MP Materials awarded $58.5 million tax credit for Texas rare earth magnet factory

The award is part of the historic $4 billion in tax credits (also known as Section 48C) announced last week by the US Department of Energy (DOE), the US Department of Treasury, and the Internal Revenue Service (IRS).

The Section 48C program is designed to accelerate domestic clean energy manufacturing and reduce greenhouse gas emissions at industrial facilities, with funds being earmarked for over 100 projects across 35 states.

Issuance of the tax credits, according to MP Materials, followed a “competitive, oversubscribed process” administered by the DOE that evaluated the technical and commercial viability and environmental and community impact of approximately 250 projects.

MP Materials first began construction of its manufacturing site in Fort Worth, Texas, in April 2022. The facility was a substantial component of a $700 million investment the company had designated to fully restore the US rare earth magnetics supply chain.

Las Vegas-based MP currently produces magnet precursor materials in a North American pilot facility. It now expects to commence commercial production of precursor materials in Fort Worth this summer and finished magnets by late 2025.

These products will be supplied to General Motors, a foundational customer of MP Materials with whom it has signed a definitive supply agreement, to support the production of electric vehicles in North America. In addition to EVs, NdFeB (neodymium-iron-boron) magnets are critical inputs to robots, wind turbines, drones, defense systems, and many other high-growth technologies.

At the time of announcing its construction, MP said the manufacturing facility would have the capacity to produce approximately 1,000 tonnes of NdFeB magnets per year, supporting the production of approximately 500,000 EV traction motors, with room to scale.

MP will source the factory’s raw material inputs from Mountain Pass, California, where it owns and operates America’s only scaled and operational rare earth mine and separations facility. About 15% of the rare earth content consumed annually is produced there.

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, the company said.

Shares of MP Materials rose 2.9% to $14.72 by 11:15 a.m. EDT on the tax credit announcement. The company has a market capitalization of $2.6 billion.