By Britney Nguyen
The iPhone maker is committing $500 million to buying rare-earth magnets from the company’s flagship facility in Texas, which Apple is helping to build out
Shares of MP Materials Corp. were up nearly 25% and headed for a new high on Tuesday after the rare-earths producer struck a deal with a major, notable partner – the latest sign that U.S. tech companies are interested in strengthening domestic production of rare-earth materials.
Apple Inc. (AAPL) said in a statement on Tuesday that it has made a new commitment of $500 million to buy “American-made rare-earth magnets” from the Las Vegas-based materials company (MP). The magnets will come from MP Materials’ flagship facility in Fort Worth, Texas, which Apple is helping to build out, the iPhone maker said.
The two companies are also partnering on a rare-earths recycling line in the Mojave Desert town of Mountain Pass, Calif., where MP Materials has a mine and processing facilities.
If MP Materials’ stock holds its gains through the close, it would notch a fresh closing high – and its first record close since April 2022, when it finished the trading day at $58.26, according to Dow Jones Market Data. Shares were changing hands Tuesday at just above $60 each, at last check.
Apple’s stock, on the other hand, was up about 1% in midday trading Tuesday.
MP Materials and Apple will work together on developing “novel magnet materials and innovative processing technologies to enhance magnet performance,” Apple said. The Texas factory will include “a series of neodymium magnet manufacturing lines specifically designed for Apple products,” according to the tech company. All of the efforts are part of Apple’s $500 billion, four-year investment pledge in the U.S. that it announced earlier this year.
See more: Forget Stargate. Apple now has its own $500 billion investment plan.
“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 Chief Executive Tim Cook said in the statement.
The reprocessed material from the not-yet-completed Mountain Pass recycling facility, which will come from means such as used electronics and postindustrial scraps, will be used in Apple products, the company said. Apple added that it has worked with MP Materials for nearly five years on technology that can recycle rare-earth magnets into a material that meets its standards for its products.
Apple said it “pioneered the use of recycled rare-earth elements in consumer electronics” in its Taptic Engine, or the component that provides haptic feedback, for the iPhone 11 in 2019. The company added that “nearly all” of the magnets across its devices use “100% recycled rare-earth elements.”
“The collaboration with MP Materials will help secure domestic supply of this critical material, strengthen the U.S. rare-earth industry’s capabilities to capture more raw material, and advance environmental progress with innovative recycling methods,” Apple said.
Last week, MP Materials said it signed a public-private partnership with the U.S. Defense Department to support more domestic magnet production and to reduce reliance on foreign producers.
China has the world’s largest reserves of rare earths – a powerful asset during trade talks with the U.S. As a response to President Donald Trump’s proposed tariffs on the country in April, China put restrictions on exports of seven rare-earth elements that the U.S. is currently limited to. China later shared more details about a trade deal in June that it said would allow the U.S. to receive rare-earth exports.
See more: MP Materials won a big rare-earth contract with Uncle Sam, and the stock rockets
Apple has also been caught up in the Trump administration’s push for more domestic manufacturing. In May, the president threatened Apple with a 25% tariff if the company didn’t make its iPhones for the U.S. market stateside.
Apple doesn’t produce smartphones in the U.S., but has made some efforts to diversify its supply chain beyond China since pandemic-era lockdowns and in light of rising geopolitical tensions.
Some analysts were quick to point out after Trump’s tariff threat that most iPhone components are made abroad, and that shifting Apple’s supply chain to the U.S. would not only take years, but also lead to a more expensive end product.
See more: Apple’s stock falls as Trump makes a tariff threat on iPhones. Here’s why it’s misguided.
In an April note, Wedbush Securities analyst Dan Ives said that high tariffs proposed on China to encourage more stateside production would “negatively change the tech landscape for decades to come.”
In a following note in May, Ives said that building iPhones in the U.S. “would result in an iPhone price point that is a nonstarter for Cupertino and translate into iPhone prices of $3,500 if it was made in the U.S.”
-Britney Nguyen
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