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 are not any giant U.S. makers of the neodymium magnets that underpin enormous and vitally vital industrial and protection industries, together with electrical autos. 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 mild on particulars. The corporate disclosed that it had began producing the magnets, referred to 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 accordance with MP’s spokesman, Matt Sloustcher, the ability may have an preliminary capability of 1,000 tonnes each year, and has the infrastructure in place to scale as much as 2,000 to three,000 tonnes per 12 months. The discharge additionally mentioned that the ability, in Fort Price, Texas, would provide magnets to Normal Motors and different U.S. producers.

NdFeB magnets are probably the most highly effective and helpful kind. They’re utilized in motors for electrical autos and for heating, ventilating, and cooling (HVAC) methods, in wind-turbine mills, in instruments and home equipment, and in audio audio system, amongst different gear. They’re additionally vital elements of numerous navy methods and platforms, together with fighter and bomber plane, submarines, precision guided weapons, night-vision methods, 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, isn’t the one main rare-earth-magnet mission within the U.S. Most notably, Vacuumschmelze GmbH, a magnet maker primarily based in Hanau, Germany, has begun setting up a plant in South Carolina by 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 Normal Motors for its future magnets.)

In one other intriguing U.S. rare-earth magnet mission, Noveon Magnetics, in San Marcos, Texas, is at present producing what it claims are “industrial portions” of NdFeB magnets. Nonetheless, the corporate isn’t making the magnets in the usual means, beginning with steel alloys, however quite 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.

Yet 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. 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 regionally produced and giving confidential U.S. navy information to Chinese language businesses.

The a number of US neodymium-magnet initiatives are noteworthy however even collectively they received’t make a noticeable dent in China’s dominance. “Let me offer you a actuality test,” says Steve Constantinides, an IEEE member and magnet-industry advisor primarily based in Honeoye, N.Y. “The whole manufacturing of neo magnets was someplace between 220 and 240 thousand tonnes in 2024,” he says, including that 85 % of the whole, no less than, was produced in China. And “the 15 % 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 %.)

However take a look at the figures from a unique 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.] services can supplant a big share of U.S. imports, assist re-start an {industry}, and scale because the manufacturing of motors and different magnet-dependent industries” returns to the USA, he argues.

And but, it’s onerous 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 12 months, Constantinides figures. (The corporate lately introduced that it was constructing one other facility, to start working in 2026, that it says will deliver its put in capability to 60,000 tonnes a 12 months.)

That 25,000 tonnes determine is corresponding 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 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 steel, and that just about at all times leads straight again to China. “Although they solely produce, say, 85 % of the magnets, they’re producing 97 % 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 might have an attention-grabbing edge. Hardly any companies, even in China, do what MP is making an attempt: produce completed magnets beginning with ore that the corporate mines itself. Even giant 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 endeavor requiring completely completely different tools, processes, information, and ability units.

The uncommon earth steel produced at MP Supplies’ magnet manufacturing facility in Fort Price, Texas, consists of largely 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} advisor 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 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, quite than as some projection in a forecast.”

Nonetheless, it’s going to be an uphill climb. “There’s are quite a lot of each onerous and gentle subsidies within the provide chain in China,” says John Ormerod, an {industry} advisor 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 % 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 tip of this 12 months,” says Ormerod, citing figures gathered by Singapore-based analyst Thomas Kruemmer. “The demand is simply about 50 % of that.”

The upshot, all the analysts agree, shall be downward worth strain on uncommon earth magnets within the close to future, no less than. On the identical time, the U.S. Division of Protection has made it a requirement that rare-earth magnets for its methods 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 ascertain a worth flooring enabling home U.S. producers to efficiently and repeatedly provide the DoD,” says Constantinides.

However is what’s good for America good for Normal Motors, on this case? We’re all going to search out out in a 12 months or two. In the meanwhile, 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 applying of tariffs to magnets in an try to ‘degree the enjoying discipline’ incentivizes firms to search 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 %.”