(Reuters) -MP Materials said on Wednesday it will form a rare-earth refining joint venture in Saudi Arabia with the U.S. Department of Defense and the state-owned Saudi Arabian Mining Company (Maaden).
Shares of the company, which operates the only U.S. rare earths mine in Mountain Pass, California, rose more than 8% in premarket trading.
Saudi Crown Prince Mohammed bin Salman is making his first U.S. visit since 2018, aimed at touting deepening commercial ties between the two countries.
In May, the U.S. and Saudi Arabia announced billions of dollars in investments in both countries during President Donald Trump’s four-day visit to the Middle East.
The company said on Wednesday the initiative builds on its multibillion-dollar deal with the U.S. government announced in July to boost output of rare earth magnets and help loosen China’s grip on the materials used to build weapons, electric vehicles and many electronics.
Under the deal, MP Materials and the defense department, through a joint venture, will hold a combined 49% stake, with Maaden retaining no less than 51%.
Trump has ordered the Department of Defense to rename itself the Department of War, a change that will require action by Congress.
The company said it is also in discussions to support or collaborate on magnet manufacturing in Saudi Arabia.
(Reporting by Pooja Menon in Bengaluru; Editing by Krishna Chandra Eluri and Sriraj Kalluvila)
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