Pentagon Backs MP Materials With $1.55B Rare Earth Investment
When Uncle Sam becomes your largest investor, you’re doing something right. With Trump’s fixation with rare earths reaching new heights after the Ukraine mineral deal, the Pentagon bought a 15% stake in America’s only fully integrated producer. The landmark public-private partnership takes aim at China’s 85% stranglehold in the rare earth processing market.
- MP MaterialsMP sold $400M in preferred stock, plus will receive $150M and $1B in government and bank loans, respectively — financing a 2028 “10X Facility” to “meaningfully support US … needs.”
- WithMP up nearly 50% on the news, the Pentagon also locked in a ten-year price floor — protecting against a predatory dumping scenario, should China flood the market.
Precious metals: With rare earths powering everything from fighter jets to EVs, China’s trade war retaliation exposed a brutal weakness. While buyers know the risks of Beijing, they’ve avoided committing to pricier Western alternatives that could lock them into higher costs. Meanwhile, Western producers can’t secure funding without guaranteed customers, creating the perfect storm that cemented China’s power. This Pentagon deal breaks the cycle by guaranteeing purchases, price floors, and financing. However, withMP already up 176% YTD, this West vs. East play comes with a premium price tag.