New legislation would incentivize the domestic production of neodymium iron boron (NdFeB) rare earth permanent magnets used in electric vehicles, renewable energy, and the defense industrial base
August 10, 2021
USA Rare Earth LLC, the operator and owner of 80% of the Round Top (“Round Top”) Heavy Rare Earth, Lithium and Critical Minerals Project in Hudspeth County, Texas, together with its joint venture partner Texas Mineral Resources Corp (OTCQB: TMRC), is pleased to release the following statement by Pini Althaus, Chief Executive Officer of USA Rare Earth, in response to the introduction of the Rare Earth Magnet Manufacturing Production Tax Credit Act of 2021 by U.S. Representatives Eric Swalwell (D-CA) and Guy Reschenthaler (R-PA), co-chairs of the Congressional Critical Materials Caucus:
"USA Rare Earth applauds the introduction of the Rare Earth Magnet Manufacturing Production Tax Credit Act and efforts by Congress to restore this critical U.S. production capability,” said Pini Althaus, CEO of USA Rare Earth, “These incentives would be a boost to U.S. manufacturers and would help establish a beachhead for NdFeB magnet production in the U.S. The legislation also reflects the urgent demand by automakers for the rare earth magnets necessary to transition to zero-emission vehicles by 2030, and it underscores the importance of the parallel requirements for the U.S. defense industrial base.”
Mr. Althaus continued, “This bill would spur domestic manufacturing and reward innovation, and it would help reshore a vital U.S. supply chain with potential for international collaboration. Led by the chairs of the Congressional Critical Materials Caucus, the bill dovetails with the whole-of-government approach underway to swiftly secure U.S. supply chains and to restore NdFeB magnet manufacturing in the United States. This is a critical next step following the Executive Order on America’s Supply Chains, the White House 100-day supply
chain review, and ambitious new targets for electric vehicles. Congress has the opportunity to scale, strengthen and secure the supply chain for rare earth permanent magnets as it makes sweeping investments in America’s infrastructure and transportation.”
Currently, the U.S. lacks a commercial-scale capability to process rare earth permanent magnets used in the automotive, aerospace, defense and electronics industries. According to a June 2021 White House report on supply chains, the U.S. has lost four neodymium iron boron (NdFeB) production facilities since 1992.
In April 2020, USA Rare Earth acquired the NdFeB permanent magnet manufacturing system formerly owned and operated by Hitachi Metals in North Carolina. The plant has been idle since 2015 and is the only commercial-scale system of its kind in the United States. USA Rare Earth is preparing to recommission the system for production during 2022.
Once operational, USA Rare Earth’s NdFeB magnet plant will produce at least 2,000 tonnes annually of rare earth magnets, accounting for approximately 17% of the (2019) U.S. permanent magnet demand. At present, no other NdFeB permanent magnet manufacturing plant is operational in the United States.