MP Materials Corp (MP) Stock: Defense Department Deal Sparks 40% Rally

TLDR

Table of Contents

MP Materials secured a multi-billion dollar deal with the Department of Defense including $400 million equity investment and up to $350 million in additional funding
The company will build a new rare earth magnet manufacturing facility called the ’10X Facility’ expected to be commissioned in 2028
DoD will become MP Materials’ largest shareholder and provided a 10-year price floor commitment of $110 per kilogram for NdPr metal
The agreements include a $150 million loan to expand the company’s Mountain Pass facility in California
MP Materials stock jumped 40-41% in premarket trading following the announcement

MP Materials Corp stock jumped 40% in premarket trading Thursday after announcing a multi-billion dollar partnership with the Department of Defense. The deal positions the Pentagon to become the company’s largest shareholder while accelerating domestic rare earth magnet production.

The defense department will purchase $400 million worth of preferred stock in MP Materials. The agency also secured a warrant as part of the investment structure.

The agreement includes a commitment for up to $350 million in additional funding beyond the initial investment. A separate $150 million loan from the Pentagon will support expansion of the company’s existing Mountain Pass facility in California.

So proud 🇺🇸
MP Materials Announces a Transformational Public-Private Partnership with the U.S. Department of Defense
– Multibillion-dollar DoD commitment
– New “10X” magnet facility to be constructed
– 10-year price floor + offtake agreements
– DoD positioned to become MP’s… pic.twitter.com/wno4MiVCYj
— MP Materials (@MPMaterials) July 10, 2025

MP Materials will use the funding to construct a new domestic magnet manufacturing facility. The company has dubbed this project the ’10X Facility’ though it has not yet selected a location.

The new facility is expected to be commissioned in 2028. It will serve both defense and commercial customers once operational.

Strategic Supply Chain Move

The partnership comes as the U.S. works to reduce foreign dependency on rare earth materials. China currently dominates global rare earth production and holds a virtual monopoly on refining and processing.

Restrictions imposed by China in April caused a 75% drop in rare earth magnet exports from the country last month. The U.S. later signed a separate deal with China to speed up rare earth approvals.

President Donald Trump invoked emergency powers in March to boost domestic production of critical minerals. This move was part of a broader effort to offset China’s near-total control of the rare earth sector.

The DoD provided MP Materials with a 10-year price floor commitment of $110 per kilogram for NdPr metal. NdPr is used to make magnets for electric motors and wind turbines.

All magnets produced under the agreement will be purchased by defense and commercial customers. This arrangement is structured as a 10-year offtake agreement.

Facility Expansion Plans

MP Materials expects to add heavy rare earth separation capabilities at its California-based Mountain Pass facility. The $150 million defense department loan will fund this expansion.

The Mountain Pass mine currently handles the company’s primary mining and processing operations. The facility processes raw ore containing rare earth elements.

Rare earths are a group of 17 metals used to make magnets that convert power into motion. These materials are essential for electric vehicles, cell phones, and other electronics.

The company described rare earth magnets as “one of the most strategically important components in advanced technology systems.” These components span both defense and commercial applications.

MP Materials noted that the U.S. currently relies almost entirely on foreign sources for rare earth magnets. The new agreements aim to change this dependency structure.

The defense department’s investment will fund construction of the new domestic magnet manufacturing facility. It will also support expansion of MP Materials’ current mining and processing capabilities.

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