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 vital information—there aren’t any massive U.S. makers of the neodymium magnets that underpin enormous and vitally vital industrial and protection industries, together with electrical automobiles. Nevertheless it created barely a ripple throughout a very loud and stormy time in U.S. commerce relations.

The press launch, from MP Supplies, was gentle 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 step by step ramping up manufacturing earlier than the tip of this 12 months. In keeping with MP’s spokesman, Matt Sloustcher, the power 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 12 months. The discharge additionally stated that the power, in Fort Price, Texas, would provide magnets to Basic Motors and different U.S. producers.

NdFeB magnets are probably the most highly effective and helpful kind. They’re utilized in motors for electrical automobiles and for heating, ventilating, and cooling (HVAC) programs, in wind-turbine mills, in instruments and home equipment, and in audio audio system, amongst different gear. They’re additionally essential elements of numerous navy programs and platforms, together with fighter and bomber plane, submarines, precision guided weapons, night-vision programs, 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, will not be the one main rare-earth-magnet challenge within the U.S. Most notably, Vacuumschmelze GmbH, a magnet maker based mostly in Hanau, Germany, has begun establishing 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 exterior funds, together with a minimum of $100 million from the U.S. authorities. (E-VAC, too, has touted a provide settlement with Basic Motors for its future magnets.)

In one other intriguing U.S. rare-earth magnet challenge, Noveon Magnetics, in San Marcos, Texas, is at present producing what it claims are “industrial portions” of NdFeB magnets. Nonetheless, the corporate will not be making the magnets in the usual method, beginning with metallic alloys, however relatively in a singular course of based mostly 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 might start building on a $100 million NdFeB magnet manufacturing unit in Louisville, Kentucky. Nonetheless, 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 domestically produced and giving confidential U.S. navy information to Chinese language businesses.

The a number of US neodymium-magnet tasks are noteworthy however even collectively they received’t make a noticeable dent in China’s dominance. “Let me offer you a actuality verify,” says Steve Constantinides, an IEEE member and magnet-industry guide based mostly 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, a minimum of, 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 distinct angle, suggests MP Supplies’s Sloustcher. “The U.S. imports simply 7,000 tonnes of NdFeB magnets per 12 months,” he factors out. “So in complete, these [U.S.] amenities 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 the US, he argues.

And but, it’s onerous to not be a bit of awed by China’s supremacy. The nation has some 300 producers of rare-earth everlasting magnets, in response to Constantinides. The biggest of those, JL MAG Uncommon-Earth Co. Ltd., in Ganzhou, produced a minimum of 25,000 tonnes of neodymium magnets final 12 months, Constantinides figures. (The corporate not too long ago 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 12 months.)

That 25,000 tonnes determine is akin 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 supply round 1,500 tonnes a 12 months.

However even these numbers don’t absolutely convey China’s dominance of everlasting magnet manufacturing. The place ever a manufacturing unit is, making neodymium magnets requires provides of rare-earth metallic, and that just about 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 metallic” on this planet, says Constantinides. “So the magnet producers in Japan and Europe are extremely depending on the rare-earth metallic coming from China.”

MP’s Mine-to-Manufacturing stragegy

And there, a minimum of, 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 massive firms sometimes 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 enterprise requiring completely totally different gear, processes, information, and talent units.

The uncommon earth metallic produced at MP Supplies’ magnet manufacturing facility in Fort Price, 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 totally different markets are literally rising,” says Stan Trout, a magnet {industry} guide in Denver, Colorado. “Getting the timing proper on any enlargement is vital,” Trout provides. “And so MP ought to be getting that info in addition to anyone, with the totally different vegetation 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, relatively than as some projection in a forecast.”

Nonetheless, it’s going to be an uphill climb. “There’s are a number of each onerous and gentle subsidies within the provide chain in China,” says John Ormerod, an {industry} guide based mostly in Knoxville, Tenn. “It’s going to be tough for a US producer to compete with the present value 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 response to each Constantinides and Ormerod—and but they’re persevering with to construct new vegetation. “There’s going to be roughly 500,000 tonnes of capability by the tip of this 12 months,” says Ormerod, citing figures gathered by Singapore-based analyst Thomas Kruemmer. “The demand is just about 50 p.c of that.”

The upshot, all the analysts agree, can be downward value strain on uncommon earth magnets within the close to future, a minimum of. On the identical time, the U.S. Division of Protection has made it a requirement that rare-earth magnets for its programs have to be produced completely, 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 determine a value ground enabling home U.S. producers to efficiently and constantly provide the DoD,” says Constantinides.

However is what’s good for America good for Basic Motors, on this case? We’re all going to seek out out in a 12 months or two. In the intervening time, few analysts are bullish on the prospect.

“The automotive {industry} has been extraordinarily cost-conscious, demanding provider value 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 area’ 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 current low tariff charges of about 3.5 p.c.”