The majority stake in the MP Materials rare land mining company is set to be acquired by the US Department of Defense as part of Washington’s effort to find new, non -Chinese sources of critical materials.

To acquire the majority package of MP Materials, the Pentagon will pay $ 400 million in cash for the purchase of corresponding stock value, and will additionally provide the company of $ 150 million.

MP Materials, headquartered in Las Vegas, holds the only rare land mine in the United States, in Mountain Pass, California.

CEO Jim Litinsky said the company aims to restore the supply chain of rare land in the United States and to eliminate the “unique point of failure” at the country’s military -industrial base.

“Recent events have demonstrated the urgency of this mission,” Litinsky said in a telephone conversation on Thursday with investors.

China dominates the market for “rare lands”, which are essential for the manufacture of industrial magnets used in military aircraft, such as drones, as well as in the automotive industry.

In April, the Trump government ordered the Ministry of Commerce to explore the impact on national security arising from imported critical minerals and their related products, which could lead to new tariffs.

Beijing responded by depriving the US automakers critical for their operations, seeking an advantage in commercial talks with President Donald Trump.

Finance Minister Scott Bessed said last week that a new deal with China will increase the offer of rare earth magnets.

However, US governments have long been seeking to reinforce domestic sources of rare land.

Although other companies are trying to develop their rare earth’s activities, MP Materials has the strongest presence in the field and calls itself as a “national champion” in the race for a fully integrated supply chain.

In 2022, the company received $ 45 million from the Biden government and is soon expected to start producing magnets on behalf of General Motors.

In addition to direct participation in MP Materials, the US Department of Defense will make a $ 150m loan to the company to help the company expand its capabilities on Mountain Pass. The company has also secured $ 1 billion funding from investment banks.

As part of the deal, the company agreed to build a second factory for rare magnets and the Ministry of Defense, for its part, pledged to ensure that all the production of the unit in question was absorbed either by the defense sector or by commercial customers for 10 years.

“We understand that this cooperation is ultimately for the benefit of our taxpayers and our national security, and therefore we are responsible for doing it right,” Litinsky said.