MP Materials unveiled a multibillion-dollar deal with the U.S. government on Thursday to boost output of rare earths and help loosen a stranglehold by top producer China on the minerals vital for military applications,

The Defense Department on Thursday became the largest shareholder in MP Materials, which owns the only rare earth mine in the U.S., amid a surge in demand for rare earths mined in the U.S. as China has curbed its rare earth exports amid a trade war with the U.S.

Shares of the mining company soared 50% in early trading at $45.10, while the S&P 500 and Dow Jones Industrial Average were flat and down 0.2%, respectively. The agreements includ