MP Materials Corporation (MP) Surges 50.62% on Landmark Pentagon Partnership

MP Materials Corporation (MP) has captured the market’s attention with a spectacular 50.62% surge, closing at $45.23 on July 10, 2025. This dramatic move follows the company’s announcement of a transformational public-private partnership with the U.S. Department of Defense (DoD), marking a pivotal moment for both MP and the broader American rare earth supply chain.

On July 10, 2025, MP Materials revealed it had entered into a multi-billion dollar, decade-long partnership with the DoD. The agreement is designed to accelerate the build-out of a fully domestic rare earth magnet supply chain, reducing U.S. dependence on foreign sources. This initiative is especially timely as global supply chains face increasing pressure from geopolitical tensions and export restrictions, particularly from China, which has historically dominated the rare earth market.

The centerpiece of the partnership is the construction of MP’s second U.S. magnet manufacturing facility, dubbed the "10X Facility." Once operational, this facility is expected to boost MP’s domestic rare earth magnet manufacturing capacity to an estimated 10,000 metric tons. The new plant will serve both defense and commercial customers, with commissioning targeted for 2028. This expansion further cements MP’s role as a cornerstone of America’s critical minerals infrastructure.

The strategic significance of rare earth elements cannot be overstated. These materials are essential for advanced technologies spanning defense, aerospace, automotive, semiconductors, and renewable energy. Until now, the U.S. has relied almost entirely on foreign suppliers, leaving critical industries vulnerable to supply disruptions and price volatility.

With this partnership, MP Materials is positioned to change the narrative. The DoD’s commitment includes a 10-year price floor agreement for MP’s neodymium-praseodymium (NdPr) products at $110 per kilogram. This arrangement ensures stable, predictable cash flows for MP, insulating the company from non-market forces and sudden price swings. Additionally, the DoD has agreed to a 10-year offtake commitment, guaranteeing that all magnets produced at the new facility will be purchased by defense and commercial customers. This level of long-term security is rare in the mining and materials sector and provides MP with a robust foundation for future growth.

The scale of the DoD’s investment in MP Materials is unprecedented. As part of the agreement, the DoD will purchase $400 million in newly created convertible preferred stock, along with a warrant to acquire additional shares at a conversion and exercise price of $30.03 per share. This transaction, scheduled to close on July 11, positions the DoD to become MP’s largest shareholder, with the potential to own up to 15% of the company’s outstanding shares on an as-converted and as-exercised basis.

In addition to the equity investment, MP has secured a $1 billion financing commitment from JPMorgan Chase and Goldman Sachs to fund the construction of the 10X Facility. The company also expects to receive a $150 million loan from the DoD to expand heavy rare earth separation capabilities at its flagship Mountain Pass, California, site. These financial arrangements provide MP with the resources needed to execute its ambitious expansion plans and solidify its leadership in the rare earth sector.

This partnership comes at a critical juncture for the global rare earth market. Earlier this year, China imposed restrictions on the export of rare earths and related magnets, disrupting supply chains for industries worldwide. The U.S. government’s decisive action to support MP Materials reflects a broader push to secure domestic sources of these vital materials and reduce exposure to geopolitical risks.

James Litinsky, Founder, Chairman, and CEO of MP Materials, emphasized the importance of this initiative, stating, “This marks a decisive action by the Trump administration to accelerate American supply chain independence.” The company’s leadership has made it clear that MP remains a thriving public company, with the partnership designed to enhance—not diminish—its commercial potential and shareholder value.

The market’s reaction to the news has been swift and emphatic. MP’s stock soared over 50% on the day of the announcement, reflecting investor enthusiasm for the company’s strengthened financial position and long-term growth prospects. The combination of guaranteed demand, price stability, and substantial capital infusion sets MP apart from its peers and positions it as a linchpin in America’s industrial strategy.

For investors, this development signals a new era for MP Materials. The company is no longer just a rare earth miner—it is now a fully integrated, strategically vital supplier to both the defense sector and high-growth commercial markets. As the world transitions to electrification, advanced manufacturing, and next-generation defense systems, demand for rare earth magnets is expected to surge. MP’s expanded capacity and secure customer base provide a compelling platform for sustained value creation.

The ripple effects of MP’s announcement have been felt across the rare earth sector. Shares of other rare earth companies, such as The Metals Company and USA Rare Earth, also moved sharply higher in sympathy. This underscores the broader market recognition that the U.S. is taking concrete steps to build a resilient, domestic supply chain for critical minerals. As MP leads the charge, its peers stand to benefit from increased attention and investment in the sector.

With the DoD partnership in place, MP Materials is poised for a period of accelerated growth and strategic importance. The company’s Mountain Pass mine remains the world’s second-largest source of rare earths, and its new Texas magnetics facility, Independence, is nearing commissioning. The addition of the 10X Facility and expanded heavy rare earth separation capabilities will further enhance MP’s ability to serve both defense and commercial markets.

Investors should watch for updates on the construction timeline, customer agreements, and progress toward commissioning the new facility. The company’s strengthened balance sheet and long-term contracts provide a high degree of visibility into future revenues and cash flows. As geopolitical dynamics continue to evolve, MP’s role as a secure, domestic supplier of rare earth materials will only grow in importance.

The 50.62% surge in MP stock reflects more than just market enthusiasm—it signals a fundamental shift in the company’s trajectory and its role in the U.S. economy. The landmark partnership with the Department of Defense provides MP with the financial resources, customer commitments, and strategic backing to become the backbone of America’s rare earth supply chain. For investors seeking exposure to the future of advanced manufacturing, defense, and clean energy, MP Materials now stands out as a company with both vision and momentum.

As the rare earth market enters a new phase of domestic investment and supply chain security, MP Materials is uniquely positioned to deliver value for shareholders and play a central role in America’s industrial resurgence. The next chapter promises to be both exciting and rewarding for those who recognize the significance of this transformational partnership.