American Magnet Maker Outlines Multi-Billion-Dollar Strategy to Quadruple Domestic Capacity

2026-10-26 companies

Northlake, Tuesday, 27 October 2026.
A newly released study shows HyProMag USA can unlock $2.1 billion in value by adding three plants, cutting energy use by 88% through recycled rare earth magnets.

HyProMag USA Announces Ambitious Expansion Plan

HyProMag USA LLC, a 50:50 joint venture between CoTec Holdings Corp. (TSXV: CTH; OTCQX: CTHCF) and HyProMag Limited, has unveiled a pre-feasibility study outlining a strategic expansion to quadruple its domestic rare earth magnet manufacturing capacity in the United States [1][3][5]. The initiative, which includes three new production plants and a centralized finishing hub in Texas, South Carolina, and Nevada, is positioned to transform the country’s critical supply chains for permanent magnets essential to electric vehicles, defense systems, and renewable energy infrastructure [1][3][5]. The study, conducted independently by PegasusTSI Inc. and BBA USA Inc., forecasts an incremental post-tax net present value (NPV) ranging from $1.85 billion to $2.06 billion, with an internal rate of return (IRR) between 31% and 36% [1][3][5].

Technological Innovation Drives Competitive Edge

The expansion leverages HyProMag’s proprietary Hydrogen Processing of Magnet Scrap (HPMS) technology, developed over 15 years with more than $100 million in R&D investment [1][5]. This method reduces energy consumption by 88% and cuts carbon emissions by 85% compared to conventional rare earth magnet production processes [1][5]. The technology recovers rare earth materials from recycled magnets, bypassing the traditional separation bottleneck and enabling a circular supply chain model [4][5]. HyProMag USA has already deployed mobile hard disk drive separation systems to recover NdFeB magnets using hydrogen processing without returning materials to separated rare earth oxides, demonstrating the scalability of its approach [5].

Phased Rollout and Economic Projections

The expansion plan outlines a phased rollout with Phase 1 of the Northlake, Texas facility scheduled for commissioning in mid-2028 [1][3][5]. The study projects total salable material production of approximately 6,000 metric tons per year by 2034, including about 4,192 metric tons of magnets, 1,305 metric tons of magnetic NdFeB alloy powder, and 503 metric tons of other salable material [1][3][5]. The capital costs for the expansion are estimated between $623 million and $656 million, with post-tax NPVs for the new plants ranging from $1.854 billion (Case 2, recycled and primary feedstock) to $2.062 billion (Case 1, recycled feedstock only) [1][3][5]. The project is expected to create around 300 jobs across Texas, South Carolina, and Nevada, complementing the 100 positions at the Northlake facility [1][3][5].

Strategic Backing and Future Outlook

HyProMag USA’s expansion plans have received support from various stakeholders, including a letter of interest from the U.S. Export-Import Bank for its first facility [3]. The company is evaluating project finance structures, likely incorporating significant project financing similar to the Northlake facility, with potential partial funding from cash flows generated by the first plant [3]. Management approved the financial outlooks for the pre-feasibility study and the Northlake facility on October 26, 2026, signaling strong confidence in the project’s viability [1][5]. CoTec Holdings CEO Julian Treger emphasized the study’s confirmation of a significant domestic rare earth magnet manufacturing platform, while Mkango Resources CEO Will Dawes highlighted the scalability of the HyProMag business model [1][5]. The company aims to transition to a full feasibility study in 2027, further solidifying its commitment to advancing domestic production capabilities [1].

Sources

Supply chain Rare earth magnets