When MP Materials broke ground on April 13 on a 200,000-square-foot magnet manufacturing facility, bringing 150 high-skill jobs to the area, it was more than just a win in the economic development column for Fort Worth.
The plant is also a step in restoring the domestic supply chain for rare earth magnetics, a key component for electric vehicles, wind turbines and other parts of modern life. Many see restoring the supply chain as a national security issue.
“We must have energy independence with U.S. made renewables,” said Ross Perot Jr., chairman of Hillwood and the Perot Group, who worked with the city of Fort Worth and MP Materials to bring the magnet facility to the AllianceTexas development. “If not, we’re going to put our whole nation at risk, and right most renewables and the batteries are coming from China.”
China dominates the global supply chain for rare earth metals and magnets, having 58% of rare earth mining and 92% magnet manufacturing in 2020, According to a Department of Energy study.
Only one rare earth mine operates in the U.S., and it is owned by MP Materials which purchased it out of bankruptcy in 2015.
“Many people believed that it just couldn’t be economic. We couldn’t compete against China,” said James Litinsky, founder, chairman and chief executive officer of Las Vegas-based MP Materials during the groundbreaking. “We had a different view, and we literally had to fight for two years just to fight for the right to bring this supply chain home.”
Rob Gorham, executive director of manufacturing initiatives and the SecureAmerica Institute at Texas A&M University, said the recent supply chain issues caused by the pandemic shined a light on the importance of keeping manufacturing of critical components in the U.S.
“When you say national security, for me, I’m not talking about making weapons of war. I’m also talking about the economics that make our nation secure as a country,” said “That’s why this announcement by MP Materials was important to me.”
Gorham points to the White House Executive Order 14017 issued in February of this year that ordered a review of vulnerabilities in U.S. supplies of critical technologies, metals and pharmaceuticals.
“The more that we can continue to onshore, close shore, re-shore, then the more that we can actually start taking back control of some of these key areas of manufacturing,” he said.
Litinsky is proud to make magnets in America and Perot noted that the new plant is located at the intersection of Independence Parkway and Liberty Way, he said.
“The rare earth magnet was discovered in the Air Force—we had that leadership here in the United States of America,” Litinsky said. “In the decades since then we lost that.”
MP Materials said it will produce 1,000 metric tons of magnets per year which is just 1% of the world’s production. But that is still enough to power half a million EV motors, according to company officials.
The market for rare earth magnets is expected to grow from $34.4 billion in 2021 to $54.1 billion by 2026, driven largely by increased production of EVs, as the world looks to reduce dependency on fossil fuels and rely more on electric power.
The new plant will be a catalyst for more opportunities for the city, Fort Worth Mayor Mattie Parker said.
“In thinking about the future of Hillwood and Fort Worth and the Mobility Innovation Zone, this was a missing piece, understanding rare earth manufacturing, advanced manufacturing for magnets, ultimately, the EV batteries,” she said.
To secure the manufacturing plant and the division headquarters, the city approved a seven-year agreement on up to 60% of the incremental value of real and business personal property taxes.
To receive the tax abatement, the company is required to spend a minimum of $40 million in total construction costs by the end of 2023 and spend $60 million in business personal property. Fifteen percent of construction costs are required to be with contractors that are minority and women business enterprises.
The company will also be required to create 30 new full-time jobs by the end of 2023 with an average annual wage of $80,390. Tax revenue to the city over the seven years of the agreement is expected to be $1.8 million.
The new plant is expected to create about 150 permanent high-skill jobs and about 1,300 indirect jobs, the company says. Production is expected to begin in 2023. The facility will also serve as the business and engineering headquarters for its growing magnetics division, MP Magnetics officials said.
MP Materials is investing about $700 million over the next two years in the mine and new plant, according to the company.
Litinsky believes demand will be high for the products. “Magnets are synonymous with modern life,” Litinsky said. “Rare earth magnets are really what will power motion — electric vehicles, wind turbines, drones, robots, air taxis, whatever in the near term.”
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