Apple Invests $500M in MP Materials for Domestic Rare Earth Supply

Apple is set to invest 500 million dollars in MP Materials, the sole rare earth mining operator in the United States. This significant investment underscores Apple's commitment to strengthening its domestic supply chain for critical minerals. MP Materials operates the only rare earth mine in the country, located in Mountain Pass, California. The company plays a pivotal role in the rare earth supply chain, particularly as the United States seeks to reduce its dependence on external sources for these essential materials.

This investment comes on the heels of a recent agreement between MP Materials and the U.S. government, which aims to increase the production of rare earth magnets. These magnets are crucial for the manufacturing of weapons, electric vehicles, and various electronic products. The agreement includes plans for Apple to purchase rare earth magnets produced at MP Materials' Texas facility. MP Materials is already producing rare earths and plans to commence commercial production of rare earth magnets at its Texas plant by the end of this year.

In addition to the Texas facility, the two companies are set to build another magnet production plant in Fort Worth, Texas, and a recycling plant in Pasadena, California. The agreement with the U.S. Department of Defense includes a price floor for rare earths, intended to stimulate investment in domestic mining and processing facilities. This move is part of a broader effort to reduce reliance on foreign suppliers, particularly China, which has historically dominated the rare earth market.

The investment by Apple is expected to enhance MP Materials' financial capabilities, enabling the company to further expand its operations. This investment aligns with the broader U.S. policy aimed at establishing a more independent critical mineral supply system. The recent surge in MP Materials' stock price reflects the market's optimistic outlook on the development prospects of the U.S. rare earth industry, supported by the government's increasing backing for the sector.