MP Materials Secures Landmark Deals with Apple and Pentagon, Bolstering US Rare Earth Supply Chain

MP Materials, the sole operator of America’s rare earth mine, has announced two significant agreements poised to reshape global supply chains. A new $500 million deal with tech titan Apple will boost the production of powerful magnets essential for iPhones and electric vehicles. This follows last week’s revelation that the U.S. Defense Department committed a $400 million investment in the Las Vegas-based company, establishing a price floor for key elements and guaranteeing the purchase of all magnets produced at a new plant for its first decade.

This unusual direct government investment makes the Pentagon the largest shareholder in MP Materials, a move hailed by analysts as a crucial long-term commitment to securing rare earth supply chains. China currently dominates the rare earth market, and recent export limits imposed during trade tensions have underscored the urgent need for diversified sources.

Despite their name, the 17 rare earth elements are not scarce but are challenging to extract in commercially viable concentrations. They are vital components in a vast array of modern technologies, from smartphones and electric vehicles to defense systems like fighter jets and submarines.

The Apple agreement will facilitate the expansion of MP Materials’ new Texas factory, enabling the production of magnets from recycled materials, initially for iPhones by 2027, following earlier plans to supply GM’s electric vehicles later this year. While the Apple deal provides a significant boost, the Defense Department’s 10-year commitment to guarantee minimum prices for neodymium and praseodymium is expected to provide even greater stability, protecting MP Materials from potential price cuts by subsidized Chinese producers.

Industry experts are optimistic that these investments signal a broader trend towards increasing domestic production and processing of these critical elements, reducing U.S. dependence on foreign sources. While MP Materials’ Mountain Pass mine in California cannot meet all U.S. demand, these strategic partnerships are a vital step in fortifying America’s industrial and defense capabilities amidst ongoing global trade complexities.

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