There is only one active rare earth mine in the whole of the United States. As of Friday, the Department of Defense has become the largest shareholder in the company that owns and operates it.
The Pentagon signed a long-term deal with MP Materials on Thursday to give the company hundreds of millions in investments and loans, as well as $1 billion from JPMorgan Chase and Goldman Sachs to fund the construction of a “10X Facility” for rare earth magnet manufacturing. The DoD has also agreed to find a home for 100 percent of the magnets produced at the 10X Facility, either in defense or commercial applications.
Rare earth metals are a set of elements with excellent magnetic qualities and other characteristics that make them a key part of many modern electronics and other technologies. China, unfortunately, has a stranglehold on production and refinement that even MP is unlikely to be able to meet anytime soon – at least not without additional investment.
MP Materials operates the Mountain Pass rare earth mine in southeastern California, where it primarily produces the NdPr oxide (a mix of neodymium and praseodymium oxides critical for high-performance rare-earth magnets). It also processes and produces cerium(III) chloride, a compound with various chemical uses; lanthanum carbonate, used in everything from kidney medicine to water purification; and SEG+, an in-house blend of rare earth elements formulated for downstream refinement and application.
MP chief communications officer Matt Sloustcher told The Register that 15 of the 17 rare earth elements can be found at Mountain Pass.
The DoD’s investments, including sizable stock purchases, warrants to buy additional shares, and government loans, will fund the expansion of MP’s rare earth separation and processing facilities and magnet production.
A price floor commitment from the DoD was also included in the deal, ensuring that MP’s NdPr never earns the company less than $110 a kilogram.
All considered together, Sloustcher told us, it’s a multibillion dollar deal. The position makes the DoD a 15 percent owner of MP – the company’s largest.
The deal comes at the perfect moment for MP, which has for years shipped a portion of its extracted rare earths to China for refinement, via Shenghe Resources, a Chinese rare earth mining company partly owned by the government. MP was forced to pause exports to China in April when Trump’s China tariff tiff flared up, which Sloustcher told us is still the case.
“We are refining about half the concentrate into separated products so the remaining half is now being stockpiled,” the MP comms chief said.
MP’s Chinese exports were a major source of revenue for the company, meaning a shift to US production and consumption was inevitable in the face of an ongoing trade conflict.
That MP stockpile is probably just going to keep growing, however: These sorts of facilities take time to build. MP didn’t specify a date by which it hoped to have additional processing capability online, but it did say the 10X Facility for magnet manufacturing won’t come online until 2028.
10X will boost MP’s magnet production by just that – from 1,000 metric tons a year to 10,000 – but they haven’t even chosen a site for the place yet. ®