MP Materials Corp. (MP) is making moves that would have seemed impossible a few years ago. The company just announced a three-party joint venture with Saudi Arabia's state-owned mining giant Maaden and the U.S. Department of War to develop a massive rare earth refinery in Saudi Arabia.

This isn't some side project. The refinery will process feedstock from Saudi Arabia and international sources, producing separated light and heavy rare earth oxides for the U.S., Saudi, and allied defense and manufacturing sectors. It's all part of a broader U.S.-Saudi framework on critical minerals, which tells you how seriously Washington is taking the rare earth supply chain problem.

"We are honored that the U.S. government asked MP to partner on a project of this magnitude and importance for America and its allies," said MP Founder and CEO James Litinsky. "By combining MP's technical expertise with the strategic vision of the U.S. Department of War and Maaden's capabilities and scale, the pieces are in place to fundamentally strengthen and diversify the supply chain."

How the Deal Actually Works

The structure here is interesting. Maaden will hold at least 51% of the venture, while MP and the DoW joint venture will collectively hold up to 49%. The Department of War is fully financing the U.S. contribution on a non-recourse basis, meaning MP isn't putting up capital—it's contributing technical expertise and sourcing capabilities instead.

Saudi Arabia brings competitive energy costs, major industrial infrastructure, and ambitions to become a global commodity hub. That's not a bad combination when you're trying to compete with China's rare earth dominance.

This venture builds on MP's already aggressive expansion plans. The company is deploying over $1 billion domestically to boost heavy rare earth separation at its Mountain Pass facility and construct its second U.S. magnet manufacturing facility. On top of that, it holds a separate $1.55 billion Department of Defense funding package that guarantees minimum pricing and stabilizes long-term economics. Goldman Sachs calls this arrangement a structural derisking of the business model, which is analyst-speak for "the government has MP's back."

Wall Street Is Paying Attention

Goldman Sachs recently initiated coverage with a Buy rating and a $77 price target, dubbing the company "the only fully vertically integrated rare earth company in America." That's a big deal when rare earths are critical for everything from electric vehicles to defense systems.

Analyst Peter Oppenheimer highlighted that MP's decision to stop shipping concentrate to China essentially created the backbone of America's magnet and rare earth supply chain. Goldman expects the company to generate $1 billion in earnings by 2030 and potentially supply more than half of domestic NdPR oxides by that time.

Oppenheimer noted that MP's role in the nation's vital supply chain justifies a valuation premium. Translation: This isn't just another mining stock—it's a strategic asset with government backing.

Price Action: MP stock was trading 1.40% higher at $64.44 in premarket activity Thursday. The stock has rocketed 307.37% year-to-date.