Apple Moves to Reduce China Dependence With Rare Earth Deal

In a strategic move to reduce reliance on China, Apple has entered a US$500 million agreement with US-based MP Materials to secure a long-term supply of rare earth minerals. As part of the deal, both companies will construct a facility in Texas dedicated to producing neodymium magnets tailored for Apple’s products.

MP Materials currently operates the only active rare earth mine in the United States, located in Mountain Pass, California. The announcement triggered a strong market response. MP Materials’ shares rose by up to 28%, marking their highest intraday value since April 2022, while Apple’s stock recorded a modest 1% gain.

“Rare earths are essential for manufacturing advanced technologies. This collaboration will help strengthen the domestic supply chain of these critical materials,” stated Apple CEO Tim Cook.

Beyond the new Texas manufacturing site, Apple and MP Materials also plan to develop a recycling operation at Mountain Pass. The companies will work together on new magnetic materials and advanced processing technologies, enabling the integration of recycled rare earths into Apple’s supply chain, advancing the company’s sustainability goals.

MP Materials CEO James Litinsky highlighted that the partnership deepens vertical integration, enhances supply chain resilience, and reinforces the United States’ industrial capabilities. Magnet shipments from the Texas facility are expected to begin in 2027.

China’s Rare Earths 

Permanent magnets made from rare earth elements have become central to the ongoing trade friction between the United States and China. Tensions escalated when Beijing halted rare earth exports in response to 145% tariffs imposed by the Trump administration. 

China’s export restrictions have had ripple effects across global industries. Manufacturers such as Ford and Suzuki have paused portions of their operations, and Tesla CEO Elon Musk has noted that rare earth shortages are hampering progress in robotics. In response, governments around the world are working to secure alternative supply sources.

Recently, there have been signs of reduced tensions. Following trade negotiations in Geneva and London, China has resumed some rare earth exports, while the United States has eased export restrictions on certain semiconductors, including chips from Nvidia and AMD.