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,

MP Materials Corp.’s stock skyrocketed in early trading Thursday, after the rare-earth producer said it inked a public-private partnership with the U.S. Defense Department to boost domestic magnet production and to reduce dependence on foreign sources.