North Carolina startup Vulcan gets $1 billion for new rare-earth magnets factory
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Vulcan Elements, a Research Triangle Park-based startup trying to re-shore the production of rare-earth magnets, said Monday it's secured more than $1 billion in financing from the federal government and private investors to kick-start its first large-scale factory in the U.S. — one that could be in North Carolina.
Why it matters: Rare-earth magnets have become a notable bone of contention in U.S.-China trade talks, as China currently dominates the supply of rare-earth materials.
- Rare-earth materials are critical components in everything from data centers and electronics, as well as defense systems, drones and missiles.
Zoom in: Vulcan, founded in 2023, has secured a $620 million loan from the Department of War (formerly the Department of Defense) to start construction on a "10,000 metric tonne magnet facility."
- The U.S. Department of Commerce will also add $50 million in incentives from the CHIPS and Science Act, while also taking a $50 million equity stake in the company.
- Additionally, the company says it has more than $550 million in private capital lined up for the factory and is expanding a partnership with Indiana-based ReElement Technologies to scale up the facility.
State of play: Vulcan told Axios it will announce the location of the factory later this month. North Carolina is under consideration for the facility.
- The company already has a small-scale demonstration facility in Durham that has already hit key milestones in production, Vulcan Elements CEO John Maslin told Axios.
- It opened this spring off TW Alexander Drive, though the company declined to say how many people work there.
- "The entire reason we built [that] facility was to go and make sure that we understood every nut and bolt of the commercial equipment that we're going to be using and understanding who our suppliers are," Maslin told Axios. "We've been able to really tighten those dials and sharpen the pencil since we opened to make sure that we understand how that scale-up is going to go and work."
Flashback: The news comes a few months after Vulcan raised $65 million from investors in August, and hit a valuation of $250 million, Axios reported.
Zoom out: Vulcan now becomes one of a handful of companies that the Trump administration has taken an ownership stake in, including Intel and Lithium Americas.
- It's the latest sign that the federal government is committed to re-shoring the production of critical materials that are used throughout the economy and in defense.
What they're saying: Maslin, a former Navy officer, told Axios he is comfortable with the arrangement and wants the taxpayer to win, too.
- "We're going to be successful here in this business because we're doing it for the right reasons and doing it the right way and thinking about it through an engineering lens," he said. "If there's an opportunity to make sure that the taxpayers get a piece of that, I mean, that's just exciting for me."