MP Materials unveiled a multibillion-dollar deal with the U.S. government on Thursday to boost output of rare earth magnets and help loosen China's grip on the materials used to build weapons, electric vehicles and many electronics.

Apple has struck a US$500 million deal to buy rare earth minerals from MP Materials, the US producer that just last week secured backing from the Pentagon. The two companies will build a factory in Texas, with neodymium magnet manufacturing lines tailored for Apple products, the iPhone maker said Tuesday in a statement.