Pentagon Takes 15% Stake in MP Materials Deal

MP Materials has formed a landmark public-private partnership with the U.S. Department of Defense, which will become its largest shareholder through a $400 million preferred stock investment representing a 15% stake. This investment, along with $1 billion in financing from JPMorgan and Goldman Sachs, will fund the construction of MP's second U.S. magnet manufacturing plant, known as the '10X Facility,' set to begin operations in 2028 and increasing domestic magnet production to 10,000 metric tons annually. The agreement includes a decade-long price floor and guarantees the government 100% of the new facility's magnet output for ten years, ensuring a stable rare earth supply for defense and commercial use. Upgrades at MP's Mountain Pass mine in California will add heavy rare earth separation capabilities, further strengthening U.S. strategic independence. The initiative directly challenges China's dominance in the rare earth sector. News of the deal caused MP Materials shares to surge, highlighting market confidence in the move.