In a bold move challenging China’s dominant position in the key mineral sector, the American company “Niron Magnetics” (hereinafter referred to as Niron) is launching an initiative to produce permanent magnets without rare earth elements. For over half a century, rare earth elements have been a critical component in magnet manufacturing. However, Niron’s technology utilizes two abundant non-rare earth elements to create permanent magnets. If successful, Niron will become the first global company capable of producing magnets without relying on rare earth elements, potentially reshaping future technology.
According to reports from the Financial Times, Niron is constructing a factory with a capacity of 1500 tons in Sartell, Minnesota, which is said to meet 3% of the magnet demand in the United States. The technology of Niron relies on the research of co-founder and University of Minnesota professor Jian-Ping Wang, who discovered the magnetism of iron nitride. Iron nitride is a compound of iron and nitrogen, the two most abundant elements in the Earth’s crust and atmosphere. It is claimed that the magnetic properties of this new compound are 18% higher than other magnetic compounds.
“At Niron Magnetics, we produce the world’s only high-performance permanent magnet without rare earth elements,” the company stated on its website. “Zero rare earth elements, zero key minerals. Our magnet materials are globally abundant and 100% sourced from the United States, ensuring a secure, permanent supply chain.”
Niron has received strong support from the U.S. government. In January of this year, the company was granted a tax offset of $52.2 million from the Department of Energy and Department of Treasury, and in 2022, a research and development organization under the Department of Energy provided an additional tax offset of $17.5 million. The factory is set to begin operations in early 2027.
“Every modern device in the world relies on permanent magnets,” said Mark Champine, head of the North American Technical Center of Stellantis, an automotive manufacturer investing in Niron. “Niron is meeting this urgent demand.”
However, the feasibility of this technology to replace rare earth magnets still requires observation. Milo McBride, a researcher at the Carnegie Endowment for International Peace’s Sustainability, Climate, and Geopolitics Program, stated that while Niron’s move towards commercialization is a “positive signal,” the ultimate application of its products remains uncertain.
“The magnet market covers various fields from consumer electronics to military hardware,” he said. “Smaller end-user markets might adopt it first, but given the significant shortage in the U.S. magnet supply, there is no reason not to attempt it.”
The acquisition of rare earths has been at the core of the U.S.-China trade war. Due to the Chinese government’s support for the rare earth industry over the years, China holds about 70% of global rare earth mineral reserves and 90% of rare earth refining capacity worldwide.
According to a memorandum from the U.S. Department of Commerce’s Bureau of Industry and Security, China produces 90% of the world’s permanent magnets.
About a decade ago, a dispute between China and Japan led to China cutting off exports of permanent magnets, causing a chain reaction globally.
In April of this year, as the U.S.-China trade war reached its peak, Beijing began restricting exports of rare earth metals and related products. American and global automotive, electronic, and defense companies found it challenging to secure supplies of rare earth products. Despite allowing some rare earth magnet exports post-trade negotiations, China continued to restrict exports to defense companies. This prompted the U.S. government to take swift action to break China’s monopoly in the rare earth market and promote the development of domestic rare earth industries to reduce dependency on China.
In an agreement announced on July 10th, the Pentagon agreed to purchase $400 million in preferred shares of the MP Materials company, becoming the largest shareholder with a 15% stake in the company.
MP Materials owns the Mountain Pass rare earth mine in California, the only operational rare earth mine in the United States. The investment from the Pentagon is said to help expand MP’s rare earth processing capacity and magnet production.
Similarly supported by the U.S. government, Niron stated that the company is “reshaping American manufacturing. We recognize the challenges posed by rare earth dependence and have taken a completely different approach, redefining the magnet manufacturing process. Our groundbreaking iron nitride technology was born at the University of Minnesota, developed and produced locally in Minnesota.”
“We have created a safer, more sustainable supply chain and developed materials that can drive innovation in magnet equipment,” Niron said.
Looking ahead, Niron is poised to play a significant role in the clean energy transition. Permanent magnets are widely used in applications such as wind turbines and electric vehicle engines, with demand expected to surpass supply in the coming decades.