MP Materials Corp. (NYSE: MP) witnessed an extraordinary surge of over 50% in intraday trading today after announcing a transformative, government-backed initiative aimed at revitalizing the United States’ rare earth magnet supply chain.
The agreement, forged with the U.S. Department of Defense (DoD), underscores Washington’s growing urgency to reduce dependency on China for critical materials that power everything from fighter jets to electric vehicles.
A Strategic Public–Private Partnership
At the heart of the announcement is a $400 million investment by the DoD in MP Materials through the purchase of convertible preferred shares.
The move grants the government a 15% equity stake in the Las Vegas–based company, while an additional $150 million loan facility and structured warrants position the firm for rapid expansion.
As part of the deal, the Pentagon has guaranteed a 10-year price floor of $110 per kilogram for neodymium and praseodymium (NdPr)—key ingredients in permanent magnets.
This provision not only shields MP Materials from global price volatility but also reflects the U.S. government’s firm commitment to building a self-sufficient and secure domestic magnet ecosystem.
Magnet Manufacturing Expansion
MP Materials will use the funding to construct a second, large-scale magnet production facility in the United States, with plans to commission the plant by 2028.
The company also announced it will accelerate the scale-up of its existing rare earth production operations at the Mountain Pass site in California—the only integrated rare earth mining and processing facility currently operating in North America.
According to company officials, the new facility—dubbed the “10X Plant”—is expected to increase production capacity tenfold, positioning the U.S. as a serious global competitor in the magnet manufacturing sector.
National Security Meets Industrial Policy
The Pentagon’s direct involvement in MP Materials represents a rare fusion of industrial and defense policy. Analysts say it’s a bold step to counter China’s near-monopoly on rare earth refining and magnet production, which has long been viewed as a strategic vulnerability for the West.
“This is not just an investment in a company—it’s an investment in America’s industrial future,” said CEO James Litinsky in a statement. “We’re building the foundation for long-term technological and national security independence.”
In a corresponding agreement, the U.S. government has secured a 10-year offtake deal for domestically produced NdFeB magnets, ensuring consistent demand and a strong revenue pipeline for MP.
Market Reaction
The market responded with enthusiasm. MP stock opened at $31.55 and surged to an intraday high of $49.95 before settling around $45 by midday.
The rally marked the stock’s highest level since early 2022, reversing what had been a sluggish performance earlier this year.
Despite the impressive gains, some analysts urged caution. Jefferies downgraded the stock to “Hold,” citing the need for clearer revenue trajectories and execution timelines. “The fundamentals are improving, but the valuation is catching up fast,” the note read.
A Rare-Earth Renaissance?
MP Materials’ meteoric rise comes amid a broader push to onshore critical mineral supply chains.
With the backing of financial heavyweights like JPMorgan and Goldman Sachs—who have pledged up to $1 billion in total project financing—the company appears well-positioned to lead a new era of U.S.-based rare earth manufacturing.
The long-term implications of today’s announcement are profound.
If successful, MP Materials could become the centerpiece of a revitalized American rare earth supply chain—capable of supplying critical technologies for defense, energy, and transportation without foreign dependence.
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