MP Materials and the Department of Defense have entered into a public-private partnership to boost the supply of U.S. rare earth magnets and reduce dependence on foreign sources.
Construction of ’10X’ Magnet Manufacturing Facility
Through the partnership, MP Materials said Thursday it will build the “10X Facility,” its second domestic magnet manufacturing plant, to serve defense and commercial customers.
Once completed, the 10X facility, which is expected to begin commissioning in 2028, will enable the company to increase its total rare earth magnet production capacity to about 10,000 metric tons.
Strategic Partnership Between MP Materials & DOD
The partnership includes a 10-year offtake agreement for 100 percent of the magnets produced at the 10X Facility and a 10-year agreement in which DOD will guarantee a floor price of $110 per kilogram for stockpiled or sold neodymium-praseodymium, or NdPr, products of MP Materials. NdPr is a combination of two rare earth elements used in magnet production.
DOD will also buy $400 million worth of MP Materials’ preferred stock and receive a warrant to purchase additional shares, positioning the Pentagon to become the company’s largest shareholder.
MP Materials plans to use the proceeds from the DOD investment to broaden its magnet production capacity and its existing rare earths separation and processing capabilities. The company will also receive a $150 million loan from DOD within 30 days to fund its heavy rare earth separation expansion efforts at Mountain Pass in California.
“This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence,” said James Litinsky, founder, chairman and CEO of MP Materials.
JPMorgan Chase Funding and Goldman Sachs Bank USA have committed $1 billion in financing to support the 10X Facility construction.
MP Materials is also commissioning its Independence magnetics facility in Texas to anchor its downstream capabilities.
Skadden, Arps, Slate, Meagher & Flom and Crowell & Moring acted as MP Materials’ legal advisers in the transaction. J.P. Morgan Securities served as the rare earth producer’s exclusive financial adviser.
