America Doesn't Just Have a Rare Earth Problem. It Has a Magnet Manufacturing Problem. AML Just Explained Why

Highlights

• Advanced Magnet Lab supports the Magnets Value Chain Support Act but warns its weight-based credit structure rewards bulk output over high-complexity precision manufacturing.
• A flat per-kilogram incentive treats large industrial magnets and miniature defense-grade components equally, despite vastly different manufacturing difficulty and strategic importance.
• AML urges Congress to reward component-level value creation, promote near-net-shape manufacturing to conserve critical dysprosium and terbium, and recognize precision defense magnets as a distinct strategic capability.
• Without fixing the downstream manufacturing gap, the U.S. risks subsidizing magnet blocks while remaining dependent on foreign suppliers for the finished components that power defense systems and advanced technologies.

---

Florida-based Advanced Magnet Lab (opens in a new tab) (AML), a U.S. permanent magnet manufacturer, has submitted comments to Congress supporting the Magnets Value Chain Support Act of 2026 (opens in a new tab) while warning that the legislation, as currently drafted, risks rebuilding only the easiest portion of America's permanent magnet industry. AML argues that a production credit based solely on magnet weight overlooks the most technologically demanding—and strategically valuable—part of the value chain: machining, finishing, coating, magnetizing, and qualifying precision magnets for defense, robotics, drones, electric motors, and advanced manufacturing. Rare Earth Exchanges® assessment: This is among the most technically substantive policy submissions yet offered on rebuilding America's rare earth magnet supply chain.

AML CEO Wade Senti (opens in a new tab) appeared on the Rare Earth Exchanges (REEx) podcast (opens in a new tab) in late 2025.

Washington Keeps Talking About Rare Earths. AML Is Talking About Manufacturing

America has spent years debating mines, and finally, increasingly, separation plants and rare earth oxides. Meanwhile, China spent decades building the manufacturing capabilities that transform those materials into finished permanent magnets—the products that actually power electric motors, guided weapons, industrial robots, electric vehicles, and countless other strategic technologies.

AML's letter reminds policymakers of a reality that is often overlooked: a sintered NdFeB magnet block is not a finished component. Before entering an electric motor or defense system, it must be machined, coated, magnetized, inspected, and qualified—steps requiring specialized equipment, skilled labor, and production know-how that the United States has largely ceded over the past three decades.

A Weight-Based Credit May Reward the Wrong Outcome

AML supports the legislation's objectives. Its concern is narrower—and more consequential.

The company argues that rewarding production solely on a per-kilogram basis risks incentivizing bulk output while undervaluing the most difficult manufacturing work.

A kilogram of large industrial magnets may require relatively little finishing. A kilogram of miniature magnets for drones, guided munitions, or precision actuators may represent hundreds of individual parts requiring extensive machining, coatings, magnetization, inspection, and qualification. Yet under a flat weight-based incentive, both would receive the same credit despite vastly different manufacturing complexity and strategic importance. That is not a plea for preferential treatment. It is an argument that industrial policy should reward value added, not simply weight produced.

The Real Chokepoint Is Still Downstream

Rare Earth Exchanges has argued since our formal launch in January 2026 that America's strategic vulnerability extends well beyond mining and separation. The greatest bottleneck increasingly lies in downstream manufacturing—the engineering-intensive processes that convert magnet blocks into precision components ready for commercial and defense applications.

AML's recommendations follow that logic: reward component-level value creation, encourage near-net-shape manufacturing that conserves scarce dysprosium and terbium, and recognize small precision defense magnets as a distinct strategic manufacturing capability. If Congress gets this wrong, America could successfully subsidize magnet blocks while remaining dependent on foreign manufacturers for the finished components that matter most. That would not rebuild the magnet value chain.

It would rebuild only its heaviest—and easiest—links.

Register today: REEx Marketplace™ (opens in a new tab)