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MP Materials secures heavy rare earth processing contract with the U.S. Department of Defense

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(Kitco News) - MP Materials (NYSE: MP) today announced it has been awarded a $35 million contract with the U.S. Department of Defense (DoD) to support the construction of a commercial scale processing facility for heavy rare earth elements (HREE) at Mountain Pass.

The company said that in a separate contract awarded in December 2020, the DoD committed $9.6 million to MP Materials' Stage II optimization, a project underway to restore LREE processing capabilities to Mountain Pass.

HREEs have higher atomic weights and are generally less abundant than light rare earth elements (LREEs). They are essential inputs to many critical defense and commercial technologies, particularly permanent magnets instrumental to the performance of electric vehicles, wind turbines, drones, and missile systems.

According to the company's statement, the ability to process HREEs alongside LREEs will enable MP Materials to extract and refine all rare earths required to manufacture high-performance permanent magnets. It will also enable the company to recycle all recoverable rare earths from end-of-life magnets and magnet production scrap, increasing the resiliency and environmental sustainability of the domestic supply base.

"The ability to mine, process, and refine rare earths at Mountain Pass is foundational to a national effort to secure the U.S. rare earth supply chain," said MP Materials Chairman and CEO, James Litinsky. "We thank the Department of Defense for its confidence and support."

In addition to its mining and processing operation at Mountain Pass, MP Materials said it is developing a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas.

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"Materials sourced from Mountain Pass will be transformed into manufactured products at this new facility, restoring a wholly domestic and vertically integrated U.S. magnetics supply chain," the company added.

In December 2021, MP Materials entered into a long-term agreement with General Motors to supply U.S.-sourced and manufactured rare earth materials, alloy, and finished magnets for the electric motors used in the GMC HUMMER EV, Cadillac LYRIQ, Chevrolet Silverado EV, and more than a dozen models using GM's Ultium Platform.

MP Materials is the largest producer of rare earth materials in the Western Hemisphere. The company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility in California, North America's only active and scaled rare earth production site.

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