According to Reuters, Apple has signed a $500 million, four-year agreement with MP Materials to secure a steady supply of rare earth magnets, a move aimed at reducing supply chain risks after China imposed export restrictions earlier this year. MP Materials, which runs the only rare earths mine in the U.S., recently entered a multibillion-dollar partnership with the Department of Defense, making the federal agency a major stakeholder. The deal ensures Apple access to rare earth magnets independent of China, the dominant global supplier. Given Apple’s heavy reliance on these components for products like the iPhone’s haptic engine, as well as audio equipment and microphones, the investment strengthens its long-term supply security in case of further Chinese export limits.
Additional reporting from Reuters notes that as part of the deal, Apple will prepay MP Materials $200 million for a future supply of magnets from the company’s Texas facility, which is expected to begin operations in 2027. The agreement also includes plans to build a new recycling facility at MP’s Mountain Pass site in California, where materials from discarded electronics will be recovered and reused in future Apple products. Additionally, Apple and MP plan to construct another factory in Fort Worth, Texas, to manufacture magnets for use in Apple devices and other electronics globally. The companies have not disclosed the specific volume of magnets covered by the agreement.
MP Materials currently mines and processes rare earth elements at its Mountain Pass, California, site and is expected to begin commercial magnet production at its Texas facility by the end of the year. The company already has magnet supply agreements in place with General Motors and Germany’s Vacuumschmelze.
Recently, MP Materials also made a deal with the U.S. government that includes a price floor for rare earth elements, aimed at encouraging domestic investment in mining and processing — industries that have struggled to compete with China’s artificially low pricing. The price guarantee is designed to shield MP from potential market manipulation, such as China flooding the market to drive down global prices. Under the same agreement, the government has pledged to purchase — or ensure commercial buyers for — all magnets produced at MP’s new manufacturing facility. MP Materials says it will produce 10,000 metric tons of magnets under this plan, enough to meet both U.S. defense and commercial needs. For 2025, output is projected between 250 and 750 metric tons, supplying critical sectors like automotive, renewable energy, and military defense systems.
Historically, Apple has sourced its rare earth magnets primarily from Asia, including suppliers like Baotou INST Magnetic New Materials, which expanded to Vietnam in 2023. While President Trump had urged Apple to shift more production to the U.S., the company has faced challenges due to a lack of highly specialized domestic labor. Apple’s partnership with MP Materials aims to help grow that workforce and support the development of a sustainable U.S.-based magnet supply chain.
Apple, which sold around 232 million iPhones last year, has not specified which devices will incorporate MP’s magnets. However, MP says its supply will cover hundreds of millions of Apple products, potentially spanning key lines such as iPhones, Apple Watches, and AirPods. Apple already uses recycled rare earths in most of its major products — including the latest iPhones, iPads, MacBooks, Macs, and Apple Watches.
Analysis
The Apple-MP Materials deal is the first sign of a trend in U.S. corporations shifting their mineral purchases from Chinese companies to domestic suppliers. Earlier this year, in response to President Trump’s reciprocal tariffs on Chinese goods, China expanded its export controls to include seven additional medium and heavy rare earth elements, temporarily halting their export. The newly restricted elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — are essential to a range of industries, from electric vehicles and semiconductors to military systems such as missiles and drones.
In response, President Trump has directed federal agencies to revitalize domestic mining efforts. This includes exploring unconventional sources, such as coal ash, which may contain significant concentrations of rare earth minerals, presenting a potential new avenue for securing a domestic supply. He also signed an executive order directing agencies to support mining leases on federal lands.
Ending U.S. dependency on Chinese mineral production and trade is essential to economic stability and national security. While the Trump administration’s recognition of this need is a positive sign, achieving mineral independence requires extensive permitting reform by Congress.
According to IER’s 2023 report, “The Economic and Strategic Importance of Domestic Mineral Production,” it takes seven to 10 years for U.S. mines to gain the necessary permits to begin operations. When compared to Australia and Canada — whose mines only take two years to begin operating, despite having similar environmental standards — it becomes obvious that the U.S. has a permitting problem. Because inefficient permitting increases costs by as much as 50% of a mine’s expected returns, reforming laws such as the National Environmental Policy Act and the Clean Air Act to reduce delays would make U.S. mines more competitive internationally.
Apple’s investment in MP Materials indicates that it recognizes the risk of continuing to do business with China. This deal should allow Apple to build its products without fears of a rare earths supply shock, which is currently a problem for U.S. automakers. It’s also encouraging to see that the U.S. rare earths industry is gaining ground, but sustained growth will require congressional action.
