Pentagon Takes $400M Stake in MP Materials to Boost Rare Earth Independence

The U.S. Department of Defense is investing $400 million for a 15% equity stake in MP Materials, marking one of the federal government's rare direct investments in a private company. The deal includes funding for a new magnet factory with a 10,000-ton annual capacity, slated to begin operations by 2028.

MP Materials, the sole U.S. rare earth miner operating California's Mountain Pass site, confirmed the Pentagon will become its largest shareholder. CEO James Litinsky framed the move as a strategic push to reduce reliance on Chinese mineral supplies: "This marks decisive action by the TRUMP administration to accelerate American supply chain independence."

Investors cheered the news, sending MP Materials' stock soaring 48%—adding roughly $200 million to its market valuation. Litinsky's personal stake gained nearly $14 million in value overnight.