07:31 AM EDT, 07/10/2025 (MT Newswires) -- MP Materials ( MP ) said Thursday it has entered into a public-private partnership with the US Department of Defense to accelerate the creation of a US rare earth magnet supply chain.

The company said the deal includes a "multibillion-dollar package of investments and long-term commitments" from the Pentagon and that it will build a second domestic magnet manufacturing facility that will increase its US rare earth magnet manufacturing capacity to about 10,000 metric tons upon completion in 2028.

Under the deal, the department has entered into a 10-year agreement establishing a minimum commitment of $110 per kilogram for MP Materials' ( MP ) neodymium-praseodymium products, the company said.

The DoD has also agreed that all of the magnets produced at the new facility will be purchased by defense and commercial customers with shared upside, the company said.

The department has also agreed to purchase $400 million of preferred stock and a warrant permitting DoD to purchase additional shares, making it the company's largest shareholder, the company said, adding that the deal scheduled is to close on Friday.

The company said it has obtained a commitment letter from JPMorgan Chase (JPM) Funding and Goldman Sachs (GS) Bank USA to provide $1.0 billion of financing for building its second facility.

The company said it also expects to add heavy rare earth separation capabilities at its Mountain Pass, California, facility with financing supported by a $150 million loan from the DoD.

MP shares were up more than 40% in recent premarket activity Thursday.