Highlights

• The Department of Defense invested $400 million in MP Materials, securing a 15% stake in the company.
• The deal establishes a 10-year price floor and offtake agreement for rare earth magnets, reducing dependency on China.
• The strategic investment creates the first US-controlled light rare earths-to-magnets supply chain in decades.

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In a July 11 blog post for Columbia University’s Center on Global Energy Policy, research scholar Tom Moerenhout (opens in a new tab) offers a comprehensive breakdown of the Department of Defense’s blockbuster public-private deal with MP Materials. The article correctly identifies this deal as historic—marking a fundamental shift in how the U.S. approaches critical mineral security.

What’s Accurate

Moerenhout delivers a fact-rich, sober summary of the deal:

• $400 million equity investment from the DoD gives it ~15% stake in MP Materials.
• A 10-year price floor of $110/kg for NdPr is key to de-risking against China’s market suppression tactics.
• A 10-year offtake agreement for 100% of magnet output from MP’s proposed “10X Facility.”
• $1 billion in commercial loans from JPMorgan and Goldman Sachs.
• A smaller Texas facility is coming online in 2026, with 1,000 MT capacity.
• The result: a vertically integrated, U.S.-controlled light rare earths-to-magnets supply chain for the first time in decades.

It’s clear: the DoD has stepped up as not just a buyer, but a strategic anchor investor across the full value chain. A class of activity Rare Earth Exchanges (REEx) has advocated for since our launch October 2024.

REEx Reflections

The article suggests MP Materials may enter heavy rare earth (HREE) separation, a necessary but technically speculative claim. The author acknowledges that China currently holds nearly all the heavy rare earth elements.  Mountain Pass is not a viable HREE source at industrial scale, at least not as of yet, with the current mine and conditions.  While MP’s ambitions may include some HREE extraction—especially with partners in the future- the feedstock simply doesn’t support large-scale dysprosium or terbium output. That requires outside partnerships—potentially in Brazil or Southeast Asia, as proposed.

The author floats Vietnam and Brazil as HREE partners, while also noting U.S. tariffs could complicate Brazilian deals. This is helpful context, but the path to global HREE independence is still murky, and Columbia does emphasize the lack of Western-scale HREE separation infrastructure.

See the Rare Earth Exchanges (REEx) heavy rare earth element project/deposit rankings database.  At the top of the list, the Myanmar rebels.  Representatives recently joined the REEx forum (opens in a new tab). REEx reached out to the group to propose an interview.  Note Brazil Rare Earths (opens in a new tab) shows promise.

Final Take

This piece is solid, timely, and well-reasoned, but slightly optimistic about HREE timelines and MP’s processing roadmap. Still, Colombia deserves credit for raising the policy bar and clearly articulating the structural market reforms at play. And of course, with the latest financing and government involvement, we can see a pathway for national treasure trove MP Materials to expand into heavies—it will just take time, money, execution, and some fortune.

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