By Sam Boughedda
Investing.com — MP Materials Corp (NYSE:MP) shares have strengthened 10% Thursday on the news it will build its initial rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas. In addition, and arguably, more importantly, the company announced it has entered a long-term agreement with General Motors Company (NYSE:GM) to supply rare earth materials, alloy and finished magnets.
They will be used for the electric motors in more than a dozen models using GM’s Ultium Platform, with an incremental production increase that starts in 2023.
The facility will be 200,000 sq. ft and will also serve as the business and engineering headquarters for the company's expanding magnetics division, MP Magnetics.
The deal is one that will be cheered by the Biden administration, with the U.S. needing to increase its rare earth production to meet its EV goals.
The initial facility will be able to produce roughly 1,000 tonnes of finished Neodymium magnets per year, with the potential to power approximately 500,000 EV motors yearly. Furthermore, they will also support other markets, such as clean energy, electronic and defense technologies.
“MP Materials has built an exceptional magnetics team and important commercial relationships that will accelerate our mission to restore the full rare earth supply chain to the United States,” said MP Materials Chairman & CEO James Litinsky.