The Pentagon announced Thursday that it will acquire a 15% stake in rare-earth mining company MP Materials as the United States seeks to avoid dependence on China for the critical elements of technology.
The multibillion-dollar agreement will enable MP Materials to drastically increase its output of lightweight magnets, critical components in the manufacturing of smartphones, jet engines, electric vehicles, and defense systems. The Nevada-based MP Materials is the only domestic producer of rare-earth minerals.
“This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence,” MP Materials’ founder and Chief Executive James Litinsky said in a statement.
Litinsky added that the 10,000 metric tons of magnets the company will produce under the plan is “enough to meaningfully support U.S. defense and commercial needs.”
Part of the deal established a floor price for neodymium-praseodymium (NdPr) materials at $110 per kilogram. Analysts at Benchmark Mineral Intelligence said locking in a floor keeps a steady stream of income for MP Materials for a decade.
“The price floor not only guarantees stable revenue for MP but also sends a strong price signal across the sector,” they said.
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Author: Dillon B
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