MP Materials Corp. (NYSE: MP) saw its stock soar 5.11% in pre-market trading on Monday, following news of a strategic $150 million loan from the U.S. government's Office of Strategic Capital (OSC). The loan is aimed at bolstering the company's heavy rare earth elements (REEs) separation capabilities at its Mountain Pass, California facility.

The funding is part of a broader July 2025 agreement between the Department of Defense and MP Materials, the sole owner and operator of a rare earth mine in the United States. This move is seen as crucial for strengthening the U.S. industrial base and securing critical minerals supply chains, which are vital for various high-tech and defense applications.

Deputy Secretary of Defense Emil Michael emphasized the loan's significance, stating it would help revitalize the industrial foundation and rebuild military capabilities. The funds originate from the "Great and Beautiful Act," signed by President Trump on July 4, 2025, which allocated $500 million in credit subsidy funds to the OSC, potentially leveraging up to $100 billion in loans for critical minerals production and related industrial projects.

Investors are reacting positively to this development, seeing it as a strong vote of confidence in MP Materials' strategic importance and growth potential. The company's enhanced capacity for heavy REE separation could position it as a key player in reducing U.S. dependence on foreign sources for these critical materials.