MP Materials is building a new permanent magnet factory in Alliance, part of greater Fort Worth, Texas. This is part of a $700 million investment to re-shore a critical but often overlooked part of the electric vehicle (EV) supply chain – the manufacture of rare-earth permanent magnets. China is the dominant supplier globally controlling 87% of the global permanent magnet market, and thanks to its control of most of the world’s rare-earth production it is also the low cost producer. Yet MP Materials is building a fully domestic U.S. supply chain in the face of these challenges. There are six parts of its strategy that warrant a closer look, as they could serve as a model for others who are trying to re-shore the production of strategically important products.
1. Vertically integrate and control the inputs
Much of the concern around the security of EV supply chains has centered on lithium, the key metal ingredient of high-capacity batteries. Permanent magnets have gotten less attention, but they deserve a closer look. They play a critical role in compact and efficient motors like those required for EVs, the generators used in wind turbines, and a vast array of products ranging from computer disk drives to the motors used ubiquitously in just about anything that turns electricity into motion. This makes permanent magnets a critical component in most aerospace and defense systems as well. The Pentagon recently halted deliveries of Lockheed Martin F-35 Lighting II multirole combat aircraft (also assembled in Fort Worth) because the Honeywell-made turbomachine (part of the starter generator assembly) had magnet materials coming from China. The most powerful permanent magnets are made from an alloy of neodymium (Nd), iron (Fe), and Boron (B) in the form Nd2Fe14B. For those of you who aren’t chemists, this means two parts of the rare-earth element neodymium, 14 parts iron, and one part boron. As discussed earlier, rare-earths are a family of elements that most people have never heard of, yet they play critical roles in many modern technologies. Neodymium magnets are manufactured with either a sintering process, or a bonding process. General Motors
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