Pentagon becomes shareholder in rare earth company

The US Department of Defense has reached an agreement with an American rare earths company, becoming its main shareholder, the company announced on Thursday (10).

Rare earths, 17 elements discovered in Sweden at the end of the 18th century, each with unique properties, are essential for the economy of the future, especially for energy transition and electronic technologies.

US President Donald Trump has expressed a keen interest in these minerals and included them in an aid deal with Ukraine in February and in current trade negotiations with China.

This “transformative agreement […] will dramatically accelerate the development of a comprehensive supply chain for rare earth magnets in the United States and reduce dependence on external sources,” MP Materials explained in a statement.

Thanks to a "multimillion-dollar investment package" and the Pentagon's "long-term commitment," the company plans to build a second magnet manufacturing facility. Production, scheduled to begin in 2028, is expected to serve both defense and private sector customers.

Under the agreement, the Department of Defense will acquire the equivalent of $400 million (R$2.2 billion) in newly issued convertible preferred shares, as well as the right to purchase common shares.

The Department of Defense is expected to acquire a 15% stake in MP Materials, making it its largest shareholder. Furthermore, the U.S. government has committed to investing billions of dollars in the company.

At around 18:45 GMT (15:45 in Brasília), MP Materials shares were up more than 50%, trading at US$45.23 on the New York Stock Exchange.

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