The Department of Defense announced in July 2025 it would purchase $400 million in convertible preferred stock in MP Materials at a conversion price of $30.03 per share, making DOD the company’s largest shareholder. The deal also includes a $150 million DOD loan to fund a heavy rare earth separation facility in California and a price floor guarantee on neodymium-praseodymium (NdPr) output. In exchange, MP commits to building a 10X Facility targeting 10,000 metric tonnes of annual US rare earth magnet production capacity by 2028. A November 2025 follow-on deal with Ma’aden created a joint rare earth refinery in Saudi Arabia with Pentagon backing.
The investment is the largest direct US government equity stake in a domestic critical minerals company on record. MP Materials operates the Mountain Pass rare earth mine in California, the only active rare earth mine in the US and the site of processing capacity that had been sent to China for final separation for years. The DOD deal funds the heavy rare earth separation capability that Mountain Pass currently lacks, completing the domestic supply chain from mining through separated oxides.
The strategic logic is straightforward: China accounts for roughly 85% of global rare earth processing and 90% of rare earth magnet production. Every electric motor, EV drivetrain, wind turbine generator, and military propulsion system depends on rare earth magnets. The Mountain Pass-to-magnet investment is the DOD explicitly treating rare earth supply as a defense industrial base problem rather than a market problem. For clean energy investors, the price floor guarantee on NdPr is the most directly investable piece: it de-risks MP’s revenue assumptions in a market where Chinese pricing policy has historically been used to make western producers uneconomic.