Apple to buy US$500 million rare earths from Pentagon-backed US producer MP

[SAN FRANCISCO] Apple has struck a US$500 million deal to buy rare-earth minerals from MP Materials, the US producer that just last week secured backing from the Pentagon.

The two companies will build a factory in Texas, with neodymium magnet manufacturing lines tailored for Apple products, the iPhone maker said on Tuesday (Jul 15) in a statement. Apple said the spending on rare-earth minerals is part of its earlier pledge to invest more than US$500 billion in the US over the next four years.

The world’s dependence on China for rare-earth permanent magnets that are essential for consumer tech, cars, wind turbines and fighter aircrafts, has become a flash point in the nation’s trade war with the US.

After the Trump administration imposed 145 per cent tariffs on China, boasting that it had the upper hand, Beijing turned the tables by essentially shutting down exports of the critical component. MP Materials operates the sole US rare-earth mine at Mountain Pass in California.

“Rare earth materials are essential for making advanced technology, and this partnership will help strengthen the supply of these vital materials here in the US,” Apple chief executive officer Tim Cook said in the statement.

The increased production will support dozens of new manufacturing and R&D jobs, Apple said. The two companies will also work together to establish a rare earth recycling line in Mountain Pass, California, and develop novel magnet materials and innovative processing technologies to enhance magnet performance, according to the statement. That facility will allow MP Materials to take in recycled rare earth feedstock and use it in Apple products.

“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.

Magnet shipments from the MP Materials facility in Fort Worth, Texas are expected to begin in 2027 and ramp up to support hundreds of millions of Apple devices, the Las Vegas-based firm said.

China curbs have reverberated across global supply chains: Ford Motor and Suzuki Motor Corp. idled some production. Elon Musk said shortages were hurting his robotics business. And governments rushed to secure the few suppliers outside of China.

Signs have emerged in recent weeks that the US and China are beginning to deliver on promises made in trade talks held in Geneva and London in the past two months. China agreed to resume shipments of rare earths – with exports surging in June – while the Trump administration has reversed some restrictions on technology exports to China, including some semiconductors from Nvidia and Advanced Micro Devices.

Still, in its biggest move yet to push back against China’s weaponisation of rare earths, the Pentagon took a US$400 million stake in MP last week to secure supplies of magnets critical for military and other applications. The deal came with US$1 billion in financing from JPMorgan Chase . and Goldman Sachs Group to fund a major new plant.

While the export halt boosted prices and sparked fears of shortages, over the longer run western producers like MP Materials and Australia’s Lynas rare earths have struggled to turn a profit due to weak prices and oversupply. BLOOMBERG