MP Materials just locked in one of the most aggressive public-private deals in the rare earth sector, and the market didn’t blink, it surged. On July 10, the Department of Defense confirmed a $400 million equity investment into MP, instantly making the Pentagon the company’s largest shareholder at 15%. That’s not a grant. That’s ownership. The deal also includes a $150 million loan to expand heavy rare earth separation at Mountain Pass, plus a 10-year price floor commitment of $110 per kilogram for NdPr output. The government is guaranteeing demand and profitability. That’s a national security play, not a speculative bet.
The company’s magnet manufacturing footprint is about to explode. MP Materials will build a second facility, dubbed the “10X plant,” with $1 billion in financing secured from JPMorgan and Goldman Sachs. Once operational in 2028, it will push domestic magnet capacity to 10,000 metric tons annually. That’s enough to supply hundreds of thousands of EVs, defense systems, and industrial applications. The Pentagon has already agreed to purchase 100% of the magnets produced at the new site for a decade. This isn’t a pilot program. It’s a full-scale supply chain overhaul.
Mountain Pass remains the crown jewel. It’s the only operational rare earth mine in the United States and the second-largest globally. The ore there contains 6% to 8% Total Rare Earth Oxide, which is more than double the global average. MP Materials extracts, separates, and refines on-site. That vertical integration is rare. China still controls 90% of global REE processing, but MP is the only U.S. firm positioned to challenge that dominance with a mine-to-magnet model.
The Independence Facility in Texas began commercial NdPr production earlier this year and is now trialing NdFeB magnets. These magnets are essential for EV motors, wind turbines, drones, fighter jets, and more. By Q4 2025, MP expects to shift into full commercial magnet output. GM is already onboard. MP magnets will be in the Hummer EV, Cadillac LYRIQ, Silverado EV, and more than a dozen other models.
The numbers are moving. Q1 2025 NdPr revenue hit $24.32 million, up 192% year-over-year. Production rose 330%. Sales volume jumped 246%. The stock closed at $45.23 today, up 109.56% over the past year. Market cap now sits near $7.4 billion. The DoD’s preferred shares are convertible at $30.03, meaning the government is already sitting on paper gains.
China produced 270,000 tonnes of REOs in 2024, accounting for 69% of global output. The U.S. produced just 45,000 tonnes. That imbalance is why this deal matters. The Pentagon isn’t just investing. It’s anchoring a domestic supply chain that’s been missing for decades. The goal is clear: full independence by 2027.
MP Materials is no longer just a mining company. It’s a strategic asset. The next leg of the rally will likely hinge on commercial magnet output and defense contract execution. If the price dips below $100, it may not stay there long.
Disclaimer: This is not financial advice.
Sources:
https://finance.yahoo.com/news/mp-materials-announces-transformational-public-100000555.html
https://www.fastcompany.com/91366049/mp-materials-stock-surged-more-than-50-this-morning-heres-why