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Building America’s Defense Critical Metals Supply
MP Materials (NYSE: MP), the only fully integrated producer of rare earth materials in the United States, announced Wednesday the formation of a joint venture with the U.S. Department of Defense (DoD) and Saudi Arabia’s state-owned mining company, Maaden, to build a rare earth refinery in the kingdom. The news sent its shares sharply higher.
The company’s stock rose 8.61% to close at $63.55, bringing its year-to-date gain to nearly 290%, buoyed by a series of strategic partnerships with the U.S. government.
Under the binding agreement, MP Materials and the DoD will collectively hold a 49% stake in the joint venture through a single entity, while Maaden will retain a controlling interest of no less than 51%. The Pentagon will provide full financing for the U.S. equity contribution, and MP Materials will contribute its technical expertise in rare earth separation and refining.
The formation of this joint venture was described by the company as “a pivotal step toward rebalancing the global rare earth supply chain and aligns with U.S. economic and national security interests.” We are honored that the U.S. government asked MP to partner on a project of this magnitude and importance for America and its allies, said MP Materials CEO James Litinsky in a press release. This demonstrates how our fully integrated platform can project U.S. industrial capability abroad.
The announcement comes just a day after Saudi Crown Prince Mohammed bin Salman pledged to invest $1 trillion in the United States, significantly deepening commercial ties between the two nations.
The Saudi joint venture leverages the kingdom’s competitive energy base, infrastructure, and untapped rare earth resources. Once operational, the facility will process feedstock from Saudi Arabia and other regions, producing separated light and heavy rare earth oxides to supply the U.S. and Saudi manufacturing and defense sectors, as well as allied nations.
This move accelerates a broader Western effort to reduce reliance on China, which currently dominates the market, accounting for about 60% of global mine supply and nearly all processing capacity.
The Saudi deal builds upon a multi-billion-dollar public-private partnership MP Materials and the DoD unveiled in July 2025. Under that foundational agreement, the company plans to invest up to $1 billion to significantly expand U.S. rare earth refining and magnet manufacturing capacity. Key projects include building a second magnet manufacturing facility in the U.S. and expanding its heavy rare earth separation capabilities at its Mountain Pass mine in California.
MP Materials is also in discussions to support or collaborate on magnet manufacturing in Saudi Arabia, further extending its global footprint.
Wall Street has responded positively to MP’s strategic direction. Goldman Sachs initiated coverage of the company on Tuesday with a buy rating and a $77 price target, implying a 32% upside from Monday’s close. We believe MP’s downstream expansion into refining and magnet production, accelerated by a partnership with the U.S. government, will strategically position MP as a key supply chain component, Goldman Sachs analyst Brian Lee wrote in a note to clients.
The series of agreements solidifies MP Materials’ role as a central player in the West’s strategy to build a independent and resilient rare earth supply chain.
