MP Materials announced in a press release that it has entered a landmark public-private partnership with the U.S. Department of Defense to build a secure, domestic supply chain for rare earth magnets and reduce dependence on foreign sources. Supported by multibillion-dollar investments and long-term commitments, the agreement includes construction of a second U.S.-based magnet manufacturing facility—dubbed the “10X Facility”—expected to begin commissioning in 2028 and expand total capacity to 10,000 metric tons annually. The partnership will also enhance rare earth processing at the company’s Mountain Pass, California site. As part of the deal, the DoD will invest over $400 million, commit to magnet purchases, offer price guarantees, and provide financing, positioning the department to become MP Materials’ largest shareholder. They write:
Multibillion-Dollar DoD Commitment to MP Materials to Catalyze Domestic Production; DoD Positioned to Become Company’s Largest Shareholder
Building on MP’s Existing Capabilities at Mountain Pass and Magnetics Operations in Texas, Company to Rapidly Construct ”10X” Magnet Manufacturing Facility to Reduce Foreign Dependency
10-year NdPr Price Floor Commitment and 10-year Magnet Offtake Agreement Positions MP as a National Champion with a Durable and Scalable Economic Platform
Company to Host Investor Conference Call Today at 8:30 a.m. Eastern Time
LAS VEGAS—MP Materials Corp. (NYSE: MP) (“MP Materials” or the “Company”) today announced it has entered into a transformational public-private partnership with the United States Department of Defense (“DoD”) to dramatically accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain and reduce foreign dependency.
With a multibillion-dollar package of investments and long-term commitments from DoD, MP Materials will construct the Company’s second domestic magnet manufacturing facility (the “10X Facility”) at a soon-to-be-chosen location to serve both defense and commercial customers. Once the new facility is completed, expected to begin commissioning in 2028, MP Materials’ total U.S. rare earth magnet manufacturing capacity will reach an estimated 10,000 metric tons.
The Company also expects to add additional heavy rare earth separation capabilities at its Mountain Pass, California, facility, solidifying its status as a national strategic asset where high-purity rare earth materials are extracted, separated and refined all in one location.
“This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence,” said James Litinsky, Founder, Chairman, and CEO of MP Materials. “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.”
Rare earth magnets are one of the most strategically important components in advanced technology systems spanning defense and commercial applications. Yet today, the U.S. relies almost entirely on foreign sources. This strategic partnership builds on MP Materials’ operational foundation to catalyze domestic production, strengthen industrial resilience, and secure critical supply chains for high-growth industries and future dual use applications.
The agreements comprise a comprehensive, long-term package – including convertible preferred equity, warrants, loans, and price floor and offtake commitments – that extend for more than a decade.
- DoD has entered into a 10-year agreement establishing a price floor commitment of $110 per kilogram for MP Materials’ NdPr products stockpiled or sold, reducing vulnerability to non-market forces and ensuring stable and predictable cash flow with shared upside.
- 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.
- The Company has obtained a commitment letter from JPMorgan Chase Funding Inc. and Goldman Sachs Bank USA to provide $1.0 billion of financing for the costs of constructing and developing the 10X Facility, subject to customary terms and conditions set forth therein. In addition, within 30 days, the Company expects to receive the proceeds of a $150 million loan from DoD in connection with its plan to expand its heavy rare earth separation capabilities at Mountain Pass.
- As part of the agreement, DoD agreed to purchase $400 million of a newly-created series of the Company’s preferred stock convertible into shares of the Company’s common stock, and a warrant permitting 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 is scheduled to close on July 11, 2025. The Company intends to use the proceeds of this investment to expand its existing rare earths separation and processing capabilities, as well as its magnet production capacity.
- As a result of the strategic investment, DoD is positioned to become the Company’s largest shareholder. On an as-converted and as-exercised basis, the convertible preferred stock and the warrant represent, in the aggregate, 15% of the Company’s issued and outstanding shares of common stock as of July 9, 2025, without giving effect to the issuance of such shares.
MP Materials currently operates the world’s second-largest rare earth mine in Mountain Pass, California, where it extracts, refines, and separates rare earth materials. The Company is commissioning a magnetics facility in Texas, known as Independence, which anchors its downstream capabilities.
Skadden, Arps, Slate, Meagher & Flom LLP and Crowell & Moring LLP acted as legal advisors, and J.P. Morgan Securities LLC acted as exclusive financial advisor to MP Materials.
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