MP Materials hits new high as it receives $150M Pentagon loan

[Ben Graham]

MP Materials (NYSE: MP) continued to rally on Monday after receiving a $150 million loan from the US Department of Defense to expand its rare earth production capabilities.

The loan is part of a multi-billion-dollar agreement the parties signed last month to boost the US industrial base and critical minerals supply chain. MP is currently the only domestic producer of rare earth elements, with operations centered around its Mountain Pass mine in California.

The $150 million funding would come from the One Big Beautiful Bill Act, which President Trump signed into law on July 4, 2025, the Department of Defense said in a statement on Sunday.

MP Materials’ stock jumped by as much as 10.1% to a new all-time high of $82.50 on Monday morning, continuing its strong momentum from its Q2 earnings beat last week. The Las Vegas-based miner has a market capitalization of $13.3 billion.

Adding heavy rare earths

Under the July 10 agreement, the DoD committed to buy neodymium-praseodymium (NdPr) materials produced by MP at nearly double the market prices for at least 10 years. The Pentagon also purchased 15% of the company’s preferred stock, making it the largest shareholder, and committed to provide funding support for MP’s planned expansion into heavy rare earth production.

Neodymium and praseodymium — both considered “light rare earths” — are vital for making high-strength permanent magnets used in EV motors, wind turbines and electronics. Heavy rare earths, on the other hand, have more specific uses such as defense technologies, but are less common.

The DoD funding is designated to add heavy rare earth separation capabilities to MP’s existing processing facility at Mountain Pass.

Meanwhile, the company also has plans to build a second magnet manufacturing plant at a yet-to-be-determined site. The plant, dubbed the “10X Facility”, is expected to begin commissioning in 2028 and will increase the company’s total magnet production capacity to an estimated 10,000 tonnes annually, it has said.

After signing the DoD deal, MP entered a $500 million supply agreement with Apple (NASDAQ: AAPL), under which the tech giant will source US-made magnets tailored specifically for its products from MP’s Fort Worth, Texas facility.