Magnets, Missiles and Mines: How MP Materials became the Pentagon's secret rare earths weapon for next-gen arms
MP Materials runs the only operational rare earths mine in America, at Mountain Pass, California. To keep it alive and expanding, the Department of Defense will spend $400 million on new preferred shares, giving it around a 15% stake in the company. JPMorgan and Goldman Sachs are adding $1 billion more to help build the next phase.
The real kicker is the safety net. For the next decade, the US government guarantees MP Materials at least $110 per kilogram for its neodymium and praseodymium output. If prices sink below that, taxpayers cover the gap. If prices rise above, the government gets 30% of the profit. As CEO James Litinsky put it, 'The taxpayers are going to make a lot of money.'It's a tough deal. But without it, the whole operation risks collapse under China's low-cost competition. The Pentagon also gets every magnet MP's new plant makes for 10 years — enough to feed both military and commercial demand.Mountain Pass alone can't do it all. So MP Materials will build a second magnet factory, the '10X Facility,' alongside its existing Texas project. Once the new site starts running in 2028, America's home-grown magnet output should hit 10,000 metric tons a year. The goal is clear: end the need to ship mined ore to China just to buy it back as finished magnets.
Litinsky called it a 'public-private partnership' that ties national security to business survival. He told investors, 'We understand that this partnership is ultimately on behalf of the taxpayers and our national security, and with that comes a great responsibility to get this done right.'This isn't just about economics. It's a strategic fight. China's near-total control of rare earths lets it squeeze supply at will. Last year, Beijing slapped new export rules on these critical minerals, just as tariffs rose on both sides of the Pacific. MP used to ship its entire output to Shenghe Resources, a Chinese company partly owned by the state. But tariffs as high as 125% killed that deal. Now, the US is forcing a break from that loop.Doug Burgum, US Interior Secretary, summed up the stakes in April: America must 'break dependence on China' for materials that end up in F-35s, drones and submarines.It's not just the US feeling the heat. The European Parliament branded China's export controls 'unjustified' and 'intended to be coercive.' They want the EU to speed up its Critical Raw Materials Act to slash dependence on foreign imports. China's foreign minister brushed off the backlash, saying it's China's 'sovereign right' to control materials with both civilian and military uses.To get this over the line, the Pentagon will also loan MP Materials $150 million to expand heavy rare earth separation at Mountain Pass. Together with the new plants, this should help the US make everything from wind turbines to MRI scanners without relying on a single foreign refiner.No one's pretending it's cheap or quick. Rare earth prices don't make new mines profitable on their own. Government support makes the risk worth it. MP Materials' shares shot up over 50% after the deal, adding to an already impressive 92% gain this year.This is about turning American rocks into American jobs and resilience. It's about building a full supply chain that can fuel clean energy, advanced tech and national defence — without strings pulled in Beijing.The real value here isn't just the minerals buried under Mountain Pass. It's the bet that a strategic resource can stay American, even when the global market wants the cheapest bidder. If it works, the magnets spinning inside future Teslas, wind turbines and fighter jets will come with a stamp that says: Made in the USA.
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