Apple has signed a $500 million deal to bolster its U.S. supply chain.
The multiyear deal has Apple buying rare earth magnets made in the United States at MP Materials' flagship facility in Fort Worth, Texas. The two companies are also joining forces to develop a new rare earth recycling facility in Mountain Pass, California, an area between Las Vegas and Los Angeles. Additional details, including timing, location and details of the new facility, were not immediately disclosed.
"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," Apple CEO Tim Cook said in a Tuesday statement from the iPhone maker.
Apple uses rare earth magnets to make iPhones and devices. Rare earth magnets are used in everything from vehicles to consumer electronics and systems powering renewable energy.
The iPhone maker's deal with MP Materials pushed the rare earth miner's stock up by 24% on Tuesday, hours after the announcement, and is a part of Apple's bigger pledge to invest more than $500 billion in the United States over the next four years.
Apple and MP Materials plan to build out the Texas facility with a series of neodymium magnet manufacturing lines specifically designed for Apple products, according to the statement. The new lines are expected to significantly boost the building's production capacity.
The duo is also developing a new recycling facility in Mountain Pass where used electronics and post-industrial scrap can be reprocessed for use in Apple products. Apple and MP Materials have worked together in developing this advanced recycling technology for nearly five years, the statement said.
Nearly all magnets across Apple devices are now made with 100% recycled rare earth elements, the company said. Apple pioneered the use of recycled rare earth elements in its consumer electronics beginning in 2019.
Apple isn't alone in teaming up with MP Materials. General Motors, the Saudi Arabian Mining Co. and — as of last week — the U.S. Department of Defense have also all formed deals with the rare earth miner. The Department of Defense is now MP Materials' largest shareholder, according to a statement last week from the miner.
The public-private partnership with the Department of Defense is meant to help reduce the nation's dependence on foreign-built rare earth magnets, officials said. MP Materials has a commitment letter from JPMorgan Chase Funding Inc. and Goldman Sachs Bank USA to provide $10 billion for the costs of constructing and developing a so-called 10X Facility as part of the 10-year agreement.
The deal with the Department of Defense marks MP Materials' second domestic manufacturing facility in a "soon-to-be-chosen location to serve both defense and commercial customers," officials said, with operations expected to begin in 2028.
With a second facility, MP Materials' capacity is expected to reach 10,000 metric tons. To put this into perspective, an adult African elephant can weigh between 4 and 7 metric tons, making this production the equivalent of at least 2,500 elephants.
Apple and MP Materials did not immediately respond to emailed interview requests from CoStar News seeking additional details.