Government support
The $110/kg NdPr price floor: how it works and who gets it
The NdPr price floor is a contract under which the Department of War pays MP Materials the difference when its realized price for neodymium-praseodymium falls below $110 per kilogram. It runs from Oct 1, 2025 to Dec 31, 2035. Once MP's 10X magnet plant reaches full production, MP pays the government 30% of any amount by which the price exceeds $110.
MP Materials recognized $51.0M of income under the agreement in 2025 and $17.6M in Q2 2026. A softer floor of about $110 per kg is in the Lynas purchase agreement, and USA Rare Earth says its Serra Verde offtake has price floors, including for dysprosium and terbium (company-reported).
Verified through Oct 1, 2026
At a glance
- Parties
- The Department of War (then Defense) and MP Materials; effective Jul 9, 2025
- Floor
- $110 per kilogram of NdPr
- Government pays
- The shortfall when MP's realized price for the quarter is below $110, within 30 days of MP's report
- MP pays
- 30% of the amount above $110, only after the 10X plant reaches full production
- Counts
- NdPr that MP produces and stockpiles, sells to an affiliate for magnets or sells to a third party that is not a restricted buyer
- Floor per kg of NdPr
- $110Specified payment amount in the contract
- Government share above the floor
- 30%After 10X reaches full production
- Income recognized in 2025
- $51.0MRecorded as a receivable at year end
- Term
- 10 yrsOct 1, 2025 to Dec 31, 2035
What is the NdPr price floor?
The NdPr price floor is the Price Protection Agreement between MP Materials and the Department of Defense, now the Department of War, effective Jul 9, 2025. It sets a payment amount of $110 per kilogram of NdPr and settles every quarter against MP's realized price, so MP is protected against prices below $110 on the NdPr that counts under the contract.
NdPr is the neodymium and praseodymium mix at the core of neodymium-iron-boron magnets. The agreement applies to NdPr products that MP or its affiliates produce at Mountain Pass, including concentrate, oxide and metal.
The floor is one of five agreements in the Pentagon deal. The others are the preferred stock and warrant, the 10X magnet offtake and a $150M loan; see the full explainer.
How does the price floor pay out each quarter?
Each quarter MP reports the kilograms of NdPr it stockpiled, sold to an affiliate or sold to third parties, and the volume-weighted realized price. If that price is under $110, the government pays the shortfall on every kilogram within 30 days of the report. Once 10X is at full production, MP pays 30% of any excess.
Government pays $17.5M for 500 t of NdPr at $75/kg. Round numbers for illustration, not a forecast.
MP keeps an effective $110/kg.
| Realized price | Before 10X full production | MP keeps per kg | After 10X full production | MP keeps per kg |
|---|---|---|---|---|
| $60/kg | Government pays $50M | $110 | Government pays $50M | $110 |
| $80/kg | Government pays $30M | $110 | Government pays $30M | $110 |
| $100/kg | Government pays $10M | $110 | Government pays $10M | $110 |
| $110/kg | No payment | $110 | No payment | $110 |
| $130/kg | No payment | $130 | MP pays $6M | $124 |
| $160/kg | No payment | $160 | MP pays $15M | $145 |
The agreement settles on MP Materials' own realized price per NdPr kilogram equivalent across the quarter's stockpiled, affiliate and third-party volumes, not on a published index. Stockpiled and affiliate volumes are valued at the Asian Metal market price for NdPr oxide. The 30% share starts only after the 10X plant reaches full production.
Which NdPr counts toward the price floor and what is excluded?
Only NdPr that MP produces and designates as stockpiled, sold to an affiliate for magnet making, or sold to a third party counts. Unsold inventory does not trigger a payment. NdPr made from third-party feedstock bought above $110 per kg, and sales to restricted buyers such as China-linked entities, do not count.
| NdPr category | How it is valued | Counts? |
|---|---|---|
| Stockpile | Treated as sold at the prevailing market price: the Asian Metal price for NdPr oxide (25% praseodymium oxide, 75% neodymium oxide, ex-works China), or an ex-China index if the parties adopt one. | Counts |
| Affiliate sale | NdPr sold to MP's own magnet business for the sole purpose of making magnets, valued at the market price unless an arm's-length contract sets a price. | Counts |
| Third-party sale | NdPr sold to a buyer that is not an affiliate or a restricted buyer, valued at the greater of a redacted amount and the actual price paid. | Counts |
| Inventory | NdPr placed in inventory is not deemed sold. A payment arises only when it is later classified under one of the categories above. | Not yet |
| Costly third-party feedstock | NdPr made from feedstock bought at more than $110 per kg of NdPr equivalent is not a sold product under the agreement. | Excluded |
| Restricted buyers | Buyers owned or controlled by China, on US denied-party or sanctions lists, or acting for such parties. MP may not keep selling to a buyer that resells in original form to one. | Excluded |
MP must first allocate NdPr to its own magnet facilities, Independence and 10X, and must use commercially reasonable efforts to sell at the highest prices. The Department can protest a quarterly report within 90 days; disputes go to an independent expert.
How much has the price floor paid MP Materials?
MP Materials recognized $51.0M of price protection income in 2025 and $17.6M in Q2 2026. The 2025 amount was recorded as a receivable at year end and relates mainly to NdPr in stockpiled concentrate and to third-party sales, so income recognized is not the same as cash received.
| Period | Income recognized | Source |
|---|---|---|
| 2025 | $51.0M | MP Materials 10-K for 2025: accrued in "Other receivables"; relates primarily to NdPr in stockpiled concentrate and third-party sales. |
| Q2 2026 | $17.6M | MP Materials Q2 2026 results, as recorded on the MP Materials profile. |
This is an accounting figure from the company's reports. The directory does not track cash payments by quarter.
Who gets the price floor and who pays for it?
MP Materials gets it, and the Department of War pays. MP's 10-K says the department relies on Title III of the Defense Production Act and other authorities for the deal, calls that use unconventional and notes the department would need additional funds in future to meet its obligations, so the arrangements could be changed or challenged.
It is a contract with one company, not a program open to applications. The government support tracker shows it under wider programs and does not add it to company totals; the $400M stock and the $150M loan from the same deal are counted as rows.
Which other US rare earth companies have price floors?
Two other deals are reported with floors. Lynas USA's Mar 2026 binding letter of intent with the Department of War carries a soft floor of about $110 per kg for NdPr oxide, and USA Rare Earth says its 15-year Serra Verde offtake has guaranteed price floors, including for dysprosium and terbium (company-reported). No other US floor is recorded in the sources checked.
- NdPr Lynas USA About $96M of oxide purchases over four years under a binding letter of intent, with a soft floor of about $110/kg for NdPr oxide. The Seadrift, Texas plant itself remains uncertain.
- Heavy and light USA Rare Earth and Serra Verde A 15-year offtake of Serra Verde's Phase 1 output by a US government-backed vehicle with floor prices and a take-or-pay arrangement (company-reported). The mine is in Brazil.
- Program view Government support tracker The price floor, the other wider programs and every federal row with its status.
Which US projects, companies and states does this touch?
The pages below carry the figures, the sources and the dates for each project or company named here.
- MP MaterialsThe only company with the $110 per kg agreement
- Mountain PassThe mine and separation plant that make the NdPr
- The Pentagon deal explainedThe stock, warrant, offtake and loan beside the floor
- Lynas USAA binding letter of intent with a soft floor of about $110 per kg
- USA Rare EarthThe Serra Verde offtake with floor prices
- China export controlsThe market conditions the floor was written against
- Government support trackerHow the floor compares with other support
Questions about the NdPr price floor
What is the NdPr price floor?
It is a $110 per kg floor in MP Materials' Price Protection Agreement with the Department of War. If MP's realized NdPr price for a quarter is below $110, the department pays MP the difference on each kilogram that counts under the agreement.
How is the quarterly payment calculated?
The department pays the amount by which $110 exceeds MP's volume-weighted realized price for the quarter, multiplied by the NdPr kilograms stockpiled, sold to affiliates or sold to third parties. The payment is due within 30 days of MP's report.
Does the government get anything when prices rise?
Yes, but only after the 10X plant reaches full production. Then MP pays the department 30% of the amount by which the realized price exceeds $110, per kilogram, each quarter.
Is the benchmark a published price index?
No. The benchmark is MP's own volume-weighted realized price. Stockpiled and affiliate volumes are valued at the Asian Metal NdPr oxide price, which is an ex-works China price, unless the parties adopt an ex-China index.
How long does the price floor last?
The term starts on the first day of the first full quarter after closing, Oct 1, 2025, and ends at the end of the quarter containing the tenth anniversary, which is Dec 31, 2035.
How much has it paid?
MP recognized $51.0M of income in 2025 and $17.6M in Q2 2026. The 2025 amount was a receivable at year end, so income recognized is not cash received.
Does Lynas have a price floor?
Lynas USA's Mar 2026 binding letter of intent with the Department of War, worth about $96M over four years, carries a soft floor of about $110 per kg for NdPr oxide. The Seadrift, Texas plant remains uncertain.
Sources and verification
Each profile lists its sources, a confidence grade and a verification date. Order of authority: official records (SEC filings, agency documents), company documents and technical reports, research papers, then independent press. Syndicated copies and reference works are labeled and are never the only source for a number. Company-reported figures are labeled as such, and non-binding deals are labeled "letter of intent" or "conditional".
- MP Materials: Price Protection Agreement with the Department of Defense, Exhibit 10.6 to the Form 8-K (Jul 2025, SEC) Official record
- MP Materials: Form 8-K on the transactions with the Department of Defense (Jul 2025, SEC) Official record
- MP Materials: 10-K for 2025 (SEC) Official record
- MP Materials: second quarter 2026 results Company document
- Mining.com: MP Materials lands multi-billion Pentagon deal (Jul 2025) Independent press
- Engineering News: Lynas one step closer to supplying rare earths to the US Department of War (Mar 2026) Independent press
- USA Rare Earth: completion of the $1.55 billion capitalization of the Serra Verde offtake vehicle (SEC, Aug 24, 2026) Official record
Tags show what kind of source each link is. How sources are ranked
Policy and funding
Which other policy explainers are there?
Nine explainers cover the foreign controls, defense rules, permitting steps and funding programs behind the projects in this directory.
- Policy China export controls Seven elements need a Chinese license since Apr 2025; an October 2025 expansion is suspended.
- Policy DFARS 2027 rule From Jan 1, 2027 defense contracts bar magnets made from Chinese-mined or Chinese-processed material.
- Policy FAST-41 permitting A federal timetable and dashboard for permits; Bear Lodge is covered and Sheep Creek is listed.
- Policy NRC and Agreement State licensing Why thorium and uranium in rare earth ore bring radioactive materials rules, and who enforces them in each state.
- Government support MP Materials Pentagon deal A $400M stake, a $110/kg NdPr floor, a 10-year 10X offtake and a $150M loan, from the agreements themselves.
- Government support Project Vault An EXIM-financed critical minerals reserve: who pays, who buys and what is known about rare earths.
- Government support DOE funding awards Every Department of Energy rare earth selection and award, and what "selected for negotiation" means.
- Government support Government equity stakes Where the US government holds or has agreed to take shares or warrants in critical minerals companies.
- Hub All rare earth policy The calendar of policy dates and how the pieces fit together.