The Elements of Innovation Discovered
The Elements of Innovation Discovered
Metal Tech News - July 10, 2025
A rare earth magnet produced at MP Materials' Independence plant in Texas.
U.S. military hardware, such as this F-22 Raptor flying a mission off the coast of Hawaii, is heavily reliant on rare earths.
Rare earth metal produced at MP Materials' Independence facility.
Mountain Pass is the only rare earths-producing mine in the United States and the largest outside of China.
In an unprecedented move to establish a domestic supply of the rare earths essential to the national security and economic well-being of the United States, the Pentagon has entered into a multi-billion-dollar partnership with MP Materials, owner and operator of the Mountain Pass rare earths mine in California's Mojave Desert.
The deal begins with a $400 million investment that positions the U.S. Department of Defense to become MP Materials' largest shareholder. MP plans to use the money raised through this financing to help build the 10X Facility, which will increase the company's rare earth magnets production capacity to 10,000 metric tons per year.
To help insulate MP and its expanded rare earths and magnets production in the U.S. from Chinese market manipulation, the Pentagon is guaranteeing a buyer for all the magnets produced at 10X, as well as a minimum sale price for all the magnet rare earths neodymium-praseodymium (NdPr) products stockpiled or sold by the company for a decade.
To round off its commitment to ensuring the U.S. has a secure and reliable supply of the rare earths most vital to American industry and military readiness, DOD is loaning MP $150 million to expand heavy rare earth separation capacity at Mountain Pass.
"This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence," said MP Materials Chairman and CEO James Litinsky.
Mountain Pass is the only rare earths-producing mine in the United States and the largest outside of China.
The Pentagon's multi-billion-dollar backing for a mine-to-magnets rare earth supply chain built by MP underscores the strategic importance of this suite of technology metals to national security – both as a direct input into military hardware and in ensuring the health of American industry.
The criticality of rare earths is often highlighted by the roughly 920 pounds of these tech metals needed to build each F-35 Lightning II, the 5,200 lb required for every Arleigh Burke DDG-51 destroyer, or the 9,200 lb that go into the construction of a single Virginia-class submarine.
While these big-ticket items emphasize the importance of rare earths to military readiness, the real demand is driven by the thousands of smaller devices used by the armed forces that require rare earths and the magnets made from them.
The communications equipment used by every soldier, vehicle-mounted laser range finders, radar and sonar systems, drones, electric transport vehicles, and countless sensors and electric motors, all require various rare earths.
U.S. military hardware, such as this F-22 Raptor flying a mission off the coast of Hawaii, is heavily reliant on rare earths.
The same properties that make rare earths critical to military readiness are also needed for clean energy, high-tech devices, and countless consumer products used every day. From headphones and kitchen appliances to EVs and clean energy to charge them, rare earth magnets have become intricately intertwined in everyday living.
Rare earths and critical minerals are so fundamental to the American economy that this aspect of their use is a high priority for officials charged with national security.
"Economic competitiveness is a national security issue. Our ability to maintain our way of life, our ability to maintain our position in the world, our ability to fund our physical security – all of these things are dependent on a strong and robust economy," said Tim Moughon, former director of the field intelligence directorate at the U.S. Department of Homeland Security. "The mining sector is critically important in this respect."
This is especially true for rare earth magnets, one of the most strategically important components in advanced military and consumer technologies. Despite their importance to the nation's security and economy, the U.S. is almost entirely reliant on China, which controls roughly 70% of global rare earth supply and 90% of NdFeB magnets, for its supply.
The Pentagon intends to end that reliance by putting the might of the U.S. military behind MP, a company that has been endeavoring to establish a mine-to-magnets rare earth supply chain in the U.S. for nearly a decade.
"The cavalry has arrived," said MP Materials Vice President of Corporate Affairs Matt Sloustcher.
The cavalry has arrived with not only the firepower to establish a robust rare earths supply chain, but also the equipment to establish a perimeter to protect this vital segment of American industry and military readiness.
To bolster MP's ability to rapidly expand upon its burgeoning rare earths supply chain, DOD has agreed to purchase $400 million of a newly created series of the company's preferred stock, which is convertible into common shares. These shares come with a warrant permitting DOD to purchase additional shares at $30.03 each.
With full conversion of shares and exercise of warrants, DOD would hold roughly 15% of MP's shares, making it the company's largest shareholder.
At the same time, JPMorgan Chase Funding Inc. and Goldman Sachs Bank USA have committed to providing MP with a $1 billion financing to construct and develop the 10X rare earths magnets facility.
In combination with MP's Independence plant in Texas, this new facility will expand the company's rare earth magnets production capacity to 10,000 metric tons per year.
Rare earth metal produced at MP Materials' Independence facility.
MP expects the 10X plant to be operational by 2028 – the company is still finalizing the location for this facility.
The perimeter being established to protect this supply chain includes a 10-year agreement that sets the price floor for NdPr products stockpiled or sold by MP at $110 per kilogram. This will help ensure that MP's financial viability is not undermined by a flood of underpriced rare earth magnets from overseas suppliers.
To accomplish this, the Pentagon has agreed to pay MP the difference between $110/kg and any lower market price. On the flip side, once the 10X plant reaches target capacity, DOD will receive 30% of any price upside above $110/kg for a 10-year span, beginning at the end of this year. Similarly, the Pentagon will receive a split of the 10X annual earnings (EBITDA) above $140 million over 10 years from the time the plant is commissioned.
In addition, MP expects to receive a $150 million loan from DOD to expand heavy rare earth separation capabilities at Mountain Pass within the next 30 days.
These heavy rare earths, which include dysprosium and terbium, used to strengthen rare earth magnets for EV drive motors and other heavy-use applications, tend to be rarer and more expensive than NdPr and other light rare earths.
MP has been stockpiling heavy rare earth concentrates at Mountain Pass as it builds the capacity to process them and separate them into individual elements that can be used by industry. The Pentagon loan will accelerate that process.
Combined, these commitments form a powerful triad of investment, price protection, and strategic offtake that positions MP – and the U.S. – to sever rare earth magnet reliance on China.
"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," said Litinsky.
With more than 17 years of covering mining, Shane is renowned for his insights and in-depth analysis of mining, mineral exploration, and technology metals.
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