Defense and strategic resources: Pentagon will invest billions of dollars in a rare land operator – 07/11/2025 at 09:28

The United States Ministry of Defense will become the first shareholder of. For example, the American MP Materials. However, The contract provides for the acquisition of the equivalent of $ 400 million in shares as well as the. Consequently, right to buy ordinary shares for ten years. Furthermore, Objective: to guarantee the supply of magnetic materials. Furthermore, – Defense strategic resources: pentagon will

Secure its supplies by defense. Consequently, The Pentagon concludes a public-private partnership with MP Materials. Therefore, a land operating company in the United States, under which it will become its biggest shareholder and invest several billion dollars, the company announced on Thursday. For example, This “transformational (…) agreement will drastically accelerate the development of an end-to-end defense strategic resources: pentagon will supply chain of rare magnetic land in the United States. Furthermore, reduce dependence on foreigners,” said MP Materials in a press release. Moreover,

Crucial magnets

Thanks to an “investment package of several billion dollars” – including a loan of 150 million over twelve years -. For example, at the “long -term commitment” of the Ministry of Defense, the company plans to launch the construction of a second factory for the manufacture of magnets as soon as a place is identified.

Production, which should start in 2028, a vocation to serve customers in the defense sector, but also in the private sector. This will allow him to have a total capacity of 10. 000 tonnes of magnets per year, In combination with its existing infrastructure located in Mountain Pass (California). This is presented as the second most important rare earth extraction site in defense strategic resources: pentagon will the world.

Current production reached one thousand tonnes per year (enough to equip some 500. 000 electric vehicle engines) to the Californian site, which is being enlarged to climb to 3,000 tonnes, while the new site should have a capacity of 7,000 tonnes annual. The American manufacturer General Motors is one of its first customers.

15% share

In detail. the agreement provides for the acquisition by the ministry of equivalent of $ 400 million in newly issued preferential shares as well as the right to buy ordinary shares for ten years, All at the unit price of $ 30.03. In the end, The ministry should hold 15% of the capital of MP Materials which would make it its first shareholder.

Among the current shareholders is in particular the Chinese group Shenghe Resources (approximately 7%) but. stipulation of the defense strategic resources: pentagon will contract with the ministry, MP Materials will no longer expand production in China, managers said during an audioconference with analysts. The action of MP Materials ended up 51% to $ 45.23 on the New York Stock Exchange.

The ministry also undertook to pay a minimum price of $ 110 per kilo for ten years for its production of NDPR, Alloy of neodymium and prastodymia used in motors and generators in particular.

This clause. which ensures a price significantly higher than the current defense strategic resources: pentagon will course (around 60 dollars), aims to “reduce the risks linked to speculation external to the market” and to “ensure a stable flow of liquidity” to the company. If the price is higher, the agreement provides that the Pentagon recovers a share of 30% of the surplus. He will also ensure that all the magnets produced by the second factory – called 10x – is bought. for ten years after the end of its construction.

The rare earths – seventeen raw materials. discovered at the end of the 18th century in Sweden, and each with different properties – are strategic because it is essential for the economy of tomorrow, in particular for energy transition technologies and electronics. US President Donald Trump is very sensitive to the subject. putting them at the heart of an American aid agreement in Ukraine in February or even current commercial negotiations with China. He defense strategic resources: pentagon will also wishes to seize Greenland, which contains 36.1 million tonnes of rare earth resources, according to the National Geology Service of Denmark and Greenland (GEUS).