On August 7, President Trump sat down with a room full of mining executives at a White House roundtable on critical minerals, and MP Materials CEO James Litinsky held up a palm-sized case with two silvery magnet pieces inside. “You told us a while back to make magnets — here they are,” Litinsky told the president. “This is MP’s magnet for GM. Mined and processed in California, made in Texas. One hundred percent American.” The moment made headlines. What actually matters more than the photo-op is the price floor agreement sitting underneath it.
A price floor agreement, in plain terms, is a promise from a buyer — here, the U.S. Department of Defense — to make sure a seller never gets paid below a set price, no matter what the open market does. MP Materials’ version runs for ten years: the Pentagon guarantees a minimum of $110 per kilogram for neodymium-praseodymium (NdPr), the core ingredient in the permanent magnets used in everything from electric motors to fighter jets. If the market price falls below that, the Pentagon pays MP Materials the difference in cash, every quarter. On top of that, the government agreed to buy 100% of the output from MP’s new production facility for ten years once it’s built, at that same guaranteed floor.
Why go this far? Because a price floor is the one tool that reliably beats China’s usual move in this market: dumping. For years, Chinese rare earth producers have sold below their own mining costs, deliberately, to push Western competitors out of business and lock in market share once they’re gone. A company can survive short-term losses. What it usually can’t survive is years of losses with no end date, which is exactly what a dumping campaign is built to cause. A guaranteed floor price removes that risk entirely — MP Materials can keep producing profitably no matter how low China prices its exports, because the U.S. government is contractually on the hook for the gap.
The numbers already show it working. MP Materials went from an adjusted EBITDA loss of about $12.5 million in 2025 to a positive $28.5 million in the second quarter of 2026 — and a meaningful chunk of that swing came directly from price-floor payments, not from selling more magnets at market prices. At that same roundtable, Trump told the assembled executives that the $400 million the Pentagon put into MP Materials as an equity stake — the government is now the company’s largest shareholder — had already turned into roughly $1.2 billion on paper.
There’s a real gap in the story, though: dysprosium. Most of the “light” rare earths this deal covers can be mined and refined in the U.S. Dysprosium is a “heavy” rare earth — needed for magnets that have to hold their strength at high heat — and it’s still almost entirely sourced from China. China has leaned into that leverage: since April 2025, it has required export licenses for seven categories of heavy rare earths and related magnets, and by December 2025 it was refusing licenses to any company with U.S. military ties. In June 2026, China went further, blacklisting MP Materials and USA Rare Earth outright and threatening secondary sanctions — meaning any company anywhere in the world that sells Chinese-sourced material to a blacklisted firm risks getting blacklisted too.
That gap is why the Pentagon isn’t putting all its money in one basket. On the same day as the mining roundtable, the Department of Defense committed $150 million to Niron Magnetics, a Minnesota company building magnets out of iron and nitrogen — common, non-strategic elements — instead of rare earths at all. The chemistry has been theoretically known since the 1950s but was never stable enough to manufacture at scale, until Singapore-born researcher Jian-Ping Wang’s lab at the University of Minnesota cracked the production process (TIME named it one of 2023’s best inventions). Iron-nitrogen magnets currently only hold their strength below about 200°C, which rules out high-heat uses like fighter jet components or high-performance motors for now — headphones and speakers, yes; F-35s, not yet.
Put together, the price floor for MP Materials and the bet on Niron aren’t really two separate stories. They’re the same strategy split two ways: guarantee the economics of the rare earth supply chain that already exists, while quietly funding a chemistry that could make the whole China dependency question obsolete if it scales.
My take: The strongest magnet here is the government’s checkbook.
Not advice. Just how I see it.