Washington’s Favorite Miner 🧲

In 1917, as the world descended deeper into the Great War, America faced a crisis of its own at home. The nation’s railroads — crucial to the war effort — were crumbling under pressure. Freight was jammed, schedules clashed, and American railroads became inefficient in transporting both critical supplies needed for the war and the troops. 

So, President Woodrow Wilson did something drastic: he nationalized the railroads. The newly formed U.S. Railroad Administration took over operations, standardized equipment, and imposed centralized control — marking the largest federal industrial intervention in American history at the time.

Fast forward to 2008. Another crisis was ravaging America and its companies. This time, it was the global financial crisis. It arrived at the doorstep of the iconic American automobile giant General Motors. The U.S. government intervened. It rescued the company by acquiring a 60.8% stake in General Motors (it sold them in 2013). And the legendary automobile maker survived. 

Interestingly, both cases underscore a clear pattern: the U.S. government has historically intervened in private industry only during periods of war or crisis.

But then came July 10, 2025.

In a move with no modern precedent, the Pentagon announced a $400 million investment in MP Materials, America’s sole rare earth mining and magnet company. With it, the Department of Defense took a 15% equity stake, becoming the company’s largest shareholder.

But why did the U.S. government choose MP Materials? 

In this edition of CrossDock, we trace the journey of MP Materials — from its origins to its pivotal role in America's push to reshore rare earth production — and explore what the future holds for the Pentagon’s newest strategic partner.

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The story of MP Materials is intertwined with the story of Mountain Pass Mine. So, let’s begin from there. 

In 1949, a group of prospectors was combing the Clark Mountain Range, a patch of rugged desert terrain in California’s San Bernardino County, just 53 miles southwest of Las Vegas. They were searching for uranium. But instead they stumbled onto something far stranger: a reddish-brown mineral called bastnaesite — rich in rare earth elements few had ever heard of at the time.

Following this discovery,  in 1952, the Molybdenum Corporation of America acquired most of the mining claims and commenced small-scale rare earth production and processing in Mountain Pass. 

But the production was soon ramped up, thanks to television. 

By the mid-1960s, color television had gone mainstream in America. Living rooms across the country glowed with vivid blues, greens, and most importantly, reds. What most people didn’t know was that those brilliant red hues depended on a rare earth element called europium.

And europium came from just one place: Mountain Pass.

As the color TV revolution swept through the U.S. in the 1960s and ’70s, demand for europium skyrocketed. To keep up, production at Mountain Pass was ramped up dramatically. 

It wasn’t just europium. In fact, other Rare Earth Elements (REE) such as gadolinium, samarium, cerium, neodymium, and dysprosium, which were critical for emerging technology and military applications, were mined and processed in Mountain Pass.

According to the U.S. Geological Survey, during the 1960s and ’70s, the Mountain Pass mine processed between 150,000 and 440,000 metric tons of ore annually, producing around 10,000 to 26,400 metric tons of rare earth oxides. 

In 1984, the Mountain Pass mine was supplying over 60% of the world’s rare earth elements – making it a global leader in REE mining and processing. 

But the boom did not last long. 

By the 1990s and 2000s, China began flooding the global market with low-cost rare earths, undercutting producers everywhere. 

At the same time, Mountain Pass was facing mounting environmental challenges and costly regulatory hurdles. Waste management issues, water contamination concerns, and tightening U.S. standards pushed operational costs higher. Investment dried up. Efficiency plummeted. The once-dominant mine was slipping into decline.

That changed in 2008, when a group of investors purchased the site and created Molycorp Minerals LLC — a private venture aimed at bringing Mountain Pass back to life.

For a brief moment, it looked like a comeback. Molycorp went public in 2010, rode the wave of rare earth hype, and even reopened operations. But the economics never worked. China still controlled the global market, prices crashed, and Molycorp’s debts mounted.

Finally, in 2015, Molycorp filed for Chapter 11 bankruptcy, and the Mountain Pass was closed. 

The future of the biggest rare earth mine in the United States was bleak until two childhood friends decided to change that. 

James Litinsky (now CEO of MP Materials) and Michael Rosenthal (now COO of MP Materials) never set out to run a rare earths company. In fact, neither had any background in mining — not even close. Both came from finance, and their original entry into the industry was purely opportunistic: they’d bought Molycorp bonds, hoping to make a profit 

But in 2015, when those bonds went sideways and Molycorp filed for bankruptcy, Litinsky made a trip out to Mountain Pass — just to see what he was really holding. What he found stunned him.

Towering above the Mojave Desert, the site was massive, surreal, and underutilized — a world-class deposit with state-of-the-art infrastructure, left idle. That visit changed everything. Instead of cutting losses, Litinsky decided to buy the mine. 

But it was easier said than done. 

Because there were multiple players eyeing the mine, and there were big bucks involved. 

Interestingly, Litinsky had a clever legal advantage. His firm, JHL Capital, had bought $300 million worth of Molycorp bonds during the bankruptcy. That made him a secured creditor, which allowed him to make a credit bid. This meant he could use the value of those bonds to claim the mineral rights to the Mountain Pass mine without paying cash. It gave him a head start.

But he still needed money to get full operational ownership of the mine. 

So he formed a new entity in 2017 called MP Mine Operations LLC (MPMO). The consortium was led by JHL Capital Group, Litinsky’s investment firm, joined by QVT Financial LP, and Shenghe Resources, a Chinese (partly state-owned) rare earth company. 

Litinsky convinced Shenghe to help finance his bid for Mountain Pass. In June 2017, the consortium won the bankruptcy auction for just $20.5 million, edging out a rival consortium made up of ERP Strategic Minerals, Swiss-based Pala Investments, and Australia’s Peak Resources by a margin of just half a million dollars.

But the real masterstroke came next.

Before production even resumed, Litinsky pre-sold $50 million worth of future output to Shenghe, giving him the cash needed to restart operations. In exchange for the upfront financing, Shenghe was offered a stake in MP Materials. The move kept the lights on, but in some corners of Washington, the partnership raised eyebrows. A Chinese firm helping bankroll America’s only rare earth mine?

It would appear that acquiring one of the world’s most strategic rare earth reserves was the hard part—but for MP Materials, the real test began after the deal was done. 

Yes, the mine now belonged to MP Materials. But they needed to generate revenue, and fast. That’s when Litinsky and Rosenthal hit a major bottleneck.

Mining the ore was just the first step. To unlock its value, it had to go through a complex, technical process. This involved separating rare earth elements from the surrounding rock, then isolating each mineral into a usable form. And here was the catch: almost no one, except for China, knew how to do it efficiently or affordably. It controlled nearly 95% of the REE processing globally. 

And add to this manpower issue.

Hiring was a major hurdle. The site was nearly abandoned, with only eight workers on the ground. “We had no money, only eight people, the site was bankrupt, and everyone was saying the U.S. couldn’t make rare earths,” said operations chief Michael Rosenthal to the Wall Street Journal.

Enter Shenghe. The Chinese rare earth giant offered technical expertise to help restart operations at Mountain Pass and also became MP’s biggest customer. The arrangement was simple: MP would ship its raw ore to Shenghe, who would then sell it to refiners in China. There, the material would be processed, refined, and turned into magnets before making their way back into global supply chains, including those of U.S. companies.

Soon, MP Materials used this footing to establish its own processing operations in the US. And in just two years, by 2019, MP Materials had ramped up operations—reaching a production run rate of over 30,000 metric tons of contained total rare earth oxides, representing nearly 15% of the world’s total rare earth output.

In November 2020, MP Materials went public on the New York Stock Exchange through a SPAC merger with Fortress Value Acquisition Corp, raising approximately $545 million. By the following year, the company had ramped up operations to deliver a record annual output of ~42,400 metric tons of contained TREO.

With production soaring and investor confidence high, MP was no longer just another mining story. Its momentum caught the attention of Detroit.

In 2021, MP Materials announced a partnership with General Motors, signing a long-term agreement to supply U.S.-sourced rare earth magnets for GM’s Ultium Platform. 

It was not just the private sector that was noticing MP Materials; Uncle Sam had his eyes on the company, too. 

In 2010, when China imposed a rare earth export ban on Japan during a territorial dispute, the world woke up to a harsh reality: Beijing will not hesitate to weaponize the critical minerals supply chain.

Most countries, including the U.S., had no domestic capacity to process or produce these materials at scale. In fact, the United States relied on China for more than half its supply of 43 out of the 50 minerals on the U.S. government's own critical minerals list.

At that moment, as the U.S. moved to rebuild its domestic capacity for critical minerals and rare earth magnets, MP Materials quietly emerged as a key player in the effort to bring production back home.

The first wave of support came during the Trump administration, which in 2020 allocated $9.6 million under the Defense Production Act to help MP restart light rare earth separation at Mountain Pass.

Since the mission to bring back rare earth production involved national security concerns, it received bipartisan support. 

In 2021, under the Biden administration $35 million was allocated to MP Materials to support heavy rare earth processing—a capability that didn’t exist anywhere else in the U.S. That was followed by another $45 million grant for oxide processing at Mountain Pass, plus nearly $60 million in tax incentives under the Inflation Reduction Act to jumpstart domestic magnet manufacturing in Texas.

However, things were accelerated after the “Liberation Day” tariffs, which kick-started the tariff war between China and the US. In response to US tariffs, the Chinese government announced an export ban on rare earth magnets to the US. 

A move, according to Litinsky, fast-tracked the government’s plans to invest in MP Materials. In an interview with Bloomberg, he said, “The President had directly mandated that we fix the supply chain [rare earth magnets]”.

On July 10, 2025, in an unprecedented step, the Pentagon announced a $400 million investment in MP Materials. For the first time, the Department of Defense became an equity holder in a publicly traded company, taking a 15% stake and becoming MP’s largest shareholder.

Alongside the equity deal, the Pentagon extended a $150 million loan, offered a 10-year price floor of $110/kg for neodymium-praseodymium oxide, and agreed to purchase 100% of the output from MP’s upcoming 10X magnet facility in Texas. To fund construction of the 10X Facility, MP also secured a $1 billion financing commitment from JPMorgan Chase and Goldman Sachs.

Interestingly, the price is nearly double the current global market rate. But there's a reason for it. The government isn't trying to compete on price; it’s trying to guarantee survival for MP Materials. 

China has long been able to undercut rare earth prices through heavy subsidies and state-backed production, making it nearly impossible for U.S. producers to stay competitive in a purely commercial market. The price floor acts as a strategic shield, ensuring MP Materials can scale production without being crushed by China’s pricing power.

Following in the footsteps of the Department of Defense, just a week after the Pentagon’s $400 million investment in MP Materials, one of America’s most valuable companies made its own strategic move.

In a major move, Apple announced a $500 million commitment to purchase American-made rare earth magnets from MP Materials’ upcoming Independence facility in Fort Worth, Texas. The multi-year agreement is the first of its kind—a rare earth supply deal between a U.S. technology leader and MP Materials. 

The deal centers on custom-engineered magnets built specifically for Apple products. Starting in 2027, MP will supply magnets for hundreds of millions of devices—including iPhones, Macs, AirPods, and potentially other future hardware. 

As part of the partnership, Apple and MP will also launch a dedicated recycling facility at Mountain Pass, California. The plant will process recycled rare earth elements from used electronics and post-industrial scrap, helping Apple move closer to its goal of using 100% recycled rare earths in all magnets.

This partnership is a win-win for both companies. For MP, one of the most important tech companies on the planet is endorsing them, and for Apple, it's a critical step toward reducing reliance on Chinese suppliers while reinforcing its domestic supply chain footprint.

 For all the momentum behind MP Materials, major hurdles still lie ahead.

Firstly, scaling up magnet production at the 10X facility will require a steady supply of heavy rare earths—like dysprosium and terbium—which are crucial for making magnets heat-resistant and high-performance. The problem? MP’s Mountain Pass mine in California primarily yields light rare earths. And outside of China, reliable sources of heavy rare earths are scarce. Acquiring them won’t be easy or cheap.

Next, building and running a massive new facility comes with its own set of risks. There could be delays, rising costs, and technical challenges, especially since magnet manufacturing hasn’t been done at this scale in the U.S. for decades. All of that could lead to real problems along the way.

Then there’s the question of Shenghe Resources.

The Chinese rare earth giant still holds nearly an 8% stake in MP Materials. 

Experts are also raising concerns about competition and market balance. They argue that the government’s strong backing of a single company could push out promising startups, making it harder for others to attract funding or scale up. Over time, that kind of favoritism could weaken overall U.S. competitiveness in the rare earth sector. 

The U.S. government's hands-on approach to bringing rare earth production back home is a move in the right direction. For years, we neglected a group of minerals that not only power modern technologies like EVs and wind turbines, but are embedded in nearly every major defense system.

This is no longer just an economic issue. It’s a matter of national security.

But as Washington ramps up its industrial policy, it must also ensure that the rare earth sector remains competitive. That means creating room for startups, challengers, and new ideas—a much-needed breath of fresh air in a space that’s been dormant for too long.

If the U.S. wants to lead the next era of critical minerals, it can’t just bet on one winner. It needs to build an ecosystem.

This newsletter was written by Shyam Gowtham

Thank you for reading. We’ll see you at the next edition!