America's rare earth renaissance: Can Pentagon's ambitious move shake China's dominance?

Mercurial and highly unpredictable, President Donald Trump has put the US on a collision course with China. Amid the hot and cold tariff war, the US government has become the biggest shareholder in country’s sole rare earths mine.

The boldest move by the Trump administration is an effort to halt China’s hawkish policy of weaponising rare earths. So how does this pivot the world of rare earths that are key components – form computers to combat jet? Will this really stop Beijing, which is the home to 70 percent of world’s rare earth mining, from dictating the terms to the world?  Experts are sounding cautious and saying its too soon to figure out the impact of the Pentagon’s power move on world trade.

Tech guru Rod Martin is calling it a ‘masterstroke’. In a long thread on X, Martin, who was part of the team that started PayPal, blamed the previous US governments for dependence on China – Jimmy carter to be precise. He says that the US can easily supply 85 percent of the global needs. But the reluctance in mining rare earths in the US led to Beijing becoming the global leader. But he feels that with Pentagon becoming main buyer of the rare earths, there will be ‘no more begging China.’

🚨BREAKING: The Pentagon is becoming the largest shareholder in an American rare earth mining company.

This is one of the biggest moves yet to decouple from China—and it's a Trump administration masterstroke.

Here’s what just happened—and why it matters 🧵 pic.twitter.com/B1hNwTc1uQ

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— Rod D. Martin (@RodDMartin) July 10, 2025

As per the government documents, America’s Department of Defense has announced a $400 million investment in MP Materials. The company is the owner of the sole rare earth mining in the US, which is located in California.

Apart from the US government, JP Morgan Chase and Goldman Sachs have also committed a $1 billion investment. The agreement envisions a brand new mega rare earths plant. Martin also listed out details of the agreement, which include $400 million preferred stocks, 10-year purchase guarantee, $140 million minimum revenue floor and $150 million loan. As soon as the news surfaced, the stocks of MP Materials surged 60 percent in New York, the Bloomberg noted.

Jefferies LLC analysts told Bloomberg that the commitment by the Trump administration will ‘directly counters China’s rare earth dominance.’

In a statement, MP Materials said that the latest round of funding will help in setting up another magnet manufacturing plant. Named 10X Facility, second magnet plant will be set up at a “soon-to-be-chosen” site, MP Materials said.

The agreement states that the facility is targeting commissioning by 2028. Once it becomes operational, the facility will amp up American magnet output to 10,000 tons a year, MP Materials said. Company CEO Jim Litinsky called the agreement with Pentagon as ' unprecedented situation.'