The US Department of Defense is set to become the largest shareholder in MP Materials, the only rare earth mine and processing facility in the country, with a $400 million stake and $150 million loan, plus a 10-year agreement to purchase all magnets produced. China dominates rare earth production, prompting the US to secure its supply chain by investing in MP Materials.

MP Materials is set to build a second magnet manufacturing facility, 10X, in addition to its existing operation in California, significantly increasing its production capacity to 10,000 metric tons annually. The US has agreed to purchase all refined neodymium-praseodymium oxide from 2028 at $110 per kilogram, well above the current market price.

The company secured $1 billion in financing from JPMorgan and Goldman Sachs to build the new facility, following a halt in shipments to China due to the US-China trade standoff. Shares of MP Materials surged 50.6% after the announcement, indicating investor confidence in the company’s future prospects and the US government’s strategic investment in securing rare earth supply chains.

Read more at Yahoo Finance: Pentagon to Take $400 Million Stake in Rare Earth Miner Outside Vegas