North Texas may soon be the country’s manufacturing center for rare earth magnets that are essential components in a range of products from vehicles to drones to aerospace and defense systems, such as the Fort Worth-built F-35.
Officials from MP Materials, the company that in 2023 opened the only large-scale U.S.-based rare earth magnet facility in Fort Worth, said they are “strongly considering” a site in Northlake for a $1.2 billion next-generation manufacturing plant that will significantly increase production.
“Northlake is among the finalist communities being considered for this long-term strategic investment,” said Matt Sloustcher, vice president of corporate affairs for Las Vegas-based MP Materials.
Northlake, located about 30 miles north of Fort Worth, will consider a tax abatement agreement for an entity associated with MP Materials during a City Council meeting on Jan. 22. Though no amount is listed on the current agenda, it does stipulate that the tax abatement is contingent upon the approval of economic incentives from the state.
In October, Ross Perot Jr. said that he and area officials are working to secure MP Materials’ second plant for the North Texas area, noting that Gov. Greg Abbott has been involved in the effort.
“We’re working hard on it,” he said during a meeting at the Greater Irving-Los Colinas Chamber of Commerce. “It’s a big competition, but I think, since they’re already here, I hope that gives us a bit of a benefit.”
If MP Materials selects the Northlake location, the plant would be located on about 100 acres north of Victory Circle and Dale Earnhardt Way, between FM 156 and Interstate 35W. The land is owned by a company associated with Perot and Hillwood, the developers of AllianceTexas.
For decades, the U.S. relied almost entirely on foreign sources for these critical rare earth components. In recent years, federal officials became concerned that the primary source of those materials critical for U.S. defense, aerospace and electronics was China.
MP Materials leaders purchased a rare earth minerals mine in California and then opened the Fort Worth manufacturing plant with a commitment from General Motors to purchase its magnets, primarily for use in the auto giant’s electric vehicles.
In 2022, the Department of Defense awarded MP Materials a $35 million contract to refine and separate heavy rare earth elements at the company’s rare earth materials production facility.
Investments
Interest in the company increased in July when the Department of Defense invested $400 million in the company to shore up the country’s domestic supply of rare earth minerals and magnets, making the federal government the company’s largest shareholder.
James Litinsky, CEO of MP Materials, left, speaks with Mike Berry, president of Hillwood, at the Fort Worth Economic Development Partnership annual meeting on Oct. 30. (Fort Worth Report | Bob Francis)
That same month, computer giant Apple made a $500 million commitment to purchase materials from the company and plans to work with MP Materials to increase recycling.
The company’s opening of the Fort Worth plant has impacted the University of Texas at Arlington, which was awarded a $1.3 million grant from the federal government to develop a more efficient process for sourcing rare earth minerals, partnering with Ames National Laboratory and MP Materials.
Those investments and agreements led the company to expand production at its Fort Worth plant and begin plans for a second plant, James Litinsky, chairman and CEO of MP Materials, said during the Fort Worth Economic Development Partnership annual meeting in October.
The Fort Worth plant, which now employs more than 100, can currently produce about 1,000 metric tons of magnets, but will be adding production capability to produce 3,000 metric tons. The second plant dubbed the 10X, will be capable of producing 7,000 metric tons, Litinsky said.
The investment by the federal government included a 10-year agreement establishing a price floor commitment for MP Materials’ magnets, which gives the company some price stability and protects it from foreign competitors who might flood the market with cheaper offerings, Litinsky said.
Following the federal investment, MP Materials obtained commitments from JPMorgan Chase and Goldman Sachs to provide $1 billion of financing for the costs of constructing and developing the new plant.
While the Northlake site appears to be the leader in the clubhouse for the new plant, MP Materials officials said “no final decisions have been made at this time.”
Bob Francis is business editor for the Fort Worth Report. Contact him at bob.francis@fortworthreport.org.
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