Pentagon to be the largest shareholder in the rare earth magnet manufacturer MP Material
The Defense Department will be the largest shareholder of rare earth mining MP Later It is agreed to buy $ 400 million from his preferred stockThe company said on Thursday.
Mountain passes about 60 miles outside Las Vegas, in California, the only operational rare earthly earth mining in the United States is owned by MP Materials. The income from the Pentagon investment will be used to increase the rare meaning process capacity and magnet production MPs, the company said.
On the news, the shares of MP Materials jumped more than 50%.
Used in rare earth magnet which are the main components of many military arms system, including F -35 warplane, drone and submarine, Defense Department??
In 223, the United States almost completely dependent on foreign countries on the rare earth. China represented about 70% imports. US Geographical Survey?? The rare earth is a central dispute between the recent trade disputes between the US and China.
Home Secretary Doug Bergum said in April that Trump was planning to administration Direct equity investment Serious mineral companies to break China’s dependence on US dependence.
MP Material CEO James Litinsky describes the Pentagon Investment as a public-funding partnership with the end-to-end rare earth magnet supply chains in the United States.
“This initiative is a sign of decisive action by the Trump administration to accelerate the freedom of the American supply chain,” Litinsky said in a statement.
Public-productive partnership
The Pentagon is buying a newly created class of preferred shares converted to the general stock of the MP Material, allowing the United States to buy additional ordinary stocks. The investment of the Defense Department converts at a fixed price of 30.03 per share. There is no cash dividend.
According to the statistics of the Factset, the exercise of convertible shares and general stock warrants will be twice as much as 15% of the MP content, 8.61% organized by Litinsky and the Blackcock Fund Advisors 8.27%.
The MP Materials will create another magnet production facility in the United States to protect and serve professional customers with the support of the Pentagon. Whose location has not been disclosed, this facility is expected to start commissioning in 2028, and MP Material rare earth magnet production capacity will bring at 10,000 metric tons.
The Defense Department is guaranteed that 100% magnet made in a new facility, called 10X, is purchased by protection and professional customers for 10 years after the plant is created.
The Pentagon NDPR products will provide the floor for 10 years at a cost of 10 years, which have been stored or sold by MP Materials. NDPR is a rare earth compound that is used to create a permanent magnet. The US MP content will give $ 110 per kilogram and market differences.
JP Morgan and Goldman Sax are providing $ 1 billion to finance production facilities. MPs are also expected to get a loan of $ 1 million from the Pentagon to increase the rare earth separation capacity on the mountain pass.
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