China’s export restrictions on rare earth materials this spring lit a fire under U.S. officials, and it has turned into a scramble for rare earth independence. Beijing’s restrictions on dysposium and neodymium-praseodymium (NdPr) exposed a vulnerability in the supply chain, which could take years to fix.
One company that could spearhead it is MP Materials (NYSE:MP). It owns the only operational rare earth mining facility in the U.S.
Last week, the Pentagon invested $400 million in the company and the government is likely to keep supporting its expansion. The Pentagon investment caused MP stock to surge by 50% as analysts see recurring investments from the government.
Achieving domestic rare earth independence could take billions in investments, especially if the U.S. wishes to secure domestic supply beyond NdPr.
However, it’s not just the government rushing to ensure rare earth supply. Apple (NASDAQ:AAPL) has one-upped the Pentagon by announcing a $500 million agreement with MP Materials to secure recycled rare earth magnets.
Apple’s agreement with MP Materials
This deal is a geopolitical hedge that will ensure Apple can supply critical materials regardless of trade tensions. Under this partnership, Apple will prepay $200 million upfront for magnet supplies starting in 2027. MP Materials will operate the mines and production all by itself.
Like the Pentagon agreement, Apple’s one also includes a guarantee mechanism.
Is it too late to buy MP Stock?
MP stock has reached record highs and is up over 295% in the past year due to the Pentagon and Apple agreements, but it’s unlikely that you’re too late to the party.
Other companies like Nvidia (NASDAQ:NVDA) could rush to secure their own supply, followed by hyperscalers, automakers, and many other manufacturing companies. There’s massive long-term expansion potential here.
I’d buy before more investments start rolling in.
