Apple’s new partnership with MP Materials, the largest producer of rare earth materials, is a significant step for both companies. This partnership will provide a consistent stream of rare earth magnets, which are essential ingredients in Apple’s devices. This multi-year agreement is intended to strengthen domestic production of components vital to each of the above specialties. It fits nicely with the Trump administration’s stated goals of reducing American dependence on Chinese-made goods.
Rare earth elements are crucial for making powerful magnets, which allow electric motors to turn electricity into movement. These materials are enabling technologies across applications from electrical devices that vibrate in your pocket like cellphones to medical ultrasound applications. Along with more demand for new, advanced tech, Apple now understands that their access to these key materials requires trustworthy access to them.
After all, MP Materials just this month scored a multibillion-dollar deal with the U.S. Department of Defense. This deal will make the Pentagon the new owner’s biggest shareholder and financial backstop. This announcement is particularly notable as the focus on building domestic supply chains has never been more significant. After a trade war over tariffs in March, China stopped its rare earth exports, which raised fears about the availability and reliability of this supply.
Due to this partnership and the new defense deal, MP Materials’ stocks jumped 19% on Tuesday morning. They’d struck an all-time high! The firm currently mines and processes rare earths. By the end of this year, it expects to begin commercial scale magnet production at its facility in Texas.
Apple’s desire to buy abundant amounts of rare earth magnets is at the core of its production intentions. The tech behemoth’s recent moves to start manufacturing iPhones in the US comes as localization continues to gain steam, propelled by surging global trade tensions. Setting a price floor for rare earths is meant to spur investment in new U.S. mines and processing facilities. This action is a direct response to the increased investment slowdown owing to China’s low prices.
Bob O’Donnell, president at market research firm TECHnalysis Research, emphasized the logic behind Apple’s move:
“It makes complete sense.” – Bob O’Donnell
Apple CEO Tim Cook underscored the significance of this partnership, stating:
“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.” – Tim Cook