Niron Magnetics closing in on site for $1.8 billion plant
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CEO Jonathan Rowntree holds one of his magnets in Niron Magnetics' Northeast Minneapolis lab. Photo: Nick Halter/Axios Twin Cities
Niron Magnetics is one of Minnesota's most promising startups in years, creating hundreds of jobs and exciting some of the world's largest manufacturers with its magnets.
Why it matters: The stakes are high as Niron builds its first plant in Sartell that will bring the high-performance magnet to market. Mass production could reduce U.S. reliance on rare-earth metals from China and boost a sluggish state economy.
Yes, but: It remains to be seen how much of the company's future growth will happen here.
State of play: Niron's northeast Minneapolis headquarters employs 180 people and will have 200 workers by the end of the year, CEO Jonathan Rowntree tells Axios.
- Another 175 will eventually make the magnets in the Sartell facility, which will cost hundreds of millions of dollars by the time it opens next year.
Driving the news: An even bigger prize is on the horizon, and Minnesota's chances don't look good.
- The company is conducting a site search for a $1.8 billion plant with 700+ employees. The company will announce a state selection by the end of the year, Rowntree says.
What they're saying: "Minnesota is still on our list," he says. "But they're struggling to be competitive with some of the other states."
- Rowntree speaks highly of Minnesota's labor force, but adds that "state incentives are an important part of that (choice)."
The big picture: Subsidies for large-scale manufacturing plants are highly competitive. Iowa just landed a $15 billion steel mill by offering Minnesota's Mesabi Metallics an eye-popping $1.4 billion tax-credit package for 1,750 jobs.
Between the lines: Minnesota has typically resisted such large subsidies. The Department of Employment and Economic Development (DEED) provided a $10 million grant for the Sartell facility, but said it has limits on how high it can go.
- "DEED operates within the authority and financial tools granted to us by the state legislature for business recruitment, retention and expansion projects," a spokesperson said in response to Rowntree's comments on Minnesota.
Catch up quick: Born in a University of Minnesota lab, Niron Magnetics uses mostly nitride and iron — both in ample domestic supply — to make magnets that the company says will be the first of their kind.
- Niron's investors are a who's who of manufacturers: Honda, General Motors, Stellantis, Volvo and Samsung, among others. The magnets, Rowntree says, perform better under the high temperatures in automotive engines.
- Those investments also bring the company close to several buyers of the magnets once production begins in Sartell.
Zoom out: The U.S. is heavily reliant on China for magnets, and Rowntree envisions Niron eventually building several large plants in the U.S. and abroad to satisfy a growing demand due to an increasingly electrified world.
- The company is targeting loans and grants from the U.S. Department of Energy and the Pentagon to help finance the plant, and it's eyeing an IPO in the next two to three years, he says.
- "It's imperative (to make them domestically) for national security — for defense applications — but also for economic security, because our modern lives depend on magnets," Rowntree says.
The bottom line: Even if Niron chooses elsewhere for its massive facility, Rowntree says it's still planning to keep its headquarters here.
- "Our intent is to continue to grow here," he says. "We'll see how that continues to work out. There's a lot of great talent here in the Twin Cities for what we're doing."