The 20-year direct loan commitment from the Office of Strategic Capital reflects strategic support for domestic production of advanced permanent magnets, the company said.
MINNEAPOLIS—Permanent magnets are essential components in defense systems, data centers, industrial automation, consumer electronics, robotics, aerospace applications, and advanced electric motors. Today, most rare earth permanent magnets are produced overseas, creating strategic vulnerabilities for U.S. manufacturers.
Niron Magnetics, a company working to commercialize the world’s first rare-earth-free Iron Nitride permanent magnets, recently announced a conditional commitment from the Department of War’s Office of Strategic Capital (OSC) for a direct loan of up to $150 million, with a 20-year term to support construction and equipment for the company’s advanced manufacturing plant in Sartell, Minnesota.
The financing would accelerate domestic production of Niron’s proprietary Iron Nitride permanent magnets, which do not require rare earth materials, and would expand domestic production of advanced permanent magnets, the company said in a release.
The Niron conditional commitment was announced by President Donald J. Trump at the American Mining Industry gathering in Washington D.C.
The financing would accelerate domestic production of Niron’s proprietary Iron Nitride permanent magnets, which do not require rare earth materials, and would expand domestic production of advanced permanent magnets. (Photo: Niron Magnetics/PRNewswire)
The conditional commitment is said to reflects the federal government’s growing focus on securing domestic production of high-performance permanent magnets. It is intended to advance Niron’s commercialization and scaling of powerful, rare-earth-free Iron Nitride magnets.
According to Niron Magnetics, Iron Nitride technology was developed at the University of Minnesota and scaled over the last 13 years, resulting in technology that provides manufacturers with a sought-after alternative to rare earth magnets.
Niron’s rare-earth-free magnets adopt a different approach. The company’s supply chain has no rare earth materials, offshore separation, or heavy rare earth exposure. Rather than reshoring a rare earth supply chain, Niron’s magnets are made without rare earth materials, instead making use of abundant, domestically sourced iron and nitrogen feedstocks. The result is a high-performance permanent magnet technology designed to improve materials security while reducing exposure to foreign export controls and rare earth price volatility.
“Permanent magnets are foundational to the technologies driving America’s economic competitiveness and national security,” said Jonathan Rowntree, CEO of Niron Magnetics, in the release. “This conditional commitment recognizes the importance of Niron’s rare-earth-free approach and the urgency of building domestic manufacturing capacity for a technology the world increasingly depends on. We are accelerating commercialization of an American-developed magnet technology that offers manufacturers a domestic path to high-performance permanent magnets built without rare earth materials.”
“Niron Magnetics is helping Minnesota lead the way in manufacturing to support our national security,” said Congressman Tom Emmer. “This conditional commitment from the Office of Strategic Capital will help Niron create approximately 175 high-quality jobs in Sartell, helping Minnesota’s economy grow and thrive. It’s great to see companies in our own backyard powering our economy and supporting our military.”
The conditional financing is intended to accelerate the buildout of Niron’s first commercial-scale rare-earth-free permanent magnet manufacturing plant scheduled to be operational in 2027. The 287,000-square-foot Sartell plant would bring material-to-magnet production under one roof and produce up to 1,500 tons of rare-earth-free permanent magnets annually.
The plant is the first step in Niron’s modular manufacturing platform. Final site selection is underway for a subsequent U.S. manufacturing plant that is capable of producing 10,000 tons of annual capacity and is expected to break ground in 2028.
Building on Niron’s proprietary manufacturing platform, the OSC financing is intended to expand domestic manufacturing capacity for high-performance permanent magnets made without rare earth materials, and strengthen the U.S. industrial base for critical industries, including AI infrastructure, defense, automotive, industrial automation, aerospace, and energy. It is also intended to accelerate commercialization of American-developed magnet technology while creating high-quality manufacturing jobs in Minnesota, the company said.
The OSC conditional commitment builds on Niron’s continued progress in advancing domestic magnet manufacturing, as global demand for permanent magnets is projected to grow from approximately 280,000 tons today to more than 600,000 tons by 2035. As demand accelerates across AI infrastructure, electrification, industrial automation, and advanced defense systems, Niron’s rare-earth-free technology offers manufacturers a domestic path to high-performance magnets without increasing dependence on constrained rare earth materials.
“The OSC conditional commitment reflects a broader national effort to expand domestic production capacity for technologies essential to U.S. economic and national security,” the release stated. “For Niron, the conditional commitment advances a manufacturing platform designed to reduce reliance on rare earth materials while supporting a more secure U.S. industrial base.”
The conditional commitment between OSC and Niron Magnetics remains subject to additional requirements before the execution of definitive financing documents, including, without limitation, OSC’s completion of due diligence to its satisfaction, Niron’s receipt of a specified minimum amount of equity, and certain other conditions set forth in the commitment letter, the release said.