This Company Used To Be Obscure. Now Apple and the DOD Are Buying In
Key Takeaways
- MP Materials’ Mountain Pass, Calif., facility, the only operational rare earths mine in the U.S., and its magnet plant in Fort Worth, Texas, have drawn interest from investors ranging from the Pentagon to tech giant Apple in recent days.
- Washington has made domestic rare earths production a national security priority. China controls 90% of the production of these metals.
- MP Materials shares have surged more than 250% this year.
Why is everyone suddenly so interested in MP Materials (MP)?
The answer: The company’s Mountain Pass, Calif., facility—the only operational rare earths mine in the U.S.—and its magnet plant in Fort Worth, Texas. Together, they’ve attracted large quantities of both investment and stock-market interest.
Apple (AAPL) on Tuesday said it would invest the $500 million it has pledged domestically, as part of President Donald Trump’s push to boost U.S. production, into the Las Vegas-based company. The iPhone maker, which is moving to put more of its supply chain at home, will buy rare earth magnets made in the Texas MP Materials plant and work with the company on a new rare earth recycling line in Mountain Pass.
The news sent MP shares soaring Tuesday, adding to their 250%-plus price surge this year; its shares are trading at record levels, topping highs seen in 2022. Deutsche Bank analysts called the Apple investment “another positive” coming just days after the company obtained a new top shareholder: the Defense Department.
MP Materials said last week that the Pentagon would take an up to 15% stake in the company, help fund expansion of its Mountain Pass facility, and also buy its NdPr (Neodymium-Praseodymium) metals for the next 10 years for at least $110 per kilogram. That price, according to a Jefferies note, is “nearly two times” the spot price of the metal in China.
“The scale of the U.S. commitment underscores the strategic importance of rare earth magnets (used in missiles, fighter jets, EV motors, wind turbines, and advanced electronics), and directly counters China’s rare earth dominance,” Jefferies analysts wrote.
Washington has made domestic rare earths production a national security priority, especially because China controls 90% of the production of these metals—used in cutting-edge products ranging from smartphones and robotics to building stealth F-35 fighter jets. Beijing put the U.S. dependence on the country in focus in April when it imposed retaliatory curbs on exports of the metals after Trump’s tariffs were announced—although it recently opened the door to selling them amid a trade truce.
MP Materials restarted the Mountain Pass mine in 2017, after it was idled in 2015. Between 1965 and 1995, according to the company, the mine supplied the majority of the world’s rare earths, before production of them largely moved outside the U.S.
The company, which according to Visible Alpha has a market value of around $9.5 billion, went public in 2020.