Trump Administration Takes Stake in Rare Earths Firm In Move To End China’s Control
The Trump administration deepens its efforts to break American dependence on Chinese supplies with rare land, committing $ 400 million in joint -stock funds to MP Materials Corp. As part of a broader plan aimed at extending domestic production of rare land magnets used in advanced weapons systems and industrial technologies.
The Ministry of Defense acquires a newly expressed class of privileged shares in MP materials, convertible into ordinary shares, as well as mandates to buy additional equity. After the transaction, which is expected to close on Friday, the Pentagon will become the largest shareholder in the company, with a potential participation of around 15%, according to MP Materials.
The agreement also includes a 10 -year commitment from the United States government to support the prices and demand for rare land magnets produced at the national level. The Ministry of Defense guaranteed the purchase of 100% of production in a planned magnet manufacturing plant – left the factory “10x” – at a minimum price of $ 110 per kilogram for the neodymium -pseodymium (NDPR), an alloy of rare keys used in missile guidance systems, fighter aircraft and electric motors.
MP Materials’ shares climbed almost 50% in the pre-market negotiations on Thursday after the announcement.
“This initiative marks a decisive action by the Trump administration to accelerate the independence of the American supply chain,” said CEO of MP Materials, James Litinsky.
MP MATERIALS has and operates the only mine of rare land active in the United States, located in Mountain Pass, California. The company said that it would use the Pentagon investment product, as well as a billion dollars funding organized by JPMorgan Chase and Goldman Sachs, to build its second magnet production installation and extend treatment capacities.
The 10x installation, which has not yet been located, should start the commissioning in 2028 and will add 10,000 metric tonnes of annual animal production to American capacity. An additional 150 million dollars loan from the Ministry of Defense will finance the extended separation of rare land at Mountain Pass.
The United States imported around 70% of its rare earths from China in 2023, according to US Geological Survey. The push to reshape the supply chain won the emergency during the trade war launched by President Trump, when Beijing threatened to restrict exports of rare land.
Interior secretary, Doug Burgum, said in April that the administration assesses direct equity investments in critical mineral companies within the framework of a strategy aimed at strengthening industrial resilience and reducing economic exposure to strategic competitors.
