Apple invests $500M in Pentagon-backed MP Materials

Tech giant Apple (NASDAQ: AAPL) has struck a $500 million deal with Pentagon-backed MP Materials (NYSE: MP), the United States’ only producer of rare earth elements, as part of a larger effort to secure domestic supply chains for smartphones and electric vehicles.The investment includes Apple purchasing US-made rare earth magnets from MP Materials’ facility in Fort Worth, Texas. The two companies will co-develop a factory with neodymium magnet production lines specifically tailored for Apple products. The investment is part of Apple’s broader strategy to increase domestic manufacturing, with plans to spend more than $500 billion in the US over the next four years.Shares of MP Materials surged 22.5%to $59.5 in early trading in New York on Tuesday, the highest intraday price since April 2022. Apple’s stock was up a modest 1%, trading at $211 each.“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 chief executive officer Tim Cook said in the statement.Apple said the collaboration will create dozens of new manufacturing and R&D jobs. It also includes a rare earth recycling initiative at MP Materials’ Mountain Pass mine in California, which will convert recycled feedstock into materials for Apple products. The companies will co-develop new magnet materials and innovative processing technologies to improve performance.“This collaboration deepens our vertical integration, strengthens supply chain resilience, and reinforces America’s industrial capacity at a pivotal moment,” MP Materials CEO James Litinsky said in a separate statement Tuesday. MP Materials landed last week a multi-billion-dollar deal with the US Department of Defense (DoD) to develop a domestic rare earth supply chain. The deal aims to reduce dependence on foreign sources, particularly China.MP Materials lands multi-billion Pentagon dealEarlier this year, after the U.S. imposed 145% tariffs on Chinese imports, Beijing retaliated by halting exports of rare earths magnets, critical for electronics, wind turbines, EVs, and fighter jets. The move disrupted global supply chains: Ford and Suzuki halted some production, Elon Musk cited shortages affecting his robotics operations, and governments scrambled to lock down non-Chinese sources.Despite global demand, producers outside China, including MP Materials and Australia’s Lynas Rare Earths (ASX: LYC), have struggled with profitability due to weak prices and oversupply.MP Materials expects to supply magnets to General Motors by year-end and begin shipping from its Texas plant in 2027 to support hundreds of millions of Apple devices._____________________________________How MP Materials revived Mountain PassIn the 1970s and ’80s, Mountain Pass was the world’s top producer of rare earths. By the early 2000s, however, China had flooded the market, driving prices so low that US production became unviable. Mountain Pass halted operations in 2002.The mine changed hands several times before Molycorp acquired it, going public with an IPO in 2010. By 2015, Molycorp shut the mine down and filed for bankruptcy three months later, triggering a fierce legal battle over the site’s future.Among the creditors was James Litinsky, who had invested $100 million in Molycorp’s debt. While others pushed to shut down and reclaim the mine, Litinsky saw an opportunity. He bet on the growing demand for electric vehicles, fuelled by Tesla’s rise, and believed rare earth mining would become vital again.Litinsky ultimately secured control of Mountain Pass. In 2017, he founded MP Materials to revive the mine and restart production. Three years later, the company went public, marking the beginning of its second act.Refining followed in 2023 and today Mountain Pass is the world’s second-largest rare earth mine.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com