Pentagon becomes largest shareholder in rare earth mining company

MP Materials announced on Thursday that the Department of Defense is set to become the largest shareholder in the rare earth mining company after finalizing an agreement to purchase $400 million of the company’s preferred stock.

In a Thursday press release, MP Materials confirmed it has “entered into a transformational public-private partnership” with the Department of Defense to “dramatically accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain and reduce foreign dependency.”

“This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence,” MP Materials founder and CEO James Litinsky said. “We are proud to enter into this transformational public-private partnership and are deeply grateful to President Trump, our partners at the Pentagon, and our employees, customers and stakeholders for their unwavering support and dedication.”

According to CNBC News, MP Materials owns the only rare earth mine that is currently operational in the United States. The outlet noted that its rare earth mine is located in Mountain Pass, California.

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The rare earth mining company announced that with the Defense Department’s new investments, MP Materials will construct a second domestic magnet manufacturing facility that will be used for commercial and defense customers. The company noted that after the facility is constructed, its “total U.S. rare earth magnet manufacturing capacity will reach an estimated 10,000 metric tons.”

In Thursday’s press release, MP Materials explained that rare earth magnets are “one of the most strategically important components in advanced technology systems” for both commercial and defense use. The company noted that the United States is currently almost completely reliant on “foreign sources” for rare earth magnets.

The Defense Department previously emphasized the importance of rare earth materials, which are used in a variety of military weapons systems, such as the F-35 fighter jet, submarines, and drones. The U.S. Geological Survey reported that the United States heavily relied on foreign countries for rare earth imports in 2023 and that China accounted for roughly 70% of the imports.

Addressing the new partnership with the Defense Department, MP Materials stated, “This strategic partnership builds on MP Materials’ operational foundation to catalyze domestic production, strengthen industrial resilience, and secure critical supply chains for high-growth industries and future dual use applications.”