May 14 (Reuters) - U.S. rare earths miner MP Materials ( MP )

said on Wednesday it has signed a memorandum of

understanding with Saudi Arabia's flagship mining company

Ma'aden to jointly develop a rare earth supply chain in the

Middle Eastern country.

WHY IT'S IMPORTANT

The agreement was signed on the sidelines of the U.S.-Saudi

Investment Forum, where President Donald Trump secured a $600

billion investment from the kingdom which covered the energy,

defense and mining sectors.

Saudi Arabia has been pushing to become a global critical

minerals hub at a time when minerals processing is fast becoming

a necessity for tech-focused economies looking to produce their

own building blocks for AI, electric vehicles and other sectors.

CONTEXT

Last month, Reuters reported Ma'aden was weighing a

rare-earths partnership with at least one of four foreign firms,

including MP Materials ( MP ), China's Shenghe Resources,

Australia's Lynas Rare Earths ( LYSCF ) or Canada's Neo

Performance Materials ( NOPMF ).

The partnership between MP Materials ( MP ) and Ma'aden would

include mining, separation, refining and magnet production of

rare earth minerals.

KEY QUOTES

"Today's announcement is an important first step towards

rebalancing the global supply chain ... especially in robotics

and physical AI - while deepening the strategic alliance between

the United States and Saudi Arabia," said MP Materials ( MP ) CEO James

Litinsky.

Ma'aden's CEO Bob Wilt said the partnership was an integral

step towards establishing mining as "the third pillar" of the

Saudi economy.

MARKET REACTION

Shares of MP Materials ( MP ) rose nearly 5% before the bell.