US DoD Becomes Largest Shareholder in MP Materials as US and Apple Invest $900 Million to Secure Rare Earth Supply Chains

On Thursday, MP Materials (NYSE: MP) announced a multibillion-dollar agreement with the US government aimed at increasing the production of rare earth magnets. This strategic deal is designed to reduce US dependency on China for critical materials used in the manufacture of weapons, electric vehicles, and various electronics.

The details of the agreement include substantial government investments and support to prioritize MP Materials as a closed-loop producer and processor of rare earth elements (REE) in the United States. The deal establishes a price floor for neodymium-praseodymium (NdPr) at $110 per kilogram, nearly double the current price set by Chinese suppliers. This arrangement is expected to incentivize MP Materials to maintain high levels of production.

The announcement occurred in July 2025 and marks a significant step in US government policy to prioritize domestic critical materials supply chains. The report highlights that, as of the beginning of June 2025, MP Materials' stock price has tripled, largely attributed to this government backing and an additional $500 million investment from Apple and a $400 million commitment from the Department of Defense. In Q1 2025, MP Materials reported record production of 563 metric tons of NdPr oxide and 12,213 metric tons of rare earth oxide, with 10% of revenue derived from the Magnetics segment, bolstered by a partnership with General Motors.

This government-supported initiative aims to strengthen US industrial capabilities and minimize vulnerability to foreign supply chain disruptions. In summary, the multi-billion dollar deal positions MP Materials as a central player in US critical materials strategy and supports significant expansion of domestic rare earth magnet manufacturing.

On July 15, 2025, Apple announced a major $500 million multiyear investment commitment to MP Materials, the United States' largest fully integrated rare earth producer. This historic partnership aims to fortify the American rare earth supply chain, which is critical for the production of advanced technology, and diminish reliance on China, currently the dominant global supplier of these materials. The investment will finance the expansion of MP Materials' flagship Independence facility in Fort Worth, Texas, involving the addition of state-of-the-art neodymium magnet manufacturing lines specifically tailored for Apple products. Moreover, the companies plan to establish an advanced rare earth recycling facility at Mountain Pass, California, to process recycled rare earth elements, alongside developing novel magnet materials and innovative processing technologies. These steps are designed to enhance magnet performance while promoting sustainable manufacturing practices. Apple's CEO, Tim Cook, emphasized the importance of American innovation and manufacturing, stating, "American innovation drives everything we do at Apple, and we're proud to deepen our investment in the U.S. economy." This commitment aligns with Apple's broader pledge to invest over $500 billion in the U.S. economy over the next four years and continues their historic focus on innovation, advanced manufacturing, and recycling technologies. The MP Materials partnership signals a strategic shift towards securing critical materials domestically, thereby reinforcing national supply resilience amid escalating global competition and geopolitical tensions. The collaboration's immediate outcomes include bolstered U.S. manufacturing capacity for rare earth magnets, cutting-edge recycling capabilities, and progress toward novel materials development, all essential for sustaining the tech industry’s advancement and reducing foreign dependency.

In a significant development aimed at strengthening US rare earth mineral supply chains, the US Department of Defense (DoD) has become the largest shareholder in MP Materials, the operator of the only operational rare earths mine in the United States, located in Mountain Pass, California. The DoD purchased $400 million in preferred stock, under an agreement that spans 10 years ensuring MP Materials receives a minimum price of $110 per kilogram for its critical rare earth elements neodymium and praseodymium. These two elements, essential for producing permanent magnets used in smartphones, MRI scanners, electric motors, electric vehicles, and renewable energy technologies, are in high demand globally.

This move addresses strategic concerns over US dependency on China, which controls approximately 70% of global rare earth mining and 90% of the refining capacity. China's near-monopoly had previously allowed it to exert downward pressure on prices and limit market access, fueling tensions in the US-China trade dynamic.

In a parallel strategic partnership, Apple announced a multiyear $500 million deal to purchase American-made rare earth magnets developed at MP Materials' Fort Worth, Texas facility. Apple and MP Materials will collaborate on a new rare earth recycling line in Mountain Pass, California, and work to develop novel magnet materials and improved production technologies aimed at boosting magnet performance. The companies expect to start shipping magnets by 2027. This deal is part of Apple's commitment to invest over $500 billion in US manufacturing over the next four years, including establishing new roles in manufacturing and research and development.

Apple CEO Tim Cook emphasized, "American innovation drives everything we do at Apple, and we're proud to deepen our investment in the U.S. economy. 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."

Since the start of the year, MP Materials’ stock has surged nearly fourfold, with its market capitalization approaching $10 billion, reflecting investor confidence in the strategic importance of domestic rare earth production. This comprehensive support from the US government and private sector represents a pivotal step to reduce reliance on foreign sources and bolster America's technological and manufacturing independence in rare earth elements.