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Apple Strikes $500M Deal with MP Materials to Boost US Rare Earth Supply Chain

By  |  July 15, 2025

Apple has signed a $500 million contract with MP Materials to secure a long-term supply of rare earth magnets. The deal, reported by Reuters, represents a major shift in U.S. tech and industrial policy as the nation seeks to reclaim leadership in critical materials manufacturing.

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    Under the terms of the agreement, Apple will prepay $200 million to MP Materials, with full-scale magnet production expected to begin in 2027. The rare earth magnets—vital components in many consumer electronics, including the iPhone—will be manufactured at MP’s facility in Fort Worth, Texas. The raw materials will be sourced in part from recycled materials at MP’s Mountain Pass, California site.

    Per Reuters, MP Materials’ stock soared 19% on Tuesday morning to a record high following the announcement, while Apple’s shares saw a more modest increase of nearly 1%. The move is part of Apple’s broader effort to localize more of its manufacturing footprint, especially amid ongoing U.S.-China trade friction.

    MP Materials recently secured a multibillion-dollar agreement with the U.S. Department of Defense, making the Pentagon its largest investor and providing a financial safety net for the company. According to Reuters, this partnership is designed to strengthen domestic production of rare earths, a strategic category of 17 elements essential in the creation of electric vehicles, military hardware, and a wide range of consumer electronics.

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    The geopolitical backdrop adds urgency to such deals. China, which currently dominates the global rare earth supply chain, halted exports of the materials in March during a trade dispute with former President Donald Trump. Although some diplomatic progress has since been made, the incident intensified calls for alternative supply sources.

    Apple’s CEO Tim Cook, in a statement, emphasized the importance of the deal in securing critical resources domestically: “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.”

    According to Reuters, the supply agreement aligns with Apple’s $500 billion, four-year investment pledge in the U.S. economy. Industry analysts note that while Apple has faced pressure from policymakers to bring iPhone production stateside, the complexity of global supply chains and higher U.S. labor costs make full-scale domestic manufacturing unlikely in the near term.

    Nonetheless, Bob O’Donnell, president of TECHnalysis Research, noted the strategic merit of the move. “It makes complete sense,” he said. “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.”

    The rare earth sector in the U.S. has historically struggled with volatile prices and limited processing capacity. The Pentagon’s recent investment in MP Materials includes a pricing floor mechanism to encourage domestic development, countering price suppression from Chinese producers and addressing long-standing concerns over supply chain security.

    Source: Reuters