FILE PHOTO: The new GM logo is seen on the facade of General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. REUTERS / Rebecca Cook / File Photo
December 9, 2021
By Ernest Scheyder and Ben Klayman
(Reuters) – General Motors Co plans to source rare earth magnets for its future electric vehicles from new US manufacturing facilities under two separate deals announced on Thursday, back industry that the automaker abandoned in the 1990s.
The deals with MP Materials Inc and privately held Vacuumschmelze are GM’s latest attempt to source domestic EV materials for its Ultium platform, a goal it hopes to achieve by 2025. GM does not disclose financial terms.
Shares in MP, which announced last year through a special purpose acquisition company (SPAC) merger, were up 6.5% on Thursday. Shares of GM fell 1%.
The Biden administration is putting pressure on automakers through tax incentives and other measures to invest in and create jobs in the electric vehicle supply chain in the United States and reduce dependence on China. Country.
GM, which hopes to sell more than 1 million EVs a year by 2025, signed a supply contract with a lithium project in California in July and in October said it would work with General Electric Co to research, vehicles %20and%20renewable%20energy%20equiosystem rare earth supply chain.
“The more we can extract natural resources for batteries and electric vehicles from North America, process them here and manufacture them,” said Shilpan Amin, GM’s vice president of global procurement and supply chain. … the more value we can create.” . “Our strategy is to control our own destiny.”
Rare earths are a group of 17 metals that, after treatment, are used to make magnets found in EV motors that convert electricity into motion. China is the world’s largest producer and consumer of rare earths and rare earth magnets.
As part of the deal, MP Materials will build a neodymium-iron-boron (NdFeB) magnet facility in Texas, which will supply enough magnets for GM to build 500,000 EV engines. GM said it has no plans to buy a stake in the Texas facility, which will open in 2023.
MP will source the rare earths for making those magnets from a mine in California, where they are also making processing equipment. MP is now dependent on China to process the rare earths it extracts from its mine, and therefore all of its revenue.
A Chinese company also owns nearly 8% of MP, an ownership structure that has taken many by surprise in Washington. The Las Vegas-based congressman has long said it is an independent company and feels no pressure to favor Chinese interests.
The Pentagon awarded $13 million in rare earth grants to US projects that have also funded a number of MP-related projects and said the US needs more rare earth mines.
GM and Germany-based Vacuumschmelze say they will jointly build a US rare earth magnet factory. Shilpan said the terms of the deal are still being finalized, but the plan is to use locally sourced raw materials when production begins in 2024.
It is still unclear where Vacuumschmelze will buy rare earths as MP operates the only existing rare earth mine in the US.
In an ironic twist, GM was once the global leader in the rare earth magnet industry through its Magnequench division. But in 1995, GM sold the division — and its patents — to a consortium consisting of two Chinese partners.
The deal helped GM grow in the Chinese auto market, but also gave China access to rare-earth magnet technology first developed by US military scientists. The US NdFeB magnet factory has finally closed, shifting production to China.
GM’s dealings with MP and Vacuumschmelze are essentially looking to undo that move by revitalizing the US rare earth industry. It remains unclear whether GM, MP or Vacuumschmelze will license the NdFeB patents – several patents currently held by a division of Hitachi – for manufacturing in the US.
GM referred the patent question to two of its new suppliers. MP says it is confident it can patent or design new methods for making magnets that don’t infringe on patents. Vacuumschmelze representatives could not be reached immediately for comment.
While GM is building an electric vehicle supply chain for North America, GM is also building a chain for China, the largest country in terms of the company’s vehicle sales.
(Reporting by Ben Klayman, Ernest Scheyder and Joe White; Editing by Marguerita Choy)
https://www.oann.com/general-motors-sets-rare-earth-magnet-supply-deals-with-two-u-s-suppliers/?utm_source=rss&utm_medium=rss&utm_campaign=general-motors-sets-rare-earth-magnet-supply-deals-with-two-u-s-suppliers General Motors returns to rare earth magnets with two deals in the US