New magnet facility breaks ground in Texas to offset supply chain issues, reduce dependence on China

By Bethany Blankley | The Center Square

Instead of relying on China to source and manufacture the materials needed for a range of products including electric vehicles, drones, and wind turbines, U.S. companies like Las Vegas-based MP Materials and AllianceTexas are creating a U.S.-based alternative.

MP Materials broke ground on its first rare earth metal, alloy, and magnet manufacturing facility in Fort Worth, Texas, Thursday. It is the first-of-its-kind facility to be built in Texas, and in the U.S.

“Bringing magnetics capabilities home is transformational for MP Materials and America’s supply chains,” James Litinsky, chairman and CEO of MP Materials, said. His company “is leading the restoration of the full supply chain and the revitalization of the American manufacturing spirit in our sector.”

MP Materials is the largest producer of rare earth materials in the Western Hemisphere. It owns and operates the Mountain Pass Rare Earth Mine and Processing Facility in California, the only active and scaled rare earth production site in North America.

The majority of mining for rare earth materials and 92% of global magnet production occurs in China, the U.S. Department of Energy reports.

Separated rare earth elements are critical components necessary to produce the most powerful and efficient magnets used in electric vehicles, drones, defense systems, wind turbines, and other advanced technologies. MP Materials is developing U.S. metal, alloy, and magnet manufacturing capacity to build them domestically as an alternative to U.S. dependence on China and other countries, it announced in a statement.

The company’s invested $700 million to fully restore the U.S. rare earth magnetics supply chain in two years, it says, with the new Fort Worth facility playing a major role.

The new facility, being built in Hillwood’s 27,000-acre, mixed-use development, will create an estimated 150 high-skilled jobs and 1,300 indirect jobs once operational in 2023.

“We must have energy independence with US-Made renewable. If not, we’re going to put our whole nation at risk,” Ross Perot Jr., chairman of Hillwood and The Perot Group, said at the event.

“Securing and developing rare earth materials is one of the most important national security issues of our day, and we’re proud that AllianceTexas can partner with MP Materials to play a key role in America’s ability to power its future,” Perot said in a statement, adding, that MP Materials “was reshoring important next-generation manufacturing jobs to America.”

Under a definitive and binding supply agreement announced last December, MP Materials will supply U.S.-sourced and manufactured rare earth materials, alloy, and finished magnets to General Motors for it to use to build a range of electric vehicles. The new Fort Worth facility will be able to produce approximately 1,000 tonnes of neodymium-iron-boron magnets a year. This represents only 1% of the world’s supply but it’s enough to support the production of approximately 500,000 EV traction motors, with room to scale, MP Materials says.

The new magnetics facility “will play a key role in GM’s journey to build a secure, scalable, and sustainable EV supply chain,” Anirvan Coomer, an executive director at GM, said in a statement. Materials from the magnetics facility will be used by GM to build its GMC HUMMER EV, Cadillac LYRIQ, Chevrolet Silverado EV, and more than a dozen models using GM’s Ultium platform, Coomer says.

Last July, U.S. Defense Department representatives visited the Mountain Pass production facility to determine how MP Materials could develop domestic-sourced critical minerals for defense and commercial manufacturing. By February, the Defense Department awarded the company $35 million to refine and separate heavy rare earth elements at its California facility.

The refined feedstock from Mountain Pass will be transformed into finished products in Texas in order to deliver an American-based end-to-end supply chain. Starting in California with mining, the refining and production of metal, alloy, and magnet manufacturing. Recycling would be completed in Texas, MP Materials said.

Gov. Greg Abbott, who didn’t attend the groundbreaking, said in a statement that the new facility “will also bolster the state’s supply chain in high-tech industries while solidifying Texas as a mecca for advanced manufacturing and innovation. It’s thanks to industry innovators like MP Materials that ‘Made in Texas’ continues to be the most powerful global brand.”

U.S. Sen. Ted Cruz, R-Texas, who also didn’t attend the groundbreaking, said, “The United States needs to do everything we can to end our dangerous dependence on China for rare earth elements and critical minerals across the entire supply chain. It is both significant and important that MP Materials is going beyond mining and into alloying and manufacturing, and I’m deeply proud of the role Texas is playing in these projects.”

Since February, the Department of Defense has spent more than $100 million on projects to expand domestic rare earth element processing capabilities and develop rare earth supply chain resiliency, it says.