FORT WORTH, Texas — Read this story and more North Texas business news from our partners at the Dallas Business Journal
MP Materials Corp. has received a $58.5 million tax credit from the U.S. Department of Energy for a new rare earth magnet plant in Fort Worth.
Las Vegas-based MP Materials (NYSE: MP) a few months ago completed what it calls the first "fully integrated" rare earth magnet manufacturing plant in the United States in AllianceTexas, in far north Fort Worth. The company will produce neodymium-iron-boron magnets, used in electric vehicles, wind turbines and everyday electronics such as headphones and speakers, according to an April 1 announcement.
China produces 92% of the world’s rare earth magnets, according to a Department of Energy report. Demand for the magnets is expected to increase 7.5% from 2023 to 2040 because of growth in the electric vehicle and wind energy sectors.
The tax credit, known as the Section 48C Advanced Energy Project tax credit, was expanded by the Inflation Reduction Act of 2022.
MP Materials started construction of its 200,000-square-foot Fort Worth plant in April 2022 and finished last October. The company is expected to manufacture finished magnets by late 2025 and has already started trial production of rare earth materials.
General Motors is one of MP Materials' main customers. GM signed a contract with MP Materials to supply magnets for its EVs such as the Hummer, Cadillac Lyriq and Chevrolet Silverado and a dozen other vehicles. MP is sourcing the minerals from Mountain Pass, California — the only operational rare earth mine in the country.
In 2022, the City of Fort Worth gave MP Materials a seven-year tax break on up to 60% of the incremental value of real and business personal property taxes. In exchange, the company agreed to invest $40 million in construction by the end of December 2023, bring $60 million in business personal property to the project and create at least 30 full-time jobs with an annual salary of $80,390. As of 2022, company executives expected total employment at the plant to eventually reach around 100.
MP Materials reported $253.4 million in revenue in 2023, down from $527.5 million in 2022. Net income also drastically dropped to $24.3 million from $289 million. Reasons for the decline include decreases in sales and prices of rare earth oxide.
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