MP Supplies begins producing neodymium magnets within the US

In mid-January, a high United States supplies firm introduced that it had began to fabricate uncommon earth magnets. It was essential information—there aren’t any giant U.S. makers of the neodymium magnets that underpin large and vitally essential industrial and protection industries, together with electrical automobiles. But it surely created barely a ripple throughout a very loud and stormy time in U.S. commerce relations.

The press launch, from MP Supplies, was mild on particulars. The corporate disclosed that it had began producing the magnets, known as neodymium-iron-boron (NdFeB), on a “trial” foundation and that the manufacturing unit would start regularly ramping up manufacturing earlier than the top of this yr. In keeping with MP’s spokesman, Matt Sloustcher, the ability could have an preliminary capability of 1,000 tonnes every year, and has the infrastructure in place to scale as much as 2,000 to three,000 tonnes per yr. The discharge additionally mentioned that the ability, in Fort Value, Texas, would provide magnets to Common Motors and different U.S. producers.

NdFeB magnets are essentially the most highly effective and invaluable sort. They’re utilized in motors for electrical automobiles and for heating, ventilating, and cooling (HVAC) techniques, in wind-turbine turbines, in instruments and home equipment, and in audio audio system, amongst different gear. They’re additionally important elements of numerous army techniques and platforms, together with fighter and bomber plane, submarines, precision guided weapons, night-vision techniques, and radars.

A magnet manufacturing surge fueled by Protection {dollars}

MP Supplies’ has named its new, state-of-the-art magnet manufacturing facility Independence.Enterprise Wire

The Texas facility, which MP Supplies has named Independence, shouldn’t be the one main rare-earth-magnet undertaking within the U.S. Most notably, Vacuumschmelze GmbH, a magnet maker primarily based in Hanau, Germany, has begun developing a plant in South Carolina by way of a North American subsidiary, e-VAC Magnetics. To construct the US $500 million manufacturing unit, the corporate secured $335 million in outdoors funds, together with no less than $100 million from the U.S. authorities. (E-VAC, too, has touted a provide settlement with Common Motors for its future magnets.)

In one other intriguing U.S. rare-earth magnet undertaking, Noveon Magnetics, in San Marcos, Texas, is presently producing what it claims are “industrial portions” of NdFeB magnets. Nevertheless, the corporate shouldn’t be making the magnets in the usual approach, beginning with steel alloys, however fairly in a novel course of primarily based on recycling the supplies from discarded magnets. USA Uncommon Earth introduced on 8 January that it had manufactured a small quantity of NdFeB magnets at a plant in Stillwater, Oklahoma.

One more firm, Quadrant Magnetics, introduced in January, 2022, that it could start development on a $100 million NdFeB magnet manufacturing unit in Louisville, Kentucky. Nevertheless, 11 months later, U.S. federal brokers arrested three of the corporate’s high executives, charging them with passing off Chinese language-made magnets as regionally produced and giving confidential U.S. army information to Chinese language businesses.

The a number of US neodymium-magnet initiatives are noteworthy however even collectively they gained’t make a noticeable dent in China’s dominance. “Let me provide you with a actuality verify,” says Steve Constantinides, an IEEE member and magnet-industry guide primarily based in Honeoye, N.Y. “The full manufacturing of neo magnets was someplace between 220 and 240 thousand tonnes in 2024,” he says, including that 85 p.c of the overall, no less than, was produced in China. And “the 15 p.c that was not made in China was made in Japan, primarily, or in Vietnam.” (Different estimates put China’s share of the neodymium magnet market as excessive as 90 p.c.)

However have a look at the figures from a special angle, suggests MP Supplies’s Sloustcher. “The U.S. imports simply 7,000 tonnes of NdFeB magnets per yr,” he factors out. “So in complete, these [U.S.] services can supplant a major proportion of U.S. imports, assist re-start an {industry}, and scale because the manufacturing of motors and different magnet-dependent industries” returns to america, he argues.

And but, it’s exhausting to not be slightly awed by China’s supremacy. The nation has some 300 producers of rare-earth everlasting magnets, in accordance with Constantinides. The most important of those, JL MAG Uncommon-Earth Co. Ltd., in Ganzhou, produced no less than 25,000 tonnes of neodymium magnets final yr, Constantinides figures. (The corporate lately introduced that it was constructing one other facility, to start working in 2026, that it says will convey its put in capability to 60,000 tonnes a yr.)

That 25,000 tonnes determine is similar to the mixed output of all of the rare-earth magnet makers that aren’t in China. The $500-million e-VAC plant being in-built South Carolina, for instance, is reportedly designed to provide round 1,500 tonnes a yr.

However even these numbers don’t totally convey China’s dominance of everlasting magnet manufacturing. The place ever a manufacturing unit is, making neodymium magnets requires provides of rare-earth steel, and that almost at all times leads straight again to China. “Though they solely produce, say, 85 p.c of the magnets, they’re producing 97 p.c of the steel” on the planet, says Constantinides. “So the magnet producers in Japan and Europe are extremely depending on the rare-earth steel coming from China.”

MP’s Mine-to-Manufacturing stragegy

And there, no less than, MP Supplies could have an attention-grabbing edge. Hardly any corporations, even in China, do what MP is trying: produce completed magnets beginning with ore that the corporate mines itself. Even giant firms usually carry out only one or at most two of the 4 main steps alongside the trail to creating a rare-earth magnet: mining the ore, refining the ore into rare-earth oxides, decreasing the oxides to metals, after which, lastly, utilizing the metals to make magnets. Every step is a gigantic endeavor requiring fully completely different gear, processes, data, and ability units.

The uncommon earth steel produced at MP Supplies’ magnet manufacturing facility in Fort Value, Texas, consists of principally neodymium and praseodymium.Enterprise Wire

“The one benefit they get from [doing it all] is that they get higher insights into how completely different markets are literally rising,” says Stan Trout, a magnet {industry} guide in Denver, Colorado. “Getting the timing proper on any enlargement is essential,” Trout provides. “And so MP must be getting that info in addition to anyone, with the completely different crops that they’ve, as a result of they work together with the market in a number of other ways and might actually see what demand is like in actual time, fairly than as some projection in a forecast.”

Nonetheless, it’s going to be an uphill climb. “There’s are plenty of each exhausting and tender subsidies within the provide chain in China,” says John Ormerod, an {industry} guide primarily based in Knoxville, Tenn. “It’s going to be troublesome for a US producer to compete with the present worth ranges of Chinese language-made magnets,” he concludes.

And it’s not going to get higher any time quickly. China’s rare-earth magnet makers are solely utilizing about 60 p.c of their manufacturing capability, in accordance with each Constantinides and Ormerod—and but they’re persevering with to construct new crops. “There’s going to be roughly 500,000 tonnes of capability by the top of this yr,” says Ormerod, citing figures gathered by Singapore-based analyst Thomas Kruemmer. “The demand is simply about 50 p.c of that.”

The upshot, the entire analysts agree, will probably be downward worth strain on uncommon earth magnets within the close to future, no less than. On the similar time, the U.S. Division of Protection has made it a requirement that rare-earth magnets for its techniques have to be produced fully, beginning with ore, in “pleasant” international locations—which doesn’t embrace China. “The DoD might want to pay a premium over cheaper imported magnets to ascertain a worth ground enabling home U.S. producers to efficiently and repeatedly provide the DoD,” says Constantinides.

However is what’s good for America good for Common Motors, on this case? We’re all going to seek out out in a yr or two. For the time being, few analysts are bullish on the prospect.

“The automotive {industry} has been extraordinarily cost-conscious, demanding provider worth reductions of even fractions of a cent per piece,” notes Constantinides. And even the Trump administration’s tariffs are unlikely to change the fundamental math of market economics, he provides. “The appliance of tariffs to magnets in an try to ‘degree the taking part in subject’ incentivizes firms to seek out work-arounds, similar to exporting magnets from China to Malaysia or Mexico, then re-exporting from there to the USA. This isn’t theoretical, these work-arounds have been used for many years to keep away from even the previous or present low tariff charges of about 3.5 p.c.”