By Carol Luk

December 14, 2025 - The US Department of Defense (DOD) has agreed to invest $400mn in US rare earths producer MP Materials as part of a multi-billion-dollar agreement that also includes an offtake agreement with a price floor and additional support for build-out of MP's heavy rare earth and magnet production capacity.

The DOD will purchase $400mn of newly issued preferred stock in MP, giving it a 15pc stake and making the government the company's largest shareholder. The department will also receive a warrant to purchase additional shares of MP common stock.

Alongside the direct investment, the DOD has agreed to a 10-year offtake for MP Materials' neodymium-praseodymium (NdPr) products with a price floor commitment of $110/kg, whether stockpiled or sold.

This price represents a premium of more than $40/kg over the current global NdPr benchmark price in China, which Argus assessed at 452-454 yuan/kg ($63-63.28/kg) ex-works today.

MP will use its DOd backing to build its second domestic magnet plant, named the 10X Facility, at a yet-to-be-determined site to serve defence and commercial customers.

MP's total rare earth magnet capacity will reach 10,000 t/yr once the facility begins commissioning, expected in 2028.

For 10 years after the facility is built, MP said the DOD will ensure that all of the magnets produced will be purchased by defence and commercial customers with shared upside.

MP has secured a $1bn financing commitment from JPMorgan Chase and Goldman Sachs to support construction and development of the 10X Facility.

The company also plans to add heavy rare earth separation capacity at its Mountain Pass facility in California, and expects to receive further support for this project from the DOD through a $150mn loan in the next 30 days.

The US and other global rare earths users have been hit hard by China's export controls imposed on heavy rare earths from April, and development of alternative domestic supply is a critical priority for Washington.

MP operates the world's second-largest rare earth mine at Mountain Pass, where it extracts and processes rare earths. It is commissioning the Independence magnetics facility in Texas to anchor its downstream operations.

The Independence facility has a current capacity of 1,000 t/yr, with a planned 2,000 t/yr expansion. This indicates the 10X Facility will add another 7,000 t/yr.