facility is expected to begin commissioning in 2028, bringing MP Materials’ total U.S. rare earth magnet manufacturing capacity to an estimated 10,000 metric tons.
As part of the agreement, the DoD has agreed to purchase $400 million of a newly-created series of the MP Material’s preferred stock, which is convertible into shares of the company’s common stock.
There is also an option for the DoD to purchase additional shares of the company’s common stock.
The initial conversion price and exercise price are $30.03 per share of common stock. The purchase closed on July 11.
This investment makes the DoD the largest shareholder of MP materials.
MP Materials said it intends to use the proceeds to expand its existing rare earths separation and processing capabilities, as well as its magnet production capacity.
The agreement also establishes a price floor commitment from the DoD of $110 per kilogram for MP Materials’ NdPr products stockpiled or sold, which is meant to reduce vulnerability to non-market forces and ensure stable and predictable cash flow for the company with shared upside.
And for a period of 10 years following the construction of the 10X Facility, DoD has agreed to ensure that 100% of the magnets produced at the 10X Facility will be purchased by defense and commercial customers with shared upside.
MP Materials has also secured $1 billion of financing from Goldman Sachs (GS) and JPMorgan Chase (JPM) for the construction of the 10X Facility.
“This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence,” MP Materials founder and CEO James Litinsky said in a statement.
“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.”
Cutting into China’s dominance
Rare earths are the key building block of modern tech, powering everything from electric vehicles and semiconductors to robotics and missile guidance systems.
However, China controls nearly 90% of global production.
This imbalance came to the forefront when Beijing cut off rare earth exports earlier this year as retaliation for President Trump’s tariffs.
The metal’s importance to the tech industry – they’re necessary for building iPhones, for one – has led Apple (AAPL) to enter into a $500-million long-term partnership agreement with MP Materials.
The agreement calls for MP Materials to supply Apple with magnets produced at its Fort Worth, Texas, facility—known as Independence—using recycled rare earth feedstock processed at MP’s Mountain Pass site in California.
The feedstock will be sourced from post-industrial and end-of-life magnets, helping to bolster a sustainable, domestic supply chain.
Magnet shipments are expected to begin in 2027.
The investment from Apple will also help MP Materials significantly expand its facility in Texas, the company noted.
Litinsky said in a statement that the “collaboration deepens our vertical integration, strengthens supply chain resilience, and reinforces America’s industrial capacity at a pivotal moment.”
MP Materials stock gained 11.8% on Tuesday and has soared 286.4% YTD.
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