Pentagon-backed MP Materials (NYSE: MP), the United States’ only producer of rare earth elements, has struck a $500-million deal with tech giant Apple (Nasdaq: AAPL) to secure domestic supplies for smartphones and electric vehicles. Shares jumped.
The investment includes Apple purchasing U.S.-made rare earth magnets from MP Materials’ plant in Fort Worth, Texas. The two companies are to co-develop a factory with neodymium magnet production lines specifically tailored for Apple products.
The deal follows a $400-million agreement last week that sees the Pentagon acquire a 15% stake in MP and buy critical minerals for defence projects. The combination has almost doubled the value of MP stock to all-time-high territory of $60.95 apiece by mid-Tuesday in New York. Apple’s stock was up a modest 1.2%, trading at $211.09 each.
“Rare earth materials are essential for making advanced technology,” Apple CEO Tim Cook said in a statement. “This partnership will help strengthen the supply of these vital materials here in the United States.”
$500B strategy
The investment is part of Apple’s broader strategy to increase domestic manufacturing, with plans to spend more than $500 billion in the U.S. over the next four years. The tech giant said the collaboration will create dozens of new manufacturing and R&D jobs. It also includes a rare earth recycling initiative at MP Materials’ Mountain Pass mine in California that is to convert recycled feedstock into materials for Apple products.
The companies are to co-develop new magnet materials and innovative processing technologies to improve performance.
“This collaboration deepens our vertical integration, strengthens supply chain resilience, and reinforces America’s industrial capacity at a pivotal moment,” MP Materials CEO James Litinsky said in a separate statement Tuesday.
China dependence
MP’s recent deals aim to reduce the country’s dependence on foreign sources, particularly China.
Earlier this year, after the U.S. imposed 145% tariffs on Chinese imports, Beijing retaliated by halting exports of rare earths magnets, critical for electronics, wind turbines, EVs and fighter jets. The move disrupted global supply chains: Ford and Suzuki halted some production, Elon Musk cited shortages affecting his robotics operations, and governments scrambled to lock down non-Chinese sources.
Despite global demand, producers outside China, including MP Materials and Australia’s Lynas Rare Earths (ASX: LYC), have struggled with profitability due to weak prices and oversupply.
MP Materials operates the world’s second-largest rare earth mine at Mountain Pass. Mining began in 2017; refining followed in 2023. The company expects to supply magnets to General Motors by year-end and begin shipping from its Texas plant in 2027 to support hundreds of millions of Apple devices.
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