Critical Minerals, Critical Stakes: Inside the Pentagon’s Bet on MP Materials

The U.S Department of Defence just sent a clear message: critical minerals are no longer just commodities—they are cornerstones of sovereignty.

In a move that breaks from decades of market orthodoxy, the U.S. Department of Defense (DoD) is set to become the largest shareholder in MP Materials Corp., America’s only rare earths mining and processing company of significance. This investment—part of a multi-million dollar deal—is more than just a capital injection. It’s a strategic hedge against a future where the United States can no longer afford to outsource its most critical industrial dependencies.

MP Materials, headquartered in Las Vegas, operates the Mountain Pass mine in California, the only active and scaled rare earths production site in North America. This mine alone produces about 15% of the global rare earth concentrate supply—a small but vital foothold in a market still dominated by China, which controlled 70% of U.S. rare earth imports from 2020 to 2023, according to the U.S. Geological Survey (infographic below).

The DoD’s equity purchase, valued at an estimated $400 million, is designed to accelerate MP’s downstream processing capabilities, specifically for separating and refining rare earth oxides domestically, reducing the need to ship concentrates back to China for processing, as has been the case in recent years.

Why This Matters Now?

Rare earth elements (REEs) such as Neodymium, Praseodymium, Scandium, and Yttrium are critical to advanced defense systems—think fighter jets, missile guidance, radar, and hypersonic weapons—as well as electric vehicle motors, wind turbines, and microelectronics. The U.S. remains 100% reliant on imports for Scandium and Yttrium, and 80% reliant for Lanthanides, the group of 15 soft, silvery metals foundational to clean tech and national defense.

The DoD's investment in MP Materials isn’t just about building domestic capacity—it’s about securing strategic autonomy in a world where China has already demonstrated its willingness to restrict mineral exports during diplomatic or trade flare-ups.

From Market Forces to Industrial Strategy

This bold step is reminiscent of wartime industrial policy, when the U.S. government didn't wait for markets to solve critical shortages but instead led with capital, coordination, and urgency. While some may argue that government ownership distorts market dynamics, the context has shifted. Free markets cannot defend a nation when supply chains are weaponized.

This decision is part of a broader trend:

• In 2022, Australia backed Lynas Rare Earths with government funding.

• In 2024, the European Union passed its Critical Raw Materials Act, targeting strategic independence in rare earths, lithium, and cobalt.

Implications for Industry, Policy, and the Planet

The Pentagon's investment may ignite broader debates:

• Should the government actively participate in strategic commodity markets?

• How will this affect global pricing, private-sector competition, and mining innovation?

• What are the environmental and social costs of bringing rare earth mining back home?

Make no mistake—rare earth mining and processing is a dirty, capital-intensive, and environmentally sensitive business. If the U.S. is to rebuild its domestic supply chain, it must do so with transparency, sustainability, and Indigenous consultation at the forefront.

Toward a New Industrial Compact?

What we are witnessing could mark the start of a new industrial compact, where national resilience, economic strategy, and environmental responsibility converge. The Pentagon’s stake in MP Materials isn’t just about securing rare earths. It’s about reclaiming industrial leadership in a world where mineral security is national security.

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