The US Department of Defense has acquired a 15% stake in America’s only operational rare earth mine, MP Materials, located in California. This move aims to enhance the country’s energy security and reduce dependence on imports from China.
Rare earth metals are crucial for making high-grade magnets used in military systems, jets, and ships. The Pentagon maintains significant stores of these minerals but faces a national security risk due to China’s dominance in refining and processing rare earths.
The move follows President Trump’s executive order in April 2025 directing cabinet officials to take action on energy security. MP Materials is a fully integrated operation that also refines and manufactures magnets at its California site. The company was created in 2017 to acquire and restart the Mountain Pass mining operation, which dominated global rare earth production from the 1960s until the 1990s.
The deal involves the Pentagon investing in preferred shares and warrants convertible into MP Materials’ common stock, guaranteeing a minimum price of $110 per kilogram for neodymium-praseodymium oxide produced at the facility. JP Morgan and Goldman Sachs have pledged $1 billion in financial support for the expansion of the site’s manufacturing facility.
The move represents another example of the administration moving quickly to keep a promise made by candidate Trump during his 2024 presidential campaign, as Interior Secretary Doug Burgum advocated for direct investments in critical energy resources and the establishment of a US sovereign wealth fund.
Source: https://www.forbes.com/sites/davidblackmon/2025/07/12/the-pentagons-bold-move-to-secure-us-rare-earth-mineral-needs