MP Materials, which runs the only American rare earths mine, announced a new $500 million agreement with tech giant Apple on Tuesday to produce more of the powerful magnets used in iPhones as well as other high-tech products like electric vehicles.
This news comes on the heels of last week’s announcement that the U.S. Defense Department agreed to invest $400 million in shares of the Las Vegas-based company, establish a floor for the price of key elements and ensure that all of the magnets made at a new plant in the first 10 years are purchased.
Rare earths are a key concern in ongoing U.S. trade talks. China dominates the market and imposed new limits on exports after President Donald Trump announced his widespread tariffs. When shipments dried up, the two sides sat down in London.
Despite their name, the 17 rare earth elements aren’t actually rare, but it’s hard to find them in a high enough concentration to make a mine worth the investment. They are important ingredients in everything from smartphones and submarines to wind turbines and fighter jets.
The Apple deal represents a sliver of the company’s pledge to invest $500 billion domestically during the Trump administration. And although the deal will provide a significant boost for MP Materials, the agreement with the Defense Department is likely to be even more meaningful.
Mukherjee, the analyst, says the Pentagon’s 10-year promise to guarantee a minimum price for the key elements of neodymium and praseodymium will guarantee stable revenue for MP Minerals and protect it from potential price cuts by Chinese producers that are subsidized by their government.
Source: Usnews
