By Steve Gelsi
America’s only fully integrated rare-earth producer will receive a ‘multibillion-dollar’ package of investments to build a magnet-manufacturing plant
MP Materials Corp.’s stock skyrocketed in early trading Thursday, after the rare-earth producer said it inked a public-private partnership with the U.S. Defense Department to boost domestic magnet production and to reduce dependence on foreign sources.
MP Materials (MP) said the U.S. government will emerge as its largest shareholder with 15% of its stock as it works to build its new 10X Facility at a yet-to-be-announced location. The company, which bills itself as “America’s only fully integrated rare earth producer,” plans to open the magnet manufacturing plant in about three years and update its existing mine in Mountain Pass, Calif.
The stock soared 46.3% to $43.90 a share in afternoon trading as it headed toward a three-year high. The gains are putting the stock on track to smash its current one-day record rally of 21.7% on April 14, 2025.
D.A. Davidson analyst Matt J. Summerville reiterated a buy rating on MP Materials’ stock and praised the deal.
“We view this partnership as clearly transformative, although not entirely surprising given the [Trump] administration’s priorities with respect to critical minerals/materials,” Summerville said in a research note.
James Litinsky, founder and chief executive of MP Materials, said, “This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence.”
The Pentagon and MP Materials inked a 10-year price floor agreement of $110 per kilogram for the company’s neodymium and praseodymium rare-earth products for use in batteries and other electronic components.
The U.S. government has also committed to buy $400 million of newly issued preferred stock, which will be convertible into common stock, and a warrant to purchase additional common shares.
JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS) have pledged $1 billion in financing for building the 10X Facility. MP Materials also received a $150 million loan from the U.S. government.
The company will use the money to expand its existing rare earths separation and processing capabilities, as well as its existing location in Mountain Pass, Calif., it said. It’s also commissioning its Texas-based magnetics facility called Independence.
Baird analyst Ben Kallo said last month that a big deal was coming.
“We see a partnership announcement with a large [original equipment manufacturer] and/or support from the U.S. government as potential catalysts to monitor,” he said at the time. “MP is in the driver’s seat at the negotiating table given their status as the only scaled U.S. producer.”
MP Materials extracts, refines, and separates rare-earth materials at what is currently the world’s second-largest rare-earth mine in Mountain Pass, Calif. The largest mine in the world is located in China.
MP went public in 2022 in a merger with a special purpose acquisition company, as one of the many blank-check deals put together by Chamath Palihapitiya, a venture capitalist known as the SPAC King and who co-hosts of the popular podcast “All-In.”
Ahead of Thursday’s moves, MP Materials’ stock had rallied 92.5% in 2025 through Wednesday, while the Nasdaq Composite Index COMP has gained 6.7% and the S&P 500 index SPX has tacked on 6.5%.
Also read: Why it’s nearly impossible for America to meet its rare-earth needs after China’s export restrictions.
-Steve Gelsi
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
07-10-25 1333ET
Copyright (c) 2025 Dow Jones & Company, Inc.