Apple inks $500m deal with MP Materials for rare earth magnets
MP shares jumped 19% on Tuesday morning to an all-time high, while Apple's stock gained just under 1%.
The multi-year supply deal, announced on Tuesday, is part of a broader push by Apple to bring iPhone production to the United States amid a push from the Trump administration to produce fewer electronics in China.
MP last week agreed to a multibillion-dollar deal with the U.S. Department of Defense that will see the Pentagon become MP's largest shareholder and financial backstop.
Rare earths are a group of 17 metals used to make magnets that turn power into motion, including the devices that make cellphones vibrate. They are also used to make weapons, electric vehicles, and many other electronics.
China halted rare earths exports in March following a trade spat with U.S. President Donald Trump that showed some signs of easing late last month, even as broader tensions underscored demand for non-Chinese supply.
As part of the agreement, Apple will pre-pay Las Vegas-based MP Materials $200 million for a supply of magnets slated to begin in 2027. The magnets will be produced at MP's Fort Worth, Texas, facility using magnets recycled at MP's Mountain Pass, California, mining complex, the companies said.
"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.
Bob O'Donnell, president at market research firm TECHnalysis Research, said Tuesday's move "makes complete sense" given that Apple requires significant amounts of rare earth magnets for its devices.
"Plus, by focusing on a U.S.-based supplier, it does help position Apple more positively in Washington," he said.
Apple, which said the deal is part of its $500-billion four-year investment commitment to the U.S., has faced threats from Trump over iPhones not made in the U.S. But many analysts have said making the iPhone in the U.S. is not possible, given labor costs and the existing smartphone supply chain.
MP already produces mined and processed rare earths and has said it expects to start commercial magnet production in its Texas facility by the end of this year.
Last week's deal with the U.S. government includes a price floor for rare earths designed to spur investment in domestic mines and processing plants, which has been lagging partly due to low prices set in China.
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His personal engagement with European leaders would have signaled Japan's commitment to deepening these strategic partnerships -- a gesture increasingly valuable as both Japan and its European partners navigate the uncertainties of managing their respective alliances in the coming years. (Sayuri Romei is a Washington-based senior fellow in the German Marshall Fund's Indo-Pacific program. Her research focuses on U.S.-Japan relations and security issues in the Indo-Pacific region.)
