From Defense to Dollars: The Government's Play to Rebuild the Domestic Rare Earths Supply Chain

Thu, Aug 21, 2025, 12:31 PM 4 min read

MP Materials (NYSE:MP) said it has entered a public-private partnership with the U.S. Department of Defense to shore up critically-important American rare earth supplies.

Las Vegas based MP operates the only fully integrated rare earth mining and processing facility in the country. California's Mountain Pass mine is the second largest rare earth mine in the world, bought when MP was founded in 2017.

DoD agreed to buy $400 million in new preferred shares, convertible into common stock, and will receive a warrant allowing more purchases. MP will get $1 billion in financing for the costs of constructing and developing its second domestic magnet plant. The flagship Independence magnet facility in Fort Worth, Texas came online in January.

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China controls the world supply of heavy rare earths – dysprosium and terbium, and light rare earths – neodymium and praseodymium. These materials are used in military defense systems, consumer electronics and alternative energy technologies.

The U.S. relies almost 100% on foreign sources for processed rare earth materials that make high tech magnets. According to the Atlantic Council, China now controls over half of global rare earth mining production and 90% of separation and refining capacity. Experts view this as a security threat, drawing the attention of the White House.

"This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence," said MP Materials CEO James Litinsky. "We are proud to enter into this transformational public-private partnership and are deeply grateful to President Trump, our partners at the Pentagon, and our employees, customers and stakeholders for their unwavering support and dedication."

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MP extracts and purifies rare earth to manufacture strong and highly efficient magnets for military and commercial use. It estimates the new "10X Facility" will begin taking orders in 2028, when it hopes to reach an estimated 10,000 metric tons of magnet manufacturing capacity. It will also expand separation operations at the Mountain Pass site, where materials are extracted, separated and refined in one secure location.