Rare earth magnet producer MP Materials Corp. secured a $400 million equity investment from the US Department of Defense to build a new plant, with a $1 billion financing commitment from JPMorgan Chase & Co. and Goldman Sachs Group Inc. The shares soared.
The operator of the US’s sole rare earth mine in Mountain Pass, California, will construct a second magnet manufacturing plant, called the 10X Facility, at a “soon-to-be-chosen” location, the company said in a statement. It jumped almost 50% in pre-market trading.
The US has long been reliant on China for rare earths — something the Asian country used to its advantage in responding to the trade war initiated by President Donald Trump. China leveraged its dominance of the supply chain to retaliate against American tariffs, adding impetus to US efforts to build up a domestic alternative.
With the purchase of a 15% stake, the Pentagon will become MP’s largest shareholder. The Pentagon also agreed to purchase any of the plant’s neodymium-praseodymium products at a floor price of $110 per kilogram. The new facility is expected to begin commissioning in 2028, the company said, and will boost US magnet output to 10,000 metric tons a year.
In addition to the Pentagon’s investment, units of JPMorgan and Goldman committed to $1 billion of financing for the costs of constructing and developing the facility.
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