The Department of Defense will become the largest shareholder in MP Materials after agreeing to purchase $400 million in preferred stock, the company announced Thursday. Shares surged more than 40% following the news.
The investment will fund expansion at Mountain Pass, California — the only operational rare earth mine in the U.S. — and boost domestic magnet production. These magnets are vital for military hardware such as F-35 jets, submarines, and drones.
With China still supplying about 70% of U.S. rare earth imports in 2023, the Trump administration has prioritized breaking dependency. “This marks a decisive action to accelerate American supply chain independence,” MP CEO James Litinsky said.
The Pentagon’s preferred shares and warrants could translate into a 15% stake in MP, surpassing holdings by CEO Litinsky and BlackRock. MP will also construct a second U.S. magnet plant, with the government guaranteeing magnet purchases and setting a 10-year price floor.
