SMM Flash: US Issues $150M Strategic Loan to MP Materials for Heavy REE Separation, Accelerating Supply Chain Decoupling from China

[SMM Flash News: US Issues First Strategic Loan of $150 Million to Enhance MP's Heavy REE Separation Capacity: Accelerating "Decoupling from China" in REE Supply Chain] The Office of Strategic Capital (OSC) has taken a significant step by providing a direct loan of $150 million to MP Materials, aiming to strengthen the industrial foundation of the US and ensure the stability of the critical minerals supply chain. This move is part of a broader cooperation agreement reached between the Department of Defense and MP Materials in July 2025, with the funds specifically earmarked for expanding the heavy rare earth elements (REEs) separation capacity at the processing facility in Mountain Pass, California.

Notably, MP Materials holds a pivotal position as the sole owner and operator of a rare earth mine in the US. Deputy Secretary of Defense Emil Michael emphasized that the loan not only revitalizes the industrial foundation but also holds profound significance for restoring the critical minerals supply chain and rebuilding military capabilities. The source of these funds can be traced back to the "Great and Beautiful Act," which was officially signed by President Trump on July 4, 2025. This act provided OSC with substantial credit subsidy funds totaling $500 million, with the potential to leverage up to $100 billion in loans specifically to support critical minerals production and related industrial projects.