The US Department of Defense (DoD) is investing $600 million in rare earths mine MP Materials, becoming the largest shareholder in the company. The deal aims to boost US production of rare earth magnets and loosen China’s dominance in the sector.
Under the agreement, the DoD will guarantee a floor price of $110 per kilogram for two key rare earths, nearly twice the current Chinese market price. This move is expected to stimulate investment in the US industry and increase domestic production capacity.
MP Materials operates the only US rare earths mine and has been working to boost domestic processing and magnet production. The company plans to build a new factory for rare earth magnets, which will produce 10,000 metric tons of magnets per year, starting in 2028.
The deal is seen as a significant step towards increasing US self-sufficiency in critical minerals and reducing reliance on China. However, the long-term viability of the agreement depends on continued funding from Congress.
MP Materials’ shares surged nearly 50% following the news of the deal, with the company’s CEO stating that the investment will meet an important national security need while maintaining the company’s free market approach.
Source: https://www.reuters.com/business/mp-materials-partners-with-department-defense-boost-us-rare-earth-magnet-supply-2025-07-10