For decades, the global technology and manufacturing sectors have relied heavily on Chinese rare earth supplies. China currently controls more than 80% of the world’s rare earth refining capacity and supplies the vast majority of the world’s neodymium magnets. This concentration of supply poses significant strategic and economic risks, as disruptions—whether from trade disputes, export restrictions, or internal Chinese policy shifts—can ripple across global industries. The result is a fragile supply chain that leaves countries like the United States vulnerable to material shortages and price shocks. This dependence also has significant geopolitical implications. In times of rising international tensions, China has shown a willingness to leverage its dominance in rare earths as a strategic tool, imposing export quotas or restrictions that can hamper defense readiness and energy transitions in other nations. The situation highlights the importance of establishing resilient domestic supply chains that can withstand diplomatic rifts and economic coercion. Policymakers increasingly view rare earth independence not just as an economic goal, but as a national security imperative.
Enter Niron Magnetics
In a quiet industrial park in Minneapolis, Niron Magnetics, a venture-backed American startup, is pioneering a powerful new class of rare-earth-free magnets that could disrupt the global supply chain for super magnets. This alternative offers the same—if not better—performance than the neodymium-based magnets that currently dominate the market and are largely sourced from China.
At the heart of Niron Magnetics’ breakthrough is an iron-nitride compound called Clean Earth Magnet. Unlike traditional magnets that depend on rare earth elements like neodymium and dysprosium, Niron’s solution is composed of iron and nitrogen, both abundant and environmentally benign materials.
Rare earth magnets are essential to modern technologies, enabling everything from EV motors and MRI machines to fighter jets and industrial robotics. However, the mining and refinement of rare earths come with geopolitical tensions, human rights concerns, and significant environmental impacts. As countries scramble to decouple from China’s dominance in this sector, alternatives like Niron’s have become a national priority.
Institutional Support and Strategic Investment
Niron Magnetics has captured the attention—and wallets—of powerful industrial and governmental players. The U.S. Department of Energy (DOE) has backed the company with over $17.5 million in grants, followed by a $52.2 million tax credit under the Inflation Reduction Act’s Advanced Energy Project program. These incentives aim to support the domestic production of critical clean energy components.
In parallel, Niron secured $33 million from a consortium of major automakers and electronics firms, including General Motors (GM) Ventures, Stellantis, Samsung Ventures, Western Digital, and Volvo Cars Tech Fund. These strategic investments serve a dual purpose: they provide much-needed capital and hint at future commercial partnerships for magnet supply in EVs and other advanced systems.
Scaling Up Production in Minnesota
Currently, Niron operates a pilot plant in Minneapolis capable of producing small quantities of magnets—about five tons per year. To reach commercial viability, the company is building a larger manufacturing facility in Sartell, Minnesota. Scheduled to begin operations in 2025–26, the site is expected to generate up to 1,500 tons annually in its initial phase, with the capability to scale to over 10,000 tons. This expansion is projected to create more than 175 permanent jobs and inject $8.7 million in annual tax revenue into the local economy.
The Sartell project is backed by a combination of public incentives, including tax increment financing (TIF), free land, and infrastructure grants. State and federal officials view this as a strategic investment in reshoring advanced manufacturing and reducing dependence on foreign supply chains.
Technical Promise and Commercial Hurdles
While Niron’s iron-nitride magnets offer compelling advantages—including superior thermal stability and similar magnetic strength to neodymium magnets—commercialization at scale is
easier said than done. Producing magnets with the precision required for EV motors or aerospace systems is a complex, capital-intensive endeavor.
Some analysts note that while the magnets are promising, they may not yet match the highest-performing neodymium-iron-boron (NdFeB) magnets used in cutting-edge EV applications. However, Niron’s solution could be ideally suited for less demanding applications or serve as a stopgap for OEMs looking to diversify supply sources in their next generation of vehicles.
How Niron Stacks Up to the Competition
Niron is a privately held corporation whose main competition comes from two fronts: Chinese rare earth producers and North American players like MP Materials and Neo Performance Materials.
MP Materials is a publicly traded U.S. company operating the Mountain Pass mine in California. It recently began producing its own NdFeB magnets and generated over $60 million in quarterly revenue, though it reported a GAAP net loss due to high operational costs. MP Materials is betting on full vertical integration—from mining to magnet production—as its path to market dominance.
Neo Performance Materials, another public competitor, offers a diversified portfolio of rare-earth-based powders, alloys, and magnets. Though headquartered in Canada, the company has global operations and has recently scaled back its Chinese footprint. It reported over $100 million in quarterly revenue, with profitability returning after a recent dip.
In contrast, Niron’s advantage lies in its rare-earth-free approach. It avoids the geopolitical and price volatility associated with neodymium, and its technology has received recognition such as a TIME Best Inventions award. However, as a privately held company, it faces the typical hurdles of limited capital access and the need to prove its product at industrial scale.
Policy Tailwinds Could Tip the Scale
The U.S. government has shown increasing interest in fostering domestic alternatives to Chinese rare earths. The Rare Earth Magnet Manufacturing Production Tax Credit—still under legislative review—could offer up to $30 per kilogram in credits for domestically made magnets. If passed, it would significantly bolster the cost competitiveness of Niron’s magnets.
Additionally, rising tensions with China have led to new tariffs, export controls, and broader efforts to decouple supply chains for critical materials. These macroeconomic forces, combined with clean energy mandates, create a favorable environment for U.S.-based magnet manufacturers.
A Future Magnetized by Independence
The stakes are high. The global market for permanent magnets is expected to exceed $50 billion by 2030, driven by the surge in electrification, renewables, and automation. For the United States to remain competitive in these sectors, establishing a secure, scalable domestic magnet supply is essential.
Niron Magnetics represents a promising piece of that puzzle. With a cutting-edge technology, strong institutional backing, and a roadmap to industrial-scale production, it could play a pivotal role in reshaping how the world sources one of its most critical components. Though the path forward is fraught with technical and commercial hurdles, the magnetic pull toward independence has never been stronger.
Image by Bing AI.
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