General Motors Secures Two Deals to Bolster US Rare Earth Magnet Production

General Motors (GM) has locked in a domestic source of rare earth minerals, alloys, and finished magnets for its upcoming line of electric vehicles, including the GMC Hummer EC, Cadillac Lyriq, and Chevrolet Silverado EV, through two partnerships with MP Materials and with Germany's Vacuumschmelze (VAC). This will allow them to build two new facilities in the US to enhance domestic production of rare earth magnet production.

GM has spent the past year securing a domestic supply chain for the millions of electric vehicles it plans to produce by the end of the decade, from cell manufacturing and cathode active materials to lithium and even recycling that turns scrap into raw materials.

Magnets are a key component of electric motors, and General Motors will need a lot of them. The automaker plans to introduce 30 new electric vehicles to the global market by 2025 and transition to an all-zero-emissions portfolio by 2035. The GMC Hummer alone could have as many as three motors with up to 11,500 pound-feet of torque.

Under the partnership with VAC, GM and the German company will build a plant in the United States to produce permanent magnets for electric motors. The agreement with VAC is not yet binding. GM executives said in a telephone briefing Thursday that the two companies are expected to finalize the final agreement in early 2022. The plant is expected to begin production in 2024. The location of the plant will be announced at a later date, the companies said.

The agreement with MP Materials is more of a mine-to-magnet partnership. Rare earth materials will be mined and processed at MP Materials' mine in California, then converted into metals and magnets at a new 200,000-square-foot facility in Fort Worth, Texas. According to MP, recycling will take place at both locations.

The new facility will be used to produce neodymium-iron-boron alloys and magnets, potentially powering about 500,000 electric vehicle motors per year, the companies said. A gradual expansion of production is expected to begin in 2023.

The deal is a highly significant one for MP Materials, which owns and operates the only active, sizable rare earths production site in the United States. The Mountain Pass plant, once the world's largest producer of rare earths, has changed hands several times over the past few decades. In 2008, Chevron sold it to a company called Molycorp. The company intended to restart and even expand the mine, but was eventually forced into bankruptcy.

MP Materials acquired Mountain Pass in July 2017. according to MP, the site was not operating and only eight employees remained to care for and maintain it. MP has since restarted operations and by 2020, the Mountain Pass site produced more than 38,500 metric tons of rare earth concentrates, representing more than 15% of global production according to the U.S. Geological Survey.

It is also a milestone for advocates of rare earth production in the United States. Rare earth materials can be found all over the world and were once mined in the United States. But by 2003, companies stopped mining rare earths, choosing instead to buy them from China. Today, almost all mining is done in China. The development of permanent magnets for electric motors began in the United States, but today the major producers are in China, Brazil, and India. China has about 90% of the rare earth magnet production capacity.

In their joint announcement, GM and MP Materials said the Fort Worth facility will be used to supply neodymium alloy sheets to other magnet manufacturers to help develop a diverse and resilient magnet supply chain in the US MP Materials said the Fort Worth facility will consume less than 10 percent of the 6,075 tons of neodymium oxide it expects to produce annually at Mountain Pass.

General Motors announced in October another non-binding agreement with GE Renewables, the clean energy arm of General Electric, to collaborate on the supply of rare earth materials and find ways to improve the supply of magnets, copper, and electrical steel. The two companies announced at the time that they also intended to explore new supply chains for copper and "electrical steel," a material made up in part of recycled materials that will be used in automotive traction motors and renewable energy generation.

The deal still appears to be moving forward. A GM spokeswoman said in an email, "The partnership is an important part of building a strong, resilient and scalable North American-focused EV supply chain. We are still in the process of finalizing a definitive agreement."

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