U.S.-based tech giant Apple secures a half-billion dollar agreement with MP Materials for developing a domestic supply chain of rare earth magnets.
In a significant move towards securing a sustainable and domestic supply of critical rare earth magnets, tech giant Apple has entered into a multiyear, $500 million agreement with MP Materials. This partnership will see Apple sourcing American-made neodymium rare earth magnets from 100% recycled materials, a first for the tech industry.
Under the terms of the agreement, Apple will purchase these magnets from MP Materials' Independence facility in Fort Worth, Texas, which will be expanded with this investment. To support this initiative, a state-of-the-art recycling facility will be jointly launched by Apple and MP Materials at MP's Mountain Pass site in California. This facility will process recycled rare earth elements from used electronics and post-industrial scrap.
The recycled feedstock for the magnets will come primarily from post-industrial waste and retired electronics, aligning with Apple's goal to use 100% recycled rare earth elements in its devices. This deal enables Apple to build a domestic, circular supply chain for rare earth magnets, reducing its reliance on China amid escalating geopolitical tensions.
The first shipments of these recycled magnets to Apple are expected by 2027. This agreement marks a strategic shift by Apple to secure a sustainable, domestic supply of critical rare earth magnets for its products like iPhones, Macs, and AirPods.
MP Materials, the only US firm with end-to-end capabilities for rare earth magnet manufacturing, has spent nearly five years developing recycling technologies capable of meeting Apple's stringent performance and environmental standards. The company is also expecting a US$150 million Pentagon loan to enhance its heavy rare earths separation capabilities at Mountain Pass.
Just days before the Apple deal, MP secured a $400 million preferred equity investment from the US Department of Defense (DoD), making the Pentagon its largest shareholder. The US government has also committed to purchasing 100 percent of the magnets produced at the new plant for 10 years.
As part of this partnership, MP will expand its Fort Worth, Texas, facility, creating dozens of new roles in manufacturing, as well as research and development. Additionally, MP will build a commercial-scale recycling line at its Mountain Pass site to process magnet scrap and recovered components from decommissioned products.
The deal marks a major step forward in Apple's plan to build more sustainable domestic supply chains for its core technologies. Apple is pressing ahead with its $500 billion US manufacturing initiative, and MP's expansion plans include the commissioning of a second magnet manufacturing plant, called the 10X facility, in 2028. This facility will increase MP's annual magnet output to 10,000 metric tons.
The guaranteed floor price for neodymium-praseodymium oxide is US$110 per kilogram, with the government receiving 30 percent of any profits above this level. If market prices fall below this level, the DoD will pay the difference. MP's share price soared 20 percent following the news, pushing its market cap to near $10 billion.
This partnership between Apple and MP Materials is set to revolutionise the tech industry's approach to sourcing rare earth magnets, promoting sustainability, domestic manufacturing, and advanced recycling technology in the United States.
In this partnership, Apple plans to purchase neodymium rare earth magnets from MP Materials' facility in Fort Worth, Texas, signifying a significant step in the tech industry's approach to business, finance, and technology, particularly in the realm of sustainability and domestic manufacturing. The state-of-the-art recycling facility, a joint venture between Apple and MP Materials, will process recycled rare earth elements from post-industrial waste and retired electronics.
