When it comes to electric vehicle production, industrial usage, and the demand from consumers to have products that have stronger power to apply to metal, a profound opportunity is emerging that promises to reshape the global supply chain. Key to seizing this opportunity is re-shoring critical magnetic materials to the U.S., a move that is vital for the future of electric vehicles, drones, intelligent systems, making more and more products work in the CPG industry, and the electrification of smart technologies. By creating a vertically integrated magnet manufacturing industry in America, it’s possible to build and accelerate the next generation of mobility and defense technologies and strengthen the supply chain.

Can the U.S. begin to replace resources from China?

The discussion about tariff's is affecting every person's thinking and life right now.

How will tariff's increase inflation?

Where will the 25% be applied to?

Which product, industries, and will more jobs actually be created in the homeland?

Nowhere is China’s critical mineral dominance greater than in rare earth supply chains. In 2022, the US government estimated that China controlled nearly 60 percent of mined production, over 85 percent of processing capacity, and over 90 percent of permanent magnet production.

Firstly, to begin to shift control over such precious materials and make change, there is a large sequence of events that need to happen. Bringing rare earth magnet manufacturing back to American soil is essential to transforming the supply chain. Rare earths serve as fundamental building blocks of the modern economy, enabling trillions of dollars in global GDP via a wide range of clean energy, information technology, defense, and industrial applications. According to the new market research report “Rare-Earth Metals Market – Global Forecast to 2026, published by MarketsandMarkets™, the rare earth market is expected to grow to $9.6 billion USD by 2026. Beyond the economic benefits, re-shoring this industry will also re-shore jobs, strengthen national security and capture a portion of the global magnetics market China is currently dominating.

But wait, there's more to it.

As China dominates the production of rare earths, the United States does produce rare earths at MP Materials’ Mountain Pass mine in California, these rare earths are mostly "light rare earths" such as the neodymium and praseodymium used for permanent magnets. China controls 100% of the global production of heavy rare earths, like dysprosium and terbium, which are both more scarce and often deemed more important than light rare earths given their advanced applications, such as use in laser crystals.

Technology for rare earths is another category in which China leads. From 1950 to October 2018, China filed 25,911 rare earth patents, while the United States filed only 9,810.

What's next? What can be done?

MP Materials, a leader in the mining and creation of rare earth metals, is working to close the economic and national security gap related to rare earth materials. In 2022, they commenced the construction of a first-of-its-kind rare earth magnetics factory, which set the stage for building a fully domestic U.S. supply chain. The company’s large-scale rare-earth element mine is in southeastern California. It is the only integrated rare mining and processing facility of its kind in the Western Hemisphere.

The journey to reshaping the industry has begun by re-shoring rare earth magnets. As the ball begins to start rolling for the US to release itself from the dominance of China produced materials, we are not only creating economic opportunities but also strengthening national security and ensuring a sustainable future for smart technologies, intelligent transportation, and more remarkable consumer products for home, the office or leisure.

Master Magnetics has a very optimistic outlook on the the future of the industry it serves, and we look forward to being a strategic part of how that innovation plays out in North America and be a partner to many who share the same vision.

Sources: Alliance Texas MIZ, Wilson Center, News Security Beat, ECSP Weekly, Rare Earth Supply Technology & Resources Transformation Act.