MP Materials announced a supply agreement with Apple worth up to US$500M, five days after the financing partnership with the DOD was announced.

The news follows days after a financing partnership with the U.S. Department of Defense (DOD) was announced. 

Few details have been disclosed, though regulatory filings indicate that the agreement comes with a US$200M prepay facility for the purchase of magnets from MP.   

In Project Blue’s view, while Apple was always a potential buyer of MP Materials’ products, this agreement appears to be focused on procuring recycled magnets over the long term, rather than magnets produced from the rare earths mined at Mountain Pass in California – which is where DOD funding is directed.   

MP Materials and Apple stated that the two companies had been collaborating on recycling technology for the last five years, out of the public eye, and that part of the US$500M commitment would contribute to the development and scaling of recycling capabilities at Mountain Pass. 

The potential volumes that could be recycled at Mountain Pass are unknown at this point. Presumably, some end-of-life materials could initially come from Apple’s own consumer electronic recycling program, potentially leading to the adoption of a tolling model. 

Unlike the DOD agreement, however, there is no indication that the Apple agreement would backstop an EBITDA margin at the recycling plant.  

Nevertheless, investments in NdFeB magnet recycling could circumvent the long value chain required to process rare earths from primary resources. 

Project Blue data shows recycled magnet supply doubling between 2024 and 2030, however, recycled magnets would still only account for a small market share globally.