MP Materials announces transformational partnership with the US Department of Defense
A strategic leap toward rare earth independence
Today, MP Materials announced a landmark public-private partnership with the US Department of Defense (DoD), a multibillion-dollar commitment poised to reshape the global rare earth magnet supply chain and bolster US industrial resilience.
This strategic alliance, described as a “transformational” milestone by MP Materials, underscores the urgency of reducing foreign dependency on critical materials, particularly in light of China’s dominance in rare earth production and recent export restrictions.
The deal positions MP Materials as a national champion in the rare earth sector, aligning with the Trump administration’s push for supply chain independence.
Below, we dissect the key components of this agreement, its implications for the US rare earth market and its broader geopolitical and industrial significance.
The deal at a glance: Building the “10X Facility” and beyond
At the heart of the partnership is the construction of MP Materials’ second domestic magnet manufacturing facility, dubbed the “10X Facility,” which is expected to commence commissioning in 2028.
This state-of-the-art plant, with a yet-to-be-disclosed location, will propel MP’s US rare earth magnet production capacity to an estimated 10,000 tonnes annually – enough to future proof US supplies for both defense and commercial applications, from electric vehicles to robotics to military systems and beyond.
The DoD’s financial backing includes a $400 million purchase of convertible preferred stock, accompanied by a warrant to acquire additional common shares at $30.03 per share – a first of its kind deal in modern times to our knowledge. Upon conversion, this could position the DoD as MP’s largest shareholder, holding approximately 15% of the company’s outstanding shares.
The agreement also secures a 10-year neodymium-praseodymium (NdPr) price floor of $110 per kilogram, shielding MP from market volatility and ensuring stable cash flows.
NdPr, the primary rare earth input used to produce high-performance neodymium-iron-boron (NdFeB) magnets, is critical to a growing list of advanced technologies.
Additionally, a 10-year offtake agreement guarantees that 100% of the magnets produced at the 10X facility will be purchased by defense and commercial customers, de-risking the project’s economics. To enforce these higher price levels, we expect the US may look to dial-in its tariff regime on China to fend off lower-priced supplies, as well as allies if they remain open to China.
To further enhance its vertically integrated model, MP Materials will expand heavy rare earth separation capabilities at its Mountain Pass mine in California, supported by a $150 million DoD loan expected within 30 days.
Financing for the 10X facility is underpinned by a $1 billion commitment from JPMorgan Chase and Goldman Sachs, ensuring robust capital for this ambitious expansion.
Strategic context: Countering China’s rare earth dominance
The timing of this partnership is critical. China, which controls roughly 90% of global rare earth magnet supply, imposed restrictions in April 2025 that triggered a 75% drop in magnet exports, exposing glaring vulnerabilities in US supply chains.
Rare earths, a group of 17 metals, are indispensable for technologies ranging from F-35 fighter jets to smartphones and renewable energy systems. The DoD’s investment reflects a broader US strategy to counter China’s near-monopoly, especially as geopolitical tensions and tariff disputes go unresolved.
The Trump administration’s invocation of emergency powers in March 2025 to boost domestic critical mineral production further underscores the national security imperative driving this deal.
MP Materials, already the operator of the world’s second-largest rare earth mine at Mountain Pass, is uniquely positioned to lead this charge. Since resuming operations in 2017 and initiating refining in 2023, the company has built an integrated supply chain spanning mining, separation, metal making and magnet production.
Its Texas-based “Independence” facility, set to supply magnets to General Motors by year-end, complements the 10X facility’s future output, creating a massive mine-to-magnet ecosystem.
The addition of heavy rare earth separation at Mountain Pass will further diversify MP’s capabilities, enabling domestic production of specialized materials critical for defense applications.
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Market and economic implications
The DoD’s price floor and offtake commitments mitigate financial risks, while projected double-digit annual growth in rare earth magnet demand through 2030 – driven by electric vehicle, robotics and more – positions MP to capture significant market share in the US.
The DoD’s backing, likened by analysts to CHIPS Act-level support, provides a strong foundation for overcoming potential regulatory hurdles and market risks.
Overall, we expect the deal to be a positive for the rare earth industry outside China broadly resulting in the imposition and adoption of floor prices for critical rare earths coupled with tariff regimes to enforce them.
Although elevated prices may prompt some end-users to explore alternatives, this shift will free up rare earth supplies for mission-critical sectors like robotics, aerospace, and defense, ensuring availability in a future marked otherwise by constrained global supply.
A new era for US rare earths
MP Materials’ partnership with the DoD is a bold step toward rare earth independence, marrying defense priorities with commercial scalability.
By 2028, the 10X Facility could make MP one of the world’s largest vertically integrated magnet producers, challenging China’s dominance and securing critical materials for US innovation.
As CEO James Litinsky noted, this is “decisive action” by the Trump administration, signaling a commitment to industrial policy that rivals major legislative efforts.
For investors, policymakers and industry stakeholders alike, this deal marks a pivotal moment in the quest for a resilient, domestic rare earth supply chain – one that promises both economic opportunity and strategic security.
Meet with alternative rare earth and magnet suppliers
In September 2025, Adamas Intelligence will host Rare Earth Mines, Magnets & Motors 2025 in Toronto, an exclusive summit for the mine-to-application supply chain.
With China recently imposing stringent export controls, this two-day congress offers a unique, one-stop opportunity for end-users to hear from and connect with leading players from alternative and emerging rare earth supply chains.
Expect world-class speakers, actionable insights and unmatched networking opportunities.
Key themes for 2025 include robotics, advanced air mobility, and defense tech, along with the emerging alternative supply chain coming together upstream.
From Horizon Aircraft’s Cavorite X7 prototype on-site to a live demonstration of Boston Dynamics’ Spot robot on stage, the conference will showcase cutting-edge applications of rare earth permanent magnets like no other.
Beyond the conference program, two networking events, including a private Welcome Reception at the Hockey Hall of Fame, will help suppliers, investors and end-users foster valuable and enduring connections.
“Following the success of our inaugural event, we’re elevating the 2025 summit to deliver unmatched insights and networking opportunities,” said Ryan Castilloux, Managing Director at Adamas Intelligence. “From an inspirational fireside chat with tech-icon Steve Wozniak to live demonstrations of transformative technologies, this is a must-attend event for the rare supply chain and the end-users it serves.”
Register now at adamasevent.com to secure your spot and join the conversation shaping the future of the mine-to-magnet supply chain.
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