(Reuters) - U.S. rare earths miner MP Materials said on Wednesday it has signed a memorandum of understanding with Saudi Arabia’s flagship mining company Maaden to jointly develop a rare earth supply chain in the Middle Eastern country.

WHY IT’S IMPORTANT

The agreement was signed on the sidelines of the U.S.-Saudi Investment Forum, where President Donald Trump secured a $600 billion investment from the kingdom which covered the energy, defense and mining sectors.

Saudi Arabia has been pushing to become a global critical minerals hub at a time when minerals processing is fast becoming a necessity for tech-focused economies looking to produce their own building blocks for AI, electric vehicles and other sectors.

CONTEXT

Last month, Reuters reported Maaden was weighing a rare-earths partnership with at least one of four foreign firms, including MP Materials, China’s Shenghe Resources, Australia’s Lynas (F: LYI ) Rare Earths or Canada’s Neo Performance Materials.

The partnership between MP Materials and Maaden would include mining, separation, refining and magnet production of rare earth minerals.

KEY QUOTES

"Today’s announcement is an important first step towards rebalancing the global supply chain ... especially in robotics and physical AI — while deepening the strategic alliance between the United States and Saudi Arabia," said MP Materials CEO James Litinsky.

Maaden’s CEO Bob Wilt said the partnership was an integral step towards establishing mining as "the third pillar" of the Saudi economy.

MARKET REACTION

Shares of MP Materials rose nearly 5% before the bell.

(This story has been refiled to remove a stray apostrophe from the company name in the headline and text)