MP Materials (NYSE: MP) has entered a multi-billion-dollar public-private partnership with the US Department of Defense (DoD) to build a domestic supply chain for rare earth magnets, reducing America’s reliance on foreign sources. 

 The deal will make the DoD the largest shareholder in MP Materials, after acquiring $400 million worth of preferred stock. The investment is part of a broader investment package and long-term strategic commitments from the federal government, the company said on Thursday.  

Shares in the Nevada-based firm surged over 53% in premarket trading in New York following the news, to $46 each, and were last trading at $47, leaving the company with a market capitalization of almost $7.2 billion. “This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence,” MP Materials’ founder and chief executive James Litinsky said in a statement. 

MP Materials, the only domestic producer of rare earth elements — vital for smartphones, jet engines, electric vehicles and defense systems — plans to build a second magnet manufacturing plant at a yet-to-be-named 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.  

As part of the expansion, the company also plans to upgrade its Mountain Pass mine in California with heavy rare earth separation capabilities, further cementing it as a national strategic asset. 

The operation already houses extraction, separation and refining operations in one integrated location. 

The strategic agreement comes amid heightened urgency to build a US-based mine-to-magnet supply chain. China’s decision in April to restrict exports of rare earths highlighted American vulnerabilities and intensified calls in Washington for a more resilient industrial base. 

MP said the partnership aims to accelerate domestic production, strengthen supply chain security, and support dual-use technologies spanning both defence and commercial markets.