Strategic Partnership with Pentagon Fuels MP Materials Stock Surge

Shares of MP Materials, a leading American rare earth elements producer, experienced a significant uptick yesterday, climbing 8.61% to close at $63.55. This notable advance was driven by the announcement of a landmark three-party agreement involving the Pentagon and Saudi Arabia, a deal with the potential to reshape global supply chains for critical minerals.

Market analysts are taking notice of the company's strategic direction. Goldman Sachs commenced coverage on MP Materials with a "Buy" rating, assigning a $77 price target. This projection suggests an approximate 32% upside from current levels. Analyst Brian Lee highlighted that the company's expansion into downstream refining and magnet manufacturing strategically positions it as a crucial component within the supply chain.

Despite the recent surge, the stock remains more than 35% below its 2025 peak of $98.65, reached on October 14. It is currently testing a key technical level at the 100-day moving average of $65; a decisive break above this point could potentially accelerate bullish momentum heading into 2026.

A Landmark Deal Reshapes the Global Landscape

The catalyst for this movement is a binding agreement between MP Materials, the U.S. Department of Defense, and Saudi Arabia's mining enterprise, Maaden. This partnership represents the first major implementation of the U.S.-Saudi cooperation framework for critical minerals, which was formally signed in Washington earlier this week.

The venture's ownership structure is defined as follows: MP Materials and the Pentagon will collectively hold a 49% stake, while Maaden will retain majority control with at least 51%. A key financial detail is that the Pentagon will provide the complete funding for the U.S. portion of the investment, requiring no capital outlay from MP Materials. In return, the corporation will contribute its specialized technical expertise in rare earth separation and refining, alongside its global procurement and marketing capabilities. This capital-light structure is designed to unlock strategic value while accelerating the company's growth trajectory.

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"We are honored that the U.S. government selected MP as its partner for a project of this magnitude and significance," commented CEO James Litinsky.

Saudi Refinery Marks Strategic International Expansion

The planned construction of a refinery in Saudi Arabia will leverage the Kingdom's competitive energy resources and world-class infrastructure. The facility is slated to process rare earth feedstocks sourced from within Saudi Arabia and other international regions. Its output is expected to include substantial quantities of both light and heavy separated rare earth oxides, destined for manufacturers in the U.S., Saudi Arabia, and allied nations.

This international venture significantly expands MP Materials' operational footprint beyond its flagship asset, the Mountain Pass mine in California. Mountain Pass is currently the world's second-largest rare earth mine. The company also operates the Independence magnet manufacturing facility in Texas, which serves major clients including Apple, General Motors, and the Pentagon.

Building on a Foundation of Government Partnership

The new Saudi venture builds directly upon a multi-billion dollar public-private partnership with the U.S. Defense Department that was announced in July 2025. That landmark agreement made the Pentagon the company's largest shareholder, guaranteed a 10-year minimum price of $110 per kilogram for Neodymium-Praseodymium (NdPr) oxide, and secured a 10-year offtake agreement for rare earth magnets.

As part of its broader growth strategy, MP Materials is investing over $1 billion and creating more than 1,000 manufacturing jobs in the United States. The company's operational performance remains strong, with record NdPr production in Q3 2025 jumping 51% year-over-year to 721 metric tons. Management anticipates a return to profitability starting in the fourth quarter of 2025.