Apple signed a $500 million deal with MP Materials to secure rare earth magnets, strengthening its U.S. supply chain after China curbed exports this year.
The deal follows MP’s multibillion-dollar agreement with the U.S. Department of Defence, making the Pentagon its largest shareholder. MP, based in Las Vegas, runs the only rare earth mine in the U.S.
MP’s stock nearly doubled after the government deal. Previously, the company struggled with falling profits and even considered merging with an Australian rival. CEO Jim Litinsky called that period a “very frustrating” pricing environment.
This new agreement ensures Apple gets magnets free from China, the world’s top producer. Consequently, analysts say supporting U.S. production costs less than losing access. Therefore, Apple invested heavily to secure its supply.
Moreover, experts view this as part of a broader shift in corporate priorities. In fact, “Executives now pay a premium for reliable supply chains,” said Gracelin Baskaran, director at the Centre for Strategic and International Studies. As a result, stability outweighs cost-cutting.
Previously, China restricted rare earth exports in April after U.S. tariffs. However, despite a June trade deal, risks remain. For this reason, Apple seeks non-Chinese sources to avoid future disruptions.
Apple will prepay $200 million under the deal, with magnet deliveries starting in 2027. MP will make magnets from recycled material at its Texas plant, using supplies from its California site. This aligns with Apple’s goal to end mining dependency.
“Rare earth materials are vital for advanced tech, and this partnership strengthens U.S. supply,” said Tim Cook, Apple’s CEO. Bob O’Donnell of TECHnalysis Research added, “This move makes sense since Apple needs huge amounts of magnets. Plus, working with a U.S. supplier helps Apple in Washington.”
Finally, Apple confirmed the deal is part of its $500 billion U.S. investment plan over four years, addressing criticism about overseas iPhone production.
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