U.S. Invests $50M in Vulcan Elements to Build Domestic Rare-Earth Magnet Supply

The U.S. government has finalized a deal with North Carolina–based startup Vulcan Elements, a producer of high-performance neodymium-iron-boron (NdFeB) rare-earth magnets. Under the agreement, the government will provide about $50 million in incentives and take an equity stake in the company to help finance equipment for building domestic magnet production capacity.

The initiative forms part of a broader $1.4 billion investment package aimed at reducing U.S. reliance on China for critical materials used in electric vehicles, wind turbines, smartphones, and defense systems.

NdFeB magnets are essential in advanced electronics and defense applications as they enable lighter and more efficient designs for motors, actuators, and radar systems. Each U.S. F-35 fighter jet, for instance, contains hundreds of pounds of NdFeB rare-earth magnets.

China remains the dominant global supplier, accounting for around 85–90% of worldwide NdFeB magnet output. In 2023, Chinese production reached roughly 240,000 tons, up 14% year-on-year. By comparison, Japan’s output is only about one-tenth of China’s, while the U.S. currently has virtually no large-scale NdFeB magnet manufacturing, relying almost entirely on imports.

The partnership with Vulcan Elements is expected to boost domestic production, strengthen national security, and create new jobs. However, the initiative also faces challenges, as magnet manufacturing is highly capital-intensive, and the government’s direct equity stake raises questions about long-term market involvement and oversight.

The partnership with Vulcan could mark a major step toward rebuilding a U.S. supply chain for rare-earth magnets driving the next generation of energy and defense innovation.