Key Highlights
- MP Materials has secured a significant rare-earths supply agreement with an undisclosed automaker identified only as “one of America’s leading industrial and technology companies”
- The agreement involves supplying neodymium-praseodymium oxide, an essential component for electric motor production
- The company plans to pour more than $1.25 billion into developing a magnet manufacturing campus dubbed “10X” in Northlake, Texas
- The new Texas campus is projected to generate over 1,500 jobs and begin operations in 2028, with annual production targets of approximately 10,000 metric tons of rare earth magnets
- Following a $400 million equity investment in 2024, the Department of Defense now owns a 15% stake in MP Materials
MP Materials announced Thursday that it has finalized a rare-earths supply agreement with an unnamed automotive manufacturer, disclosing the news alongside fourth-quarter financial results that surpassed Wall Street expectations.
The agreement focuses on neodymium-praseodymium oxide, a critical material for manufacturing electric motors. While the company described the unnamed partner as “one of America’s leading industrial and technology companies,” it declined to reveal the buyer’s identity or disclose financial terms.
During the earnings call, CEO James Litinsky emphasized strong demand throughout the supply chain. “We’re having a lot of conversations,” he noted.
MP Materials has previously established a comprehensive supply arrangement with General Motors that encompasses rare earth materials, alloys, and finished magnets, meaning this latest agreement represents the company’s second significant automotive partnership.
Alongside the earnings report, MP Materials unveiled plans for substantial capital deployment. The company announced it will spend over $1.25 billion developing a rare-earth magnet manufacturing campus in Northlake, Texas.
Dubbed “10X,” the campus represents an expansion of the company’s existing Fort Worth operations, solidifying a substantial North Texas presence for America’s sole domestic rare earth mineral producer.
The facility is scheduled to commence operations in 2028. Upon completion, it will elevate MP Materials’ aggregate production capacity to approximately 10,000 metric tons of rare earth magnets annually.
The company anticipates creating more than 1,500 direct manufacturing and engineering positions at the location. Engineering work and equipment sourcing have already begun.
Defense Department Partnership
The Texas manufacturing facility stems directly from MP Materials’ collaboration with the U.S. Department of Defense. Last July, the Pentagon acquired a 15% ownership stake in the company through a $400 million equity investment.
Under that arrangement, MP Materials committed to constructing a new manufacturing facility capable of producing rare earth magnets on a scale dramatically exceeding current domestic production levels ā specifically designed to diminish reliance on Chinese suppliers.
Rare earth magnets serve critical functions in automobiles, wind energy systems, fighter aircraft, and missile technology, positioning them at the center of ongoing U.S.-China trade tensions.
Chinese Export Restrictions
Beijing implemented rare-earth export restrictions following President Trump’s imposition of aggressive tariffs on Chinese imports last April. Although a trade agreement was negotiated in June, supply chain uncertainties persist.
This environment has intensified pressure on American manufacturers to identify domestic supply sources, and MP Materials remains the only U.S. company conducting rare earth mining operations at commercial scale.
Litinsky suggested it would be “natural to conclude” that the 10X facility will generate multiple supply agreements upon becoming operational.
The company is actively negotiating with additional firms regarding magnet supply from the Texas plant, though no additional contracts have been finalized.
Fourth-quarter financial performance exceeded analyst projections, providing the company with strong financial positioning as it enters an intensive investment phase.
MP Materials stock was valued at $59.97, declining 0.15%, at press time.
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