A rare earth magnet manufacturing plant being built in Fort Worth just got a financial boost to advance its planned delivery of products for General Motors electric vehicles. 

Las Vegas-based MP Materials—which began building the plant in Hillwood’s AllianceTexas development in April 2022—has received a $58.5 million award in the form of a 48C Advanced Energy Project tax credit allocation issued by the IRS and U.S. Treasury Department. The award followed “a competitive, oversubscribed process administered by the Department of Energy that evaluated the technical and commercial viability and environmental and community impact of approximately 250 projects,” MP Materials said.

The 200,000-square-foot facility will produce neodymium-iron-boron (NdPr) magnets—”the world’s most powerful and efficient permanent magnets,” according to MP Materials. They’re an “indispensable component” used in electric motors and generators in hybrid and electric vehicles, robots, wind turbines, drones, electronics, and defense systems.

As the world moves further toward electrification, global demand for the magnets is expected to triple by 2035, according to an Adamas Intelligence report.

Finished magnets to be produced by late 2025

MP Materials said it’s currently producing “magnet precursor materials” in a North American pilot facility. The company expects to begin commercial production of “precursor materials” at the Fort Worth plant this summer and begin producing “finished magnets” by late 2025. Both products will be delivered to General Motors, MP Materials’ “foundational customer,” to support its North American EV production.

The Fort Worth plant could ultimately power some 500,000 EV motors every year, the company said in 2021.

MP said it will source the factory’s raw materials from Mountain Pass, California, where the company owns and operates “America’s only scaled and operational rare earth mine and separations facility.” At the factory, NdPr oxide from Mountain Pass will be reduced to NdPr metal and converted to NdFeB alloy and finished magnets—”delivering an end-to-end supply chain with integrated recycling and world-class sustainability,” the company said.

Ross Perot Jr., chairman of The Perot Group, and MP Materials co-founder and CEO James Litinsky at the 2022 groundbreaking for MP’s new rare earth magnet factory at AllianceTexas in Fort Worth. [Photo: MP Materials]

Addressing a ‘serious national security risk’ with $700M investment

More than 90% of the world’s NdFeB magnets are produced in China, MP Materials noted.

A Commerce Department investigation found that sintered NdFeB magnets are “required for critical infrastructure” and “irreplaceable in key defense applications,” while noting that the U.S. is “essentially 100% dependent on imports,” leading to what MP Materials summarized as a “serious national security risk.”

“We’ll bring the supply chain home,” MP Materials CEO James Litinsky said at the plant’s 2022 groundbreaking event. “This is actually the corner of Independence and Liberty, which is very fitting for us to be building a new foundation right here.”

At that time, MP Materials said it was investing about $700 million over the next two years to fully restore the rare earth magnetics supply chain to the United States. 

“Magnets are synonymous with modern life,” Litinsky said in 2022. “Rare earth magnets are really what will power motion—electric vehicles, wind turbines, drones, robots, air taxis, whatever.”

The company announced a $35 million DOD heavy rare earth elements contract in February 2022. About that award, Litinsky said that “a multibillion dollar supply chain is not going to happen overnight. It’s going to take capital, it’s going to take perseverance. It requires a real coordination between our upstream and downstream industries.”

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