Key Takeaways
- MP Materials secured a significant rare earth supply agreement with an unidentified automaker characterized as “one of America’s leading industrial and technology companies”
- The agreement includes neodymium-praseodymium oxide, an essential component in electric motor production
- The company is committing more than $1.25 billion to construct a magnet production campus in Northlake, Texas, dubbed “10X”
- The Northlake site is projected to generate over 1,500 jobs and begin operations in 2028, with annual production targets of approximately 10,000 metric tons of rare earth magnets
- Following a $400 million investment in 2024, the U.S. Department of Defense maintains a 15% ownership position in MP Materials
MP Materials announced Thursday that it has finalized a rare earth supply agreement with an undisclosed automotive manufacturer, a revelation that accompanied the company’s fourth-quarter earnings results, which surpassed Wall Street projections.
The agreement encompasses neodymium-praseodymium oxide, a critical element in electric motor manufacturing. While describing the unnamed partner as “one of America’s leading industrial and technology companies,” MP Materials declined to disclose the buyer’s identity or financial terms of the arrangement.
During the earnings conference call, CEO James Litinsky noted that current demand throughout the supply chain remains robust. “We’re having a lot of conversations,” he remarked.
MP Materials maintains an existing supply arrangement with General Motors that encompasses rare earth materials, alloys, and finished magnets, making this newly announced contract the company’s second significant automotive partnership.
Accompanying the earnings release was a substantial capital expenditure announcement. MP Materials revealed plans to deploy over $1.25 billion toward constructing a rare earth magnet manufacturing complex in Northlake, Texas.
Dubbed “10X,” the Northlake campus represents an expansion of the company’s current Fort Worth operations, strengthening the North Texas presence of America’s sole domestic rare earth mineral producer.
The facility is scheduled to commence operations in 2028. Upon reaching full capacity, it will elevate MP Materials’ total annual production capability to approximately 10,000 metric tons of rare earth magnets.
MP Materials anticipates creating more than 1,500 direct manufacturing and engineering positions at the location. Engineering design work and equipment acquisition are currently in progress.
Defense Department Backing
The Texas manufacturing complex stems directly from MP Materials’ strategic collaboration with the United States Department of Defense. In July 2024, the Pentagon acquired a 15% equity stake in the company through a $400 million investment.
The agreement mandated that MP Materials construct a new manufacturing facility capable of producing rare earth magnets at a volume substantially exceeding current domestic capacity — explicitly designed to diminish reliance on Chinese suppliers.
Rare earth magnets find applications in automobiles, wind energy systems, fighter aircraft, and missile defense platforms, positioning them at the center of ongoing U.S.-China trade tensions.
Chinese Export Restrictions
Beijing implemented rare earth export limitations following President Trump’s imposition of substantial tariffs on Chinese imports in April of last year. While a trade agreement was negotiated in June, supply chain concerns persist.
This environment has accelerated efforts by American manufacturers to identify reliable domestic suppliers, with MP Materials standing as the only U.S.-based company extracting rare earths at commercial scale.
Litinsky suggested it would be “natural to conclude” that multiple supply contracts will emerge from the 10X facility following its launch.
The company is presently negotiating with additional organizations regarding magnet supply from the Texas plant, although no additional agreements have been finalized.
Fourth-quarter financial results exceeded analyst forecasts, providing the company with strong financial positioning as it enters this significant investment phase.
MP Materials stock was trading at $59.97, down 0.15%, at the time of reporting.
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