Bentagon cracks investment with the critical metal product for us

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The Pentagon is investing $ 400 million in a rare land product in the United States, in an unusual arrangement that highlights the Trump administration’s design on breaking the Chinese dominance of critical minerals and promoting local supply chains.

The company, MP Mateials, said on Thursday that Pentagon It will become its largest shareholder, as she gets a 15 percent stake in the company, in addition to investing billions of dollars to build a magnet manufacturing facility 10,000 tons – is expected to start assigning in 2028.

“This initiative represents a decisive measure by the Trump administration to accelerate the independence of the American supply chain,” said James Littsky, founder and CEO of the deputy, in the announcement. The Pentagon did not immediately respond to a request for comment.

Litinsky has more than 14 million shares in MP materials. The company’s share price jumped by more than 48 percent in response to the news, adding 200 million dollars to his net personal wealth.

It is rare for the United States government to make direct investments in companies. It sometimes does this to support the development of decisive technologies for national interests, or in the harsh conditions to save important companies systematically from failure, such as Wall Street Banks during the financial crisis.

MP materials, based in Las Vegas, runs the only rare Earth mine in the United States in Mountain Pass, California, and rare Earth extract such as nodimum and Praseodemium, which is essential to manufacture weapons and electric cars systems.

The rare Earth magnet is very important for weapons systems including the F-35 Lightning II fighter, drone aircraft, and Virginia and Colombia category. One f-35 needs 900 pounds from Rare.

It was also found in Tomahawk missiles and bombs of the router that was jointly developed by the US and Navy.

Washington considers its dependence on China that the rare land is a risk of national security. China dominates the rare mining and processing of rare ground minerals by China, which controls 55 percent of the global mining capacity and 85 percent of refining.

In April, Beijing placed export restrictions on seven rare and permanent magnets, causing a significant disturbance in the automotive, defense and technology industries and a 75 percent decrease in magnet exports. At the time, the United States Minister of the United States Doug Borgum said that the Trump administration was trading investment in local metal producers.

The Pentagon has pumped more than $ 430 million to create a rare local land supply chains since 2020, including the separation and revision of exploited elements in the United States and the conversion of these repeated materials into minerals and magnets.

The Pentagon agreed to purchase $ 400 million in a newly created series of the group’s favorite stocks, which can be converted into shared shares at an initial transfer price of $ 30.03 per share. The Ministry of Defense has an order to purchase additional shares.

The deal also includes conditions for the OffTAKE agreement, according to which the Ministry of Defense will guarantee the purchase of all the batteries produced by the facility over the next ten years. MP materials will also upgrade facilities at Mountain Pass. The company built about $ 45 million in Pentagon’s financing.

The main thing is a price bottom for Neodymium-Praseodymium, which will be determined at $ 110 per kilogram, ensuring that the company will not suffer from losses in the production deal if the supplies increased suddenly. Western miners complained that Chinese competitors overwhelm the market by increasing supply and enjoying generous support to the state, which reduces their costs artificially.

“This is the type of long -term commitment needed to reshape the rare global land supply chains.” “The price of the price can be enabled novice developers and marginal producers to enter the market, a policy step to change the game.”