Apple Inc (NASDAQ:AAPL, ETR:APC) is reportedly set to invest $500 million in MP Materials, the operator of the only rare earths mine in the United States, according to Fox Business.
The announcement follows MP Materials’ recent multibillion-dollar agreement with the US government aimed at increasing domestic production of rare earth magnets, crucial for electric vehicles, electronics, and defence applications.
Shares of MP Materials surged over 12% in early trading after the news. The partnership is expected to include Apple purchasing American-made rare earth magnets from MP’s Texas facility, where commercial magnet production is anticipated to begin by year-end.
Plans also involve building a new magnet factory in Fort Worth, Texas, and a recycling plant at MP’s Mountain Pass site in California.
The US Department of Defense’s agreement with MP includes a price floor for rare earth materials to encourage investment in domestic mining and processing, countering the low prices influenced by China’s dominant market position.
The guaranteed price for key rare earths is nearly double the current market levels.