MP Materials Cuts Rare Earths Deal With U.S. To Break China’s Grip

MP Materials unveiled a multibillion-dollar deal with the U.S. government on to ramp up production of rare earth magnets and help reduce China’s dominance over materials used in weapons, electric vehicles, and many electronics, Katha Kalia, Eric Onstad, and Ernest Scheyder reported for Reuters.

MP operates the only rare earth mine in the United States and is expanding domestic processing and magnet manufacturing. I Photo: MP Materials

Under the deal—which sent MP’s shares soaring nearly 50%—the U.S. Department of Defense (DoD) will become the largest shareholder in the Las Vegas-based company.

The move marks Washington’s most high-profile investment to date in the critical minerals sector.

Rare earths are a group of 17 metals essential for manufacturing magnets that convert power into motion.

China halted exports in March amid a trade dispute with President Trump—a standoff that showed signs of easing last month, though broader tensions have underscored the urgent need for expanded U.S. production.

MP operates the only rare earth mine in the United States and is expanding domestic processing and magnet manufacturing.

As part of the agreement, the DoD will guarantee a floor price of $110 per kilogram for the two most in-demand rare earths—nearly double the current Chinese market price, which has remained low for years, deterring investment.

MP received an average of $52 per kilogram for those same materials in Q2. The company will also build a new magnet factory, targeting annual output of 10,000 metric tons, with operations expected to begin in 2028.