MP Materials, which runs the only rare earth mine in the United States, a recent $110 million investment from the Pentagon has propelled the company into the national consciousness. This strategic partnership will further propel the small business’s work, particularly on the defense side. As a result, MP Materials’ shares are up more than 40% in pre-market trading.
Situated in Mountain Pass, California, MP Materials runs the only operational rare earth mine in the U.S. The company’s recent announcement of a second magnet manufacturing facility will further strengthen its domestic production capabilities. This facility will start commissioning in 2028. It will include a staggering manufacturing capacity of 10,000 metric tons for rare earth magnets.
Continued collaboration with the Pentagon is a clear indication of their commitment to serve defense and commercial customers. MP Materials dependence on NdPr and the ecosystem surrounding this key rare earth compound. They then use that REE to produce permanent magnets that are essential for the operation of military equipment and consumer electronics.
Under the terms of this investment agreement, the Pentagon will buy convertible preferred shares and warrants for common stock. Upon closing of this transaction they will own approximately a 15% interest in MP Materials as of July 9. This visionary initiative goes beyond sustainability. This strategic deal shores up MP Materials’ bottom line. It further national interests by ensuring that the United States will have a stable supply chain for rare earth materials.
That huge investment has already created quite a stir in the stock market. Consequently, shares of MP Materials have soared 23 times since its March 2020 low. Investors are understandably excited about the company’s much-improved outlook. They understand its critical role in the rare earth supply chain, which is vital for technological innovation and national security.