America's only rare earth producer gets a boost from Apple and Pentagon
agreements
[July 16, 2025] By
JOSH FUNK
MP Materials, which runs the only American rare earths mine, announced a
new $500 million agreement with tech giant Apple on Tuesday to produce
more of the powerful magnets used in iPhones as well as other high-tech
products like electric vehicles.
This news comes on the heels of last week’s announcement that the U.S.
Defense Department agreed to invest $400 million in shares of the Las
Vegas-based company, establish a floor for the price of key elements and
ensure that all of the magnets made at a new plant in the first 10 years
are purchased.
That unusual direct investment in the company makes the government the
largest shareholder in MP Materials.
“This is the kind of long-term commitment needed to reshape global rare
earth supply chains,” Neha Mukherjee, a rare earths analyst with
Benchmark Mineral Intelligence, said in a research note on the Pentagon
deal.
Rare earths are a key concern in ongoing U.S. trade talks. China
dominates the market and imposed new limits on exports after President
Donald Trump announced his widespread tariffs. When shipments dried up,
the two sides sat down in London.
Despite their name, the 17 rare earth elements aren’t actually rare, but
it’s hard to find them in a high enough concentration to make a mine
worth the investment. They are important ingredients in everything from
smartphones and submarines to wind turbines and fighter jets.
The agreement with Apple will allow MP Materials to further expand its
new factory in Texas to use recycled materials to produce magnets that
make iPhones vibrate. The company expects to start producing magnets for
GM's electric vehicles later this year, and this agreement will let it
start producing magnets for Apple in 2027.
The Apple deal represents a sliver of the company's pledge to invest
$500 billion domestically during the Trump administration. And although
the deal will provide a significant boost for MP Materials, the
agreement with the Defense Department is likely to be even more
meaningful.
Mukherjee, the analyst, says the Pentagon's 10-year promise to guarantee
a minimum price for the key elements of neodymium and praseodymium will
guarantee stable revenue for MP Minerals and protect it from potential
price cuts by Chinese producers that are subsidized by their government.
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This 2024 photo provided by MP Materials shows an aerial view of the
company's mine in Mountain Pass, Calif. (MP Materials via AP, File)
 The Apple deal to produce magnets
from recycled materials will also help, she said, but it won’t
provide enough magnets to satisfy demand, meaning more sources of
these elements are still needed.
Steve Christensen, executive director of the Responsible Battery
Coalition, an association representing battery makers, automakers
and battery sellers, said he's optimistic that these new investments
in MP Materials might be part of a larger trend of increasing
domestic production and processing of these key elements.
“Expanding extraction is great, and we need more of it and
investments along the value chain," Christensen said. “The metals
produced from MP will lessen our dependence on China.”
That's a priority for Trump, and his administration is both helping
MP Materials and trying to encourage the development of new mines
that would take years to come to fruition. China has agreed to issue
some permits for rare earth exports but not for military uses, and
much uncertainty remains about their supply.
The fear is that the trade war between the world’s two biggest
economies could lead to a critical shortage that could disrupt
production of a variety of products. MP Materials can't satisfy all
of the U.S. demand from its Mountain Pass mine in California’s
Mojave Desert.
The deals by MP Materials come as Beijing and Washington have agreed
to walk back on their non-tariff measures: China is to grant export
permits for rare earth magnets to the U.S., and the U.S. is easing
export controls on chip design software and jet engines. The truce
is intended to ease tensions and prevent any catastrophic fall-off
in bilateral relations, but is unlikely to address fundamental
differences as both governments take steps to reduce dependency on
each other.
___
Associated Press writers David Klepper and Didi Tang in Washington
and Michael Liedtke in San Francisco contributed.
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