Jul 10, 2025 - Economy
A rare (earths) deal
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MP Materials has a major new shareholder — the U.S. government.
⛏️ The big picture: It's all about the rare earths. MP is America's largest miner of the critically important material, needed in everything from automobiles to electronics to the defense industry. And the U.S. is almost entirely dependent on imports.
- 🇨🇳 China has leveraged its own rare-earth supply as a crucial bargaining chip in this year's trade war.
💰 Zoom in: The U.S. Department of Defense today agreed to buy $400 million of preferred shares in MP, convertible into common stock, with warrants permitting the government to buy more.
- 🦺 The government committed to invest billions of dollars more to build out a new factory for rare-earth magnets for both defense and commercial customers.
- The agreement positions the Pentagon to become MP's largest shareholder.
📈 Market impact: MP's shares soared over 50% today and are now up 176% on the year.
