Pentagon $400M Invests in U.S. Rare-Earth Supply Chain

The Pentagon has made a $400 million preferred-stock investment in MP Materials as part of a multibillion-dollar public–private effort to rebuild U.S. rare-earth capabilities and secure long-term supplies amid rising geopolitical tensions with China.

Funds will accelerate rare-earth separation and refining, scale magnet production and underpin long-term purchase commitments for defense and commercial customers. MP Materials is tripling magnet capacity at its Fort Worth factory to serve customers including major automakers and electronics firms, and is building a new facility slated to begin commissioning in 2028 that would bring magnet output toward an estimated 10,000 metric tons.

The company is also expanding heavy rare-earth separation at its Mountain Pass site. On the shop floor, electrolysis cells convert rare-earth oxides into high-purity metals that feed downstream alloying and sintering processes for permanent magnets used in electric vehicles, smartphones, radars and cruise missiles.

U.S. officials cite China’s dominant production and periodic export controls - and reports of restrictions on shipments to U.S. contractors - as drivers for the investment. Executives and policymakers present the deal as a strategic step to reduce supply-chain risk through coordinated government and industry actions.