MP Materials, the US Department of War (DoW) and the Saudi Arabian Mining Company (Maaden) have entered into a joint venture (JV) to develop a rare earth refinery in Saudi Arabia.

This partnership follows the recent US and Saudi Arabia strategic framework agreement announced in Washington DC for cooperation on securing critical supply chains.

MP Materials said the JV represents a significant step towards rebalancing the global rare earth supply chain and aligns with US economic and national security interests.

The facility will leverage Saudi Arabia’s competitive energy base, advanced infrastructure, strategic location and substantial untapped rare earth resources, aiming to ensure a stable and secure supply chain for rare earth materials.

Designed to process rare earth feedstock from Saudi Arabia and other regions, the refinery will produce significant quantities of separated light and heavy rare earth oxides (REOs).

These refined products will supply manufacturing and defence industries in both the US and Saudi Arabia and will also be marketed to allied nations.

MP Materials founder, chairman and CEO James Litinsky said: “We are honoured that the US Government asked MP to partner on a project of this magnitude and importance for America and its allies. By combining MP’s technical expertise with the strategic vision of the US Department of War and Maaden’s capabilities and scale, the pieces are in place to fundamentally strengthen and diversify the supply chain.”

The rare earth refinery JV is structured to ensure US oversight and alignment with national security objectives.

Under the agreement, MP Materials and the DoW, through a JV, will collectively hold a target equity stake of 49%, while Maaden will hold no less than 51%.

The DoW will provide full, non-recourse financing for the US JV’s capital contribution.