Apple and Pentagon Boost America’s Only Rare Earth Producer: Why This $900M Deal Could Reshape Global Tech Supply Chains
In a landmark move set to reshape the rare earth landscape in the U.S., MP Materials — the only rare earth producer on American soil — has secured two major agreements totaling $900 million from Apple Inc. and the U.S. Department of Defense. These deals not only secure MP’s future but also signal a tectonic shift in the global rare earths supply chain currently dominated by China.
The Las Vegas-based mining firm announced a $500 million deal with Apple to supply rare earth magnets used in iPhones and other Apple devices, while the Pentagon will inject $400 million into MP through a direct equity stake and price guarantees for essential rare earth elements. These moves aim to bolster U.S. self-sufficiency in critical materials vital for smartphones, electric vehicles (EVs), military equipment, and green energy infrastructure.
Why Rare Earths Matter
Despite the name, rare earth elements (REEs) aren’t geologically rare — but extracting them in usable concentrations is. These 17 elements are crucial in modern electronics and defense systems. They power magnets in EV motors, enable smartphones to vibrate, and are indispensable in jet fighters, wind turbines, and naval sonar.
Currently, over 80% of the global rare earth processing capacity is controlled by China. The U.S. has long recognized this vulnerability, especially amid rising geopolitical tensions and supply chain disruptions triggered by tariffs and export restrictions.
The Apple Deal: Recycling Tech with National Impact
Apple’s partnership with MP Materials is a significant step in its broader sustainability strategy. The deal will allow MP to expand its Texas-based factory, which will focus on producing neodymium magnets — primarily using recycled materials — for use in future iPhones starting in 2027.
“This isn’t just about sourcing — it’s about responsibility,” said Steve Christensen, Executive Director of the Responsible Battery Coalition. “Apple’s move signals a new phase in rare earth recycling and circular tech innovation.”
While this agreement helps Apple meet sustainability goals, it also supports U.S. efforts to reduce reliance on China and promotes domestic rare earth processing infrastructure.
The Pentagon Deal: Security Through Sovereignty
The Department of Defense’s $400 million investment may prove even more pivotal. The deal includes:
- A 10-year minimum price guarantee for neodymium and praseodymium — two key rare earth elements used in defense and clean energy.
- A commitment to purchase all of MP Materials’ new factory output for military use during the first decade of operations.
- Direct share acquisition, making the Pentagon the company’s largest stakeholder.
“This is the kind of long-term commitment needed to reshape global rare earth supply chains,” said Neha Mukherjee, a rare earths analyst with Benchmark Mineral Intelligence.
Experts see this as more than a simple investment — it’s a strategic move to insulate the U.S. defense sector from potential Chinese supply shocks.
Why This Matters Now
The rare earth market is under the geopolitical spotlight. After President Trump’s sweeping tariffs and China’s retaliatory export controls, rare earths became a bargaining chip in global trade talks. Recently, both nations agreed to loosen certain non-tariff measures. China will issue export permits for rare earth magnets to the U.S., while America will ease restrictions on semiconductor design software and jet engine exports.
But analysts remain skeptical. “The truce won’t solve fundamental differences. Both countries are still aggressively trying to decouple critical supply chains,” said Julie Boote, analyst at Pelham Smithers Associates.
What’s Next for MP Materials?
- EV Growth: MP is set to begin supplying magnets for GM’s electric vehicles later this year.
- Factory Expansion: The Apple deal allows a major expansion of their Texas facility.
- Revenue Security: The Pentagon’s price floor guarantees MP stable earnings even if China attempts to undercut prices.
- Leadership Position: With government backing, MP Materials could become a global leader in rare earth processing outside of China.
FAQs
Q: Why are rare earths important?
Rare earths power critical technologies including smartphones, EVs, defense systems, wind turbines, and more.
Q: Why does China dominate the market?
China offers government subsidies and looser environmental regulations, making rare earth production cheaper and more scalable.
Q: What makes the Pentagon’s deal unusual?
It’s rare for the U.S. government to directly invest in a private company and commit to long-term price guarantees.
Q: What role does Apple play in this?
Apple’s deal focuses on sustainability — using recycled materials to reduce waste and support local supply chains.
Q: Will this solve the U.S. rare earth dependency?
Not completely. MP Materials can’t meet full domestic demand alone. More investment and new mines are needed.
The Bottom Line
The twin investments from Apple and the Pentagon offer MP Materials a launchpad to grow into a rare earth powerhouse. For Washington, it’s about national security and economic independence. For Apple, it’s innovation with sustainability. And for investors, it could be the start of America’s comeback in a market it once dominated but let slip away.
As trade tensions persist and tech demand soars, reshoring rare earth production may no longer be optional — it’s becoming a strategic necessity.
