Apple to buy rare earths from Pentagon-backed US firm in US$500 million deal

Apple has struck a US$500 million deal to buy rare earth minerals from MP Materials, the US producer that just last week secured backing from the Pentagon.

The two companies will build a factory in Texas, with neodymium magnet manufacturing lines tailored for Apple products, the iPhone maker said Tuesday in a statement.

Apple said the spending on rare earth minerals is part of its earlier pledge to invest more than US$500 billion in the US over the next four years.

Shares of MP Materials surged as much as 18 per cent in New York to the highest intraday price since April 2022, while Apple’s stock rose as much as 1 per cent. Fox News reported some details on the supply deal earlier on Tuesday.

The world’s dependence on China for rare earth permanent magnets that are essential for consumer tech, cars, wind turbines and fighter aircraft has become a flash point in the US trade war with the Asian nation.

After the Trump administration imposed 145 per cent tariffs on China, boasting that it had the upper hand, Beijing turned the tables by essentially shutting down exports of the critical component. MP Materials operates the sole US rare earth mine at Mountain Pass in California.