MP Materials: The Rare Earth Play to Watch in America's Supply Chain Revolution

The $500 million partnership between Apple and MP Materials, announced in July 2025, marks a pivotal moment in the U.S. government's push to secure its rare earth mineral supply chain. Combined with a $400 million investment from the Department of Defense (DoD), the deal underscores a strategic shift to reduce reliance on China, which dominates 60% of global rare earth production and 90% of processing. For investors, MP Materials (MP) is now a critical play in a sector primed for growth amid geopolitical tensions and regulatory mandates.

The Apple-DoD Deal: A Strategic Double Play

Apple's $500 million commitment to MP Materials includes funding for a new magnet manufacturing plant in Fort Worth, Texas, and a recycling facility in California. The Texas plant aims to produce 10,000 metric tons of rare earth magnets annually by 2028—critical for Apple's devices, electric vehicles, and defense systems. Meanwhile, the DoD's $400 million investment, finalized on July 11, 2025, secures a 15% stake in MP, making the Pentagon its largest shareholder. This dual public-private partnership ensures MP can scale production while shielding the U.S. from supply chain disruptions.

The deal's financial terms are equally compelling. MP secured a decade-long price floor of $110 per kilogram for neodymium-praseodymium (NdPr), a key magnet component, and a guaranteed offtake agreement for 100% of Texas plant output. These provisions stabilize cash flows, reducing exposure to volatile commodity markets.

MP's shares surged 60% premarket on July 11, 2025, reflecting investor confidence in its role as a national strategic asset.

Why Rare Earths Matter: Geopolitics and Supply Chain Security

Rare earth elements (REEs) are the “digital age minerals,” essential for technologies like EVs, wind turbines, and military hardware. China's dominance has long been a vulnerability: it controls 70% of global REE mining and imposes export restrictions, including tariffs up to 145%. The U.S. rare earth initiative aims to replicate China's vertical integration—mining, processing, and manufacturing—by 2030.

MP's Mountain Pass mine, the only active rare earth facility in the U.S., is now central to this strategy. The Fort Worth magnet plant and recycling infrastructure further solidify domestic control over the supply chain. With Apple's commitment, MP is positioned to capture a larger share of the $10 billion rare earth magnet market, traditionally dominated by Chinese firms.

Risks and Opportunities

The path to self-sufficiency is not without challenges. MP's projects depend on sustained government funding and regulatory support, as well as the success of its recycling operations. Moreover, global oversupply and price fluctuations—China's stockpiles could depress prices—pose risks. However, the DoD's price guarantees and offtake agreements mitigate these risks, creating a floor for MP's profitability.

Investors should also monitor broader geopolitical dynamics. U.S.-China trade negotiations and sanctions could accelerate or stall progress. For now, the bipartisan consensus on supply chain resilience bodes well for MP's long-term prospects.

Investment Thesis: A Rare Earth Leader with Tailwinds

MP Materials is uniquely positioned to benefit from three converging trends:
1. National Security Demand: The DoD's $400 million stake and magnet purchases ensure steady demand for defense applications.
2. Corporate Partnerships: Apple's investment signals a broader trend of tech giants securing domestic suppliers to avoid supply chain bottlenecks.
3. Regulatory Tailwinds: The Biden administration's Inflation Reduction Act and the DoD's Defense Production Act provide funding and incentives for critical mineral projects.

While short-term volatility is inevitable, MP's 10-year agreements and strategic importance make it a buy for investors with a 3–5 year horizon. Competitors like Australia's Lynas Rare Earths (LYD) or Chinese firms may face trade barriers, giving MP an edge in the U.S. market.

China's 70% production share highlights the U.S. need for domestic alternatives—a gap MP aims to fill.

Conclusion: A Strategic Bet on Supply Chain Autonomy

MP Materials is no longer just a rare earth miner—it's a linchpin of U.S. industrial strategy. With Apple and the DoD as anchor partners, MP is building the infrastructure to rival China's dominance. For investors, this is a generational opportunity to capitalize on a sector where geopolitics and regulation are fueling demand. While risks exist, the long-term trajectory is clear: MP is the rare earth play to own as America bets on supply chain independence.

Investment Recommendation: Consider adding MP to portfolios focused on national security assets or critical mineral plays. Monitor stock price reactions to DoD funding updates and Apple's magnet production timelines.

This analysis assumes the accuracy of the July 2025 deal details as described in the provided research. Always conduct additional due diligence before making investment decisions.