Funds were issued following a competitive, oversubscribed process administered by the Department of Energy. Credit: RHJPhtotos via Shutterstock.com.

US-based company MP Materials has secured a $58.5m award from the US Internal Revenue Service and Treasury to support the construction of the country’s first fully-integrated rare earth magnet manufacturing facility.

The Section 48C Advanced Energy Project tax credit allocation is expected to bolster domestic production of critical components for various high-tech applications.

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Funds were issued following a competitive, oversubscribed process administered by the Department of Energy, which evaluated the technical and commercial viability and environmental and community impact of approximately 250 projects.

Neodymium-iron-boron (NdFeB) magnets are essential in manufacturing electric motors and generators for a wide range of industries, including automotive, renewable energy and defence.

The demand for these magnets is closely tied to the growth of electric vehicles (EVs) and sustainable energy solutions.

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Construction of the facility in Fort Worth, Texas, began in April 2022, with MP Materials already producing magnet precursor materials at a pilot facility in North America.

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The company anticipates the start of commercial precursor material production in Fort Worth this summer, with the aim of manufacturing finished magnets by late 2025.

MP Materials’ foundational customer, General Motors, will be the primary recipient of the finished products, which will support the automaker’s EV production in North America.

This partnership underscores the strategic alignment between raw material suppliers and end users in the rapidly evolving EV sector.

The company said in a statement: “MP will source the factory’s raw material inputs from Mountain Pass, California, where MP owns and operates America’s only scaled and operational rare earth mine and separations facility.

“At the factory, NdPr [neodymium-praseodymium] oxide produced at Mountain Pass will be reduced to NdPr metal and converted to NdFeB alloy and finished magnets, delivering an end-to-end supply chain with integrated recycling and world-class sustainability.”