MP Materials said Wednesday it signed a new binding joint venture deal with the U.S. Department of Defense and Saudi Arabia’s Maaden to build a rare earth refinery inside the kingdom.

MP and the Pentagon will share a 49% stake, while Maaden will hold no less than 51%, according to the company.

The deal sent MP’s shares up 9% during trading. The U.S. government will fully fund the American side of the project.MP will contribute technical and marketing support, but no cash.

This project is structured to guarantee American oversight of the operation, with the goal of aligning with national defense goals. “The agreement will significantly expand MP’s global footprint,” the company said, adding it will “ensure U.S. oversight and alignment with national security objectives.”

Pentagon backs MP in rare earth push

The announcement follows a memorandum of understanding signed in May between MP and Maaden. The new deal finalizes the terms and puts real capital into play.

The refinery will serve as a critical supply base for rare earth materials used in military systems, electric vehicles, clean energy infrastructure, and semiconductor manufacturing.

MP is also in separate talks with Saudi officials to set up local magnet production inside the country. While those discussions are still ongoing, the aim is to add another layer of domestic manufacturing capacity outside of China.

This latest move builds on a July agreement between MP and the Pentagon. That deal gave the Defense Department an equity stake, a price floor, and a guaranteed supply agreement (offtake) with MP to support U.S. efforts to reduce dependence on China, which currently dominates the global rare earth market.

MP’s CEO James Litinsky called the company the United States’ “national champion” for rare earths. The minerals are essential for guided missile systems, radar, and fighter jets, as well as commercial sectors like electronics and EV batteries.

Wall Street also took notice. Goldman Sachs began coverage on MP this week, setting a price target of $77, which suggests a 32% upside from Monday’s close.

Analyst Brian Lee told clients: “We believe MP’s downstream expansion into refining and magnet production, accelerated by a partnership with the U.S. government, will strategically position MP as a key supply chain component for rare earth refining and magnet production.”

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