"This is a momentous occasion for the reshoring of the American supply chain, and we are grateful for GM's confidence, commitment and leadership," MP chairman and CEO James Litinsky said.

MP said it could fund the new facility with net cash on-hand and planned to ramp up production beginning in 2023.

It aimed to initially produce 1,000 tonnes of finished neodymium-iron-boron (NdFeB) magnets a year, with the potential to power 500,000 EV motors.

MP said independent research firm Adamas Intelligence expected global NdFeB demand to double by 2030, driven largely by increased production of EVs.

GM said the magnets would be used in models including its GMC Hummer EV, Cadillac LYRIQ and Chevrolet Silverado EV.

It was planning to invest US$35 billion in EV and AV product development by 2025.

MP said the Fort Worth facility would consume less than 10% of the 6,075 tonnes of NdPr oxide it expected to produce annually at its Mountain Pass mine in California.

It had reported record production and earnings for the September quarter due to cost discipline and strong global demand pushing up prices.

The high prices are prompting companies to eye expanding downstream, as the US looks to reduce its reliance on China which dominates the rare earths market. 

MP has been moving to restore a rare earth supply chain to the US, with its output currently further processed in China by circa 8% shareholder Shenghe Resources.

MP Materials shares (NYSE: MP) closed up 4.05% on Friday to US$47.26, a gain of 46.9% year-to-date, capitalising it at $8.4 billion.