“FORT WORTH -- At an industrial site in this Texas city, men dressed in head-to-toe protective gear dip giant ladles into a well of molten metal heated to 1,800 degrees Fahrenheit. They're making something the U.S. has hardly, if ever, produced at commercial scale in recent decades: rare-earth metals.
The factory is the most visible mark of MP Materials' high-stakes, billion-dollar bet that an American company can take on China's dominance over the metals -- and the magnets they power in everything from smartphones to missile systems.
In recent months, China has used its chokehold over 90% of the world's rare-earth magnets to cut off access to Western companies, rattling industrial giants such as Ford and Tesla and forcing the U.S. to the table for trade talks.
MP has invested more than $1 billion in new infrastructure and equipment. A mine it controls in California has become the largest source of rare-earth minerals in the Western Hemisphere. Now, with its expanding Texas facility and fresh investment from the Pentagon, the company is racing to complete the supply chain so it can start converting its minerals into high-grade magnets.
On Tuesday, the company announced a $500 million deal to supply Apple with rare-earth magnets made from recycled materials, with shipments expected to begin in 2027. General Motors is signed up to start taking deliveries later this year. And the Defense Department last week committed to invest hundreds of millions of dollars in MP and become its largest shareholder, in a deal that will allow MP to increase its planned magnet production to 10,000 metric tons from the previously planned 1,000.
A White House spokesman said the deal "marks a major step in rebuilding America's domestic rare earth industry." The company's stock jumped around 50% on the day of the announcement, and has tripled this year.
After years of private and government investment under Presidents Trump and Biden, magnet-makers are expanding across the U.S. in an effort to build an industrial base that could meet soaring demand independently of China.
Substantially cutting America's dependence on Chinese rare-earth magnets won't be easy, or cheap. But some experts posit it could theoretically be achieved within three to five years, if the current slate of projects push ahead.
Vulcan Elements, a Durham, N.C.-based magnet maker, plans to supply the military starting next year. Noveon, in San Marcos, Texas, has signed a deal to supply U.S.-made rare-earth magnets to Japan's Nidec, among the world's biggest motor makers. German magnet specialist VAC is expected to begin operating a Pentagon-funded factory near Sumter, S.C., later this year.
The projects are expected to have a combined capacity to produce several thousand metric tons of the magnets by the end of the year, which adds up to around a third or more of current U.S. imports.
"As we start to build out our permanent magnet manufacturing facilities in the U.S. and elsewhere, China starts to lose that leverage," said Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies.
MP, she added, is "essentially working at warp speed to address one of America's greatest national and economic security challenges of our time."
The company's journey there highlights the hurdles U.S. producers face as they look to reawaken the industry.
China still holds most of the cards. It has some of the world's best mines. It has cheap chemicals for processing, a large technically trained workforce and a stomach for handling toxic mining waste.
Western producers have long complained that the country uses its dominance to prevent competitors from emerging, sometimes by flooding the market with supplies, sometimes by adopting restrictive export policies. Beijing has banned the export of key rare-earth technologies and is compiling a list of China's rare-earth scientists to ensure they don't share their knowledge abroad.
For some companies, finding another source has become critical.
In April, China began requiring buyers of rare-earth magnets to submit elaborate export applications proving they don't have military links. The slow processing of these applications forced a Ford SUV plant to temporarily close and sent the wider industry into a panic. One auto supplier paid more than $15 a piece for tiny magnets that usually sell for less than 40 cents, according to a trader familiar with the transaction.
"We cannot get any high-power magnets without China," Ford CEO Jim Farley said at an event in late June.
Although U.S.-China trade negotiations have led to two separate truces that were supposed to make magnet supplies flow again, exports from China have remained lower than anticipated, especially to defense suppliers.
Some U.S. companies have said they are willing to pay a premium for supply-chain security. They may have to. MP and other emerging suppliers don't disclose the price of their magnets, but people involved in the industry say they are likely to be, at a minimum, 50% more expensive to produce than China's.
The U.S. has significant underground reserves of rare earths, 17 little-known minerals such as neodymium and samarium. But mining and processing them is complex and expensive. The country's once-thriving industry collapsed in the 1990s and 2000s, unable to compete with China.
MP co-founders James Litinsky and Michael Rosenthal got into the business almost by accident.
Since the middle of the 20th century, rare earths had been dug from Mountain Pass, a rich deposit in California's Mojave Desert. Molycorp, the previous company to run the mine, went bankrupt in 2015 after a surge in Chinese rare-earth exports tanked prices.
Litinsky and Rosenthal, childhood friends with backgrounds in finance, had invested in Molycorp bonds, hoping to turn a profit. Few others wanted the mine, and the pair worried a key strategic asset would be abandoned. In 2017 they gained control of Mountain Pass.
"There was a belief that it couldn't be fixed," said Litinsky, MP's chief executive.
He had gotten rich as a young man, after founding a successful Chicago hedge fund at the age of 28, but was looking for a new challenge. "I certainly didn't know what I was getting myself into."
MP needed to generate money, and fast, but Litinsky and Rosenthal encountered a bottleneck. Once the ore is mined, it has to undergo a complex process to separate the rare earths from the rock and then isolate the individual minerals. Almost no one outside of China knew how to do that at affordable prices.
Hiring was difficult; the mine had just eight workers -- and a lot of wild donkeys -- on a remote site. "We've got no money, we've got eight people, the site was bankrupt, everyone says the U.S. can't make rare earths," said Rosenthal, the company's operations chief. "We couldn't go to an engineer and say 'Want to leave Rio Tinto to join us?'"
MP struck an agreement with a Chinese rare-earth company, Shenghe Resources, to provide upfront financing, in exchange for a small stake in MP. Shenghe would then sell MP's ore to buyers in China, who refined it and then created magnets
As MP got on firmer footing, it used the money it earned from the arrangement to start building its own processing operations. The Pentagon started chipping in grants that came to around $100 million.
Although MP's initial processing operations removed rare earths from the rest of the ore, the company still had to separate out the individual elements, each of which is nearly chemically identical. Rosenthal likened the challenge to designing a chemical process to sort out blue M&Ms from the rest of the M&Ms, and then extracting the cocoa from those candies.
MP built up a plant in California filled with giant vats, called settler-mixers, that gradually winnow out the most valuable rare earths needed in magnets. By 2023, it was the only U.S. company separating rare earths at commercial scale, allowing it to bypass Chinese refiners and start selling directly to buyers in the U.S., Japan and South Korea.
Despite the progress, the company struggled to stay consistently profitable.
Starting in 2022, a surplus in Chinese rare earths tanked global prices, part of a pattern of Chinese overproduction of critical minerals including nickel, lithium and cobalt that has forced out Western miners around the globe. As prices kept dropping, investors lost patience. MP's stock crumbled to a fifth of its previous highs.
Litinsky believed the company's strategic importance would at some point translate into financial results. But the company still needed to learn how to actually make magnets.
Since rare-earth magnets are hardly made in the U.S. anymore, many of the people with commercial experience are in their 60s and 70s.
MP scoured the world for technical talent. To lead the project, it hired Alan Lund, a metallurgist who had run a company developing high-performance metal alloys.
Lund was determined to find an anchor customer that would commit to a long-term sales contract. It turned out to be GM, which had analyzed its supply-chain vulnerabilities after Covid-induced shocks and wanted more options.
The next hurdle was finding production equipment for its Fort Worth factory. MP didn't want to buy in China, the main producer of machinery, afraid that Beijing could hold up shipments. That meant seeking out suppliers of tools such as jet mills and furnaces in North America and Europe.
The equipment was more expensive and sometimes required a nearly two-year lead time. But MP's decisions looked prescient in 2023, when China began expanding export controls to include magnet-production equipment.
MP also had to master the arcane engineering skills needed to make quality magnets, including grain boundary diffusion, or GBD [1]. That process is a way to apply the most expensive materials in a targeted way on the magnet, dramatically lowering the cost. China is good at it; few others are.
Long before breaking ground in Fort Worth, MP assembled a dedicated team to pore over scientific literature and crack the magnet code. Over several years, the company tested different formulations, eventually developing a heavy rare-earth composition that used GBD, and a customized method that gave magnets a consistent coating.
Now, the company is gearing up for commercial-scale magnet production.
Its goal to become a national rare-earths "champion" that can go toe-to-toe with China was turbocharged last week. Under its deal with the Pentagon, the Texas plant's magnet capacity will be tripled and MP will build a second, larger plant. To protect against price fluctuations, the government is setting a price floor for MP's rare-earth minerals and guaranteeing the purchase of MP's magnets. Because the Defense Department will likely only require a portion of the magnets, the rest can be sold to commercial customers.
To produce magnets for Apple, MP plans to also build a commercial-scale recycling line at the California mine. Apple said the companies will develop novel magnet materials and innovative technologies to enhance magnet performance.
But challenges remain. As MP scales up magnet production, it will need to acquire more heavy rare earths than are available at its California mine, which is no easy feat because there are few producers of those outside of China. Building and operating a massive new facility could also create new snags.
Some of its Western competitors say the government's decision to invest so heavily in a single company could drive promising startups out of the business, hurting U.S. competitiveness over the long term.
"It's the government picking winners and losers," said an executive at one rare-earth business, "and they seem to have made a big bet on one company."
Litinsky says a secure MP is good for the overall industry: "There's going to be a lot of growth opportunities." [2]
1. Grain boundary diffusion (GBD) is a process where a coating of a material, often a rare earth element, diffuses along the grain boundaries of a polycrystalline material, such as a sintered permanent magnet, during a heat treatment. Sintering is a process used to fuse powdered materials into a solid mass by heating them below their melting point, often with the application of pressure. Grain boundary diffusion is used to enhance the properties of the material, particularly its coercivity, by creating a layer rich in the diffusing element around the individual grains.
1. Material and Coating:
The process typically involves a polycrystalline material, like a sintered NdFeB magnet, where the grains are separated by grain boundaries.
A thin layer of a different material, often a heavy rare earth element (HREE) like Dysprosium (Dy) or Terbium (Tb), is applied to the surface of the material. This can be done through various methods like screen printing, PVD (Physical Vapor Deposition), or rotary coating.
2. Heat Treatment:
The coated material is then subjected to a high-temperature heat treatment.
The temperature and duration of the heat treatment are crucial for controlling the diffusion process.
3. Diffusion:
During the heat treatment, the atoms of the coating material diffuse along the grain boundaries into the bulk of the material.
This diffusion creates a layer rich in the coating material around each grain, forming a core-shell structure.
4. Enhancement of Properties:
The diffusion of HREEs along grain boundaries significantly increases the coercivity of the material.
This is because the HREE-rich layer helps to magnetically decouple the grains, making it harder for the magnetization to be reversed.
GBD can also reduce the overall amount of HREE needed in the magnet, as the diffusion process allows for a more efficient use of the element.
5. Applications:
GBD is widely used in the manufacturing of high-performance permanent magnets, particularly NdFeB magnets.
It is a key technology for improving the magnetic properties of magnets used in various applications, including electric motors, wind turbines, and other high-tech devices.
6. Potential drawbacks:
The GBD process is time-consuming and requires high temperatures, which can be a bottleneck in mass production.
The diffusion primarily occurs near the surface, so the coercivity enhancement may not be uniform throughout the entire magnet.
The expensive nature of HREEs also presents a challenge, although GBD can help reduce the amount needed.
2. A Rare-Earth Play to End China's Dominance --- Pentagon and Apple deals turbocharge MP Material's goal, but hurdles highlight challenge of reviving U.S. industry. Emont, Jon. Wall Street Journal, Eastern edition; New York, N.Y.. 16 July 2025: A1.
Komentarų nėra:
Rašyti komentarą