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America’s Rare Earth Magnet Comeback – A Steep Climb Against China’s Dominance

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Highlights

  • MP Materials begins domestic neodymium-iron-boron magnet manufacturing in Fort Worth with an initial 1,000 tonnes annual capacity.
  • U.S. efforts to rebuild rare earth magnet production remain marginal against China’s overwhelming 97% market control of rare earth metal refining.
  • Restoring America’s rare earth magnet supply chain requires long-term industrial policy and substantial investment to compete with China’s subsidized production.

In a significant but underreported development, MP Materials has begun manufacturing neodymium-iron-boron (NdFeB) magnets in the United States, marking a rare resurgence of domestic rare earth magnet production. This move, alongside other U.S. projects like e-VAC Magnetics (opens in a new tab) in South Carolina and Noveon Magnetics (opens in a new tab) in Texas, represents a small but determined effort to rebuild an industry long dominated by China.  MP Materials’ (opens in a new tab) Fort Worth facility, with an initial annual capacity of 1,000 tonnes (scaling up to 3,000 tonnes), aims to supply General Motors and other U.S. manufacturers, signaling a step toward reshoring critical supply chains. That’s according to Matt Sloustcher (opens in a new tab), a spokesperson.  However, with China producing at least 85%—and possibly 90%—of the world’s neodymium magnets, America’s reentry remains marginal at best.

A Long Mountain to Climb

Despite the enthusiasm, the scale of these U.S. efforts barely dents China’s market supremacy. The global NdFeB magnet market was between 220,000 and 240,000 tonnes in 2024, with China controlling not just magnet production but also 97% of rare earth metal refining, a crucial upstream process. Even if the U.S. magnet plants meet domestic demand of 7,000 tonnes annually, they remain heavily reliant on Chinese-sourced rare earth materials, reports Glen Zorpette, writing for IEEE Spectrum (opens in a new tab).

MP Materials stands out by pursuing a rare mine-to-magnet strategy, extracting ore, refining oxides, and producing magnets in-house—something few firms, even in China, attempt. This vertical integration may offer market insights and some insulation from supply chain vulnerabilities, but it does little to counter China’s sheer production scale and cost advantages.

The Chinese Rare Earth Complex

China’s dominance is further reinforced by state-backed subsidies, artificially low prices, and relentless capacity expansion. Even as Chinese producers operate at only 60% of capacity, they are set to increase production to 500,000 tonnes by year’s end—far exceeding global demand, according to John Omerod (opens in a new tab), an industry consultant.

This oversupply will likely push prices even lower, making it difficult for American manufacturers to compete. While the U.S. Department of Defense mandates that military systems use magnets produced entirely in “friendly” countries, sustaining domestic production will require subsidies or a willingness to pay a premium. The question remains: will private sector players, especially cost-sensitive automakers like General Motors, tolerate higher prices for U.S.-made magnets when cheaper Chinese alternatives remain accessible via third-country transshipment workarounds?

A State Plan vs. Free Market—Fair?

For all the optimism about restoring America’s rare earth magnet supply chain, economic realities present a sobering challenge. Tariffs, strategic partnerships, and government contracts may offer short-term relief. Still, U.S. manufacturers remain at the mercy of China’s pricing power without long-term industrial policy and aggressive investment in upstream refining. The current wave of magnet manufacturing is a start, but whether it becomes a sustainable industry or a symbolic gesture depends on how far the U.S. government and private sector are willing to go to break China’s grip on this critical market.

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