Apple signs deal with US mining firm for rare earth magnets

Apple has signed a $500 million deal with MP Materials, the sole rare earth mining firm in the United States, to secure a crucial supply of rare earth magnets.

This strategic move aims to mitigate supply chain risks for the tech giant, following China’s earlier decision this year to curb exports of these vital materials in response to US tariffs.

Announced on Tuesday, the agreement guarantees Apple a steady flow of rare earth magnets independent of China, which currently dominates global production.

For Apple, the substantial investment pales in comparison to the long-term risk of losing access to these critical components essential for manufacturing electronics like iPhones, which use magnets to enable features such as vibrations. Rare earths are also vital for electric vehicles, weapons, and various other advanced technologies.

“We’re in an era where executives are willing to pay a significant premium for a reliable supply chain. They don’t want stoppage,” commented Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies.

The deal comes on the heels of MP Materials securing a multibillion-dollar agreement last week with the US Department of Defense, making the Pentagon its largest shareholder. Both agreements underscore a concerted effort by US entities to reduce reliance on China for these strategically important materials.

As part of the Apple deal, the tech company will prepay MP Materials $200 million for a supply of magnets expected to begin in 2027. Notably, the agreement specifies that these magnets will be produced from recycled material at MP Materials’ Fort Worth, Texas facility, utilizing magnets recycled at their Mountain Pass, California mining complex. This aligns with Apple’s long-standing sustainability goals.

“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,” said Apple CEO Tim Cook in a statement.

The move also serves to position Apple favourably in Washington, as pointed out by Bob O’Donnell, president at market research firm TECHnalysis Research. The deal is part of Apple’s broader $500 billion four-year investment commitment to the US, an initiative that has gained traction amid calls for increased domestic manufacturing.