# MP Materials DoD Rare Earth Partnership In **July 2025**, the Department of Defense invested **$400 million in preferred stock and warrants** in [[MP Materials]] — a position amounting to roughly **15% of the company** if converted and exercised, which would make **the Pentagon MP's largest shareholder.** It was the first of the second-term equity deals and it set the template that [[Intel Government Equity Stake]] later scaled. ## What the government actually bought The equity is the headline, but it is not the part that changes MP's business. Three things came in the same package: 1. **The stake** — $400M in preferred stock plus warrants, ~15% fully converted. 2. **A price floor** on certain rare earth production. This is the economically decisive term: it removes the risk that China floods the market and prices a domestic producer out of existence, which is precisely how previous American rare-earth ventures died. 3. **A magnet offtake commitment** — DoD agreeing to buy the magnets MP plans to manufacture. A price floor plus a guaranteed buyer is closer to a **wartime production contract** than to an investment. The equity is arguably the least important piece; it is the government taking a share of the upside on a business it is simultaneously guaranteeing. ## The legal hook Executed under **Title III of the [[Defense Production Act]]** (50 U.S.C. § 4533), which authorizes the president to make "purchases of or commitments to purchase an industrial resource or a critical technology item" and to provide "for the development of production capabilities" — and, critically, to do so **"without regard to the limitations of existing law"** so long as the money is appropriated. That "without regard" clause is the widest authority in this entire policy area. It is also the reason DPA Title III is the likely vehicle if the administration extends equity-taking to defense contractors, as Commerce Secretary [[Howard Lutnick]] has publicly floated: it can be read to waive statutory restrictions elsewhere in the code, including the Government Corporation Control Act. ## Why MP The strategic case is the strongest of any deal on the roster. The U.S. imports roughly **72% of its rare earth elements from China**, which controls **over 90% of global refining**. MP operates Mountain Pass — the largest rare-earth deposit in the Western Hemisphere and the only fully integrated domestic producer spanning mining through magnets. If you are going to build a parallel supply chain at all, MP is where you start. ## The contrast worth drawing MP is the deal that looks like industrial policy done straight: a real chokepoint, an obvious company, terms that address the actual failure mode. Public reporting has **not** tied MP's selection to White House intervention. That matters because the adjacent deal did not clear the same bar. The [[Vulcan Elements OSC $620M Pentagon Loan]] — same sector, same rationale, same year — was, per ProPublica, initiated by a White House request benefiting a firm partly held by a [[Donald Trump Jr.]]-linked fund. Placing the two side by side is the cleanest way to see the problem with the program as a whole: **the genuine strategic rationale is what makes the crooked version hard to challenge.** MP is the reason nobody can dismiss the critical-minerals push as a pretext. Vulcan is the reason nobody should assume it isn't one. ## Connections - The ledger: [[Government Equity Stakes Roster]] - The frame: [[American State Capitalism]] - The dirty adjacent deal: [[Vulcan Elements OSC $620M Pentagon Loan]] - The sector: [[Critical Minerals]] ## See Also - [[MP Materials]] - [[Defense Production Act]] - [[Office of Strategic Capital]] - [[Government Equity Stakes Roster]]