MP Materials, a rare earth company based in the United States, announced on Wednesday (November 19) its collaboration with the Pentagon and the Saudi Arabian state-owned mining company Maaden to build a rare earth refining plant in Saudi Arabia. This initiative aims to enhance the processing capabilities of key minerals in the Middle East and reduce reliance on rare earths from China.
Meanwhile, Saudi Crown Prince Mohammed bin Salman is currently visiting the U.S. capital, marking his first visit to the White House since 2018. The primary focus of his visit is to strengthen economic and security ties between the two countries.
MP Materials operates the only rare earth mine in the United States and agreed to accept investment from the Pentagon in July, making the U.S. government its largest shareholder and financial supporter. The company’s stock price rose by 4.2% in early trading on Wednesday.
According to Reuters, under the agreement, MP Materials and the Pentagon will jointly hold a 49% stake in the Saudi refining plant through a joint venture, while Maaden will hold the remaining 51%.
The project builds upon a multi-billion dollar cooperation agreement reached with the U.S. government in July, aimed at increasing production of permanent magnet materials and helping to weaken the dominance of competitors in key materials required for weapons, electric vehicles, and various electronic products.
Currently, China holds a monopoly in the global rare earth refining sector, with rare earths being fundamental to several key technologies. During the trade war, the Chinese Communist Party restricted exports of critical minerals, prompting Western countries including the U.S. to rebuild their rare earth supply chains.
Meanwhile, the flourishing mining industry in Saudi Arabia is a crucial pillar of Crown Prince Salman’s “2030 Vision” plan, which aims to achieve economic diversification and reduce dependence on oil.
James Litinsky, CEO of MP Materials, expressed gratitude for the invitation from the U.S. government to participate in such a significant project, highlighting the honor it brings to the company.
MAADEN CEO Bob Wilt described the joint venture as a “key step in driving the development of this important global industry,” emphasizing its alignment with Saudi’s economic vision.
The upcoming facility will refine rare earths from Saudi Arabia and other regions into heavy and light rare earth oxides, each with various applications in commercial and military sectors.
Processed materials will be utilized in the manufacturing and defense industries of the U.S. and Saudi Arabia, as well as sold to allied nations.
Since 2020, MP Materials has been refining rare earths in California, striving to enhance the extraction process. Standard rare earth refining processes may encounter issues such as pollution, high costs, and time consumption, prompting scientists to seek more efficient methods.
Rare earth processors must deal with 17 different metals varying in atomic size and weight, complicating the separation process due to their similar characteristics.
MP Materials stated that they are also in discussions with Saudi Arabia to support or collaborate on producing magnets in the country.
This collaborative project broadens MP’s global industry footprint, deepens economic and security ties between the U.S. and Saudi Arabia, and advances the establishment of a more resilient rare earth supply chain.