Apple said it will invest $500 million in its new partnership with MP Materials, "the only fully integrated producer of rare earths elements in the United States."
A recycling line
The two companies will also establish a "state-of-the-art rare earth element recycling line in Mountain Pass, California", for reuse in Apple products. They will also develop "new magnet materials and innovative processing technologies to improve magnet performance".
Rare minerals supply in the United States
"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. We couldn’t be more excited about the future of American manufacturing, and we will continue to invest in the ingenuity, creativity, and innovative spirit of the American people," said Apple CEO Tim Cook, Bloomberg reports.
China's dominance in the sector
Contrary to their name, some rare earths are relatively widespread in the earth's crust, but their extraction and processing are complex and costly. China currently controls 92% of the world's production at the processing stage.
Essential components
Rare minerals are essential components in a wide range of products, including smartphones, wind turbines, LED bulbs, flat-screen TVs, electric vehicle batteries and MRI scanners.
Pressure from the Trump administration
Apple is thus fulfilling its commitment to invest $500 billion in its U.S. operations over the next four years, as announced earlier this year. This comes at a time when the Trump administration is pressuring Apple and other tech giants to relocate their production to the USA, rather than relying on assembly and sourcing sites mainly located in China, India and Vietnam.
The threat of tariffs
"I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the US," Trump said on Truth Social in May.
Lack of skilled labor
One of the obstacles to the production of iPhones in the United States is the lack of skilled labor. Tim Cook had already raised the issue at a Fortune magazine event in 2017. At the time, he described the workforce in China as a mix of craftsmanship, sophisticated robotics and IT skills.
Recycled materials at Apple
The collaboration is also part of Apple's long-term efforts to integrate more recycled materials into its products, a process begun long before Donald Trump came to power. The company maintains that it uses recycled rare minerals in its flagship products, including the magnets found in the latest iPhones, iPads, Apple Watch, MacBook and Mac. The iPhone 16, launched this year, contains 30% recycled materials.