The US government is going to become the biggest owner of shares in MP Materials, a company that's only working rare earths mine, which is located in Mountain Pass, California.
Rare earth metals are very important for making many modern technologies, like electric cars and wind turbines as these metals are needed to build key parts of such devices.
As per multiple reports, the US Department of Defence bought $400 million worth of its preferred stock to help reduce the country's reliance on rare earth imports from other nations.
As part of the agreement, for the next 10 years, the US government will make sure that MP Materials gets at least $110 per kilogram for two important rare metals which is neodymium and praseodymium.
After this news, MP Material's stock price increased by around 50%.
Rare earth metals are also very important as they are used to make magnets which are necessary for military equipments like F-35 fighter jets, drones and submarines.
In 2023, the US mostly depended on other countries to get rare earth metals and about 70% of these imports came from China.
Because of this heavy reliance, rare earths have become a major issue in trade tensions between the US and China.
Considering this, the Trump administration said that depending less on other countries especially on China for rare earth metals is very important for the US.
Under the agreement, MP Materials will build a new factory in the US to improve its ability to process raw materials it gets from its mine and turned them into useable products.
However, the exact place where this factory will be built has not been chosen yet but the company says it will provide materials to both military and private companies.
