Apple is investing $500 million in a US maker of rare earth magnets, and the company's stock is soaring
The Cupertino-based iPhone maker said Tuesday it has reached a $500 million deal with MP Materials to buy US-made rare earth magnets.
"Rare earth materials are essential for making advanced technology, and this partnership will help strengthen the supply of these vital materials here in the United States," Apple CEO Tim Cook said in a statement.
Rare earths are used in the production of high-powered magnets that enable a wide range of electronic functions, ranging from electric motors and generators to wireless charging and haptic touch responses in mobile devices.
While new supplies of rare earths continue to be mined, Apple's initiative with MP Materials focuses on reclaiming and recycling neodymium magnets specifically for Apple devices from used consumer electronics and post-industrial scrap.
News of the deal sent MP Materials' stock price soaring more than 25% on Tuesday morning, topping a prior price high reached in April 2022.
The gains extend a run that started last week when MP Materials inked a multibillion-dollar deal with the US Department of Defense that guarantees a price floor for two of the most popular rare earth metals that is nearly twice as high as the Chinese market level, Reuters reported.
The move also sends a message to President Donald Trump, who has pressured Apple to make more of its products in the US.
"I said to Tim, I said, 'Tim, look, we treated you really good, we put up with all the plants that you build in China for years, now you got build us," Trump said in May.
Apple said in its release that this purchase commitment is part of a larger pledge to spend more than $500 billion in the US over the next four years.
The company also said that MP Materials will provide "extensive" training at its new factory in Texas to build a new specialized workforce for magnet manufacturing.
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