Well, it would appear that investors’ appetite for rare earths ain’t goin’ nowhere.
Yesterday, US rare earths magnet manufacturer Noveon Magnetics announced that it’s closed a $215M Series C led by a whopping $200M investment from One Investment Management (OneIM).
The company says that this big ol’ pile of cash will fuel “significant growth” of its magnet manufacturing capacity for everything from automotive to AI to defense.
They also added in a statement that the raise will “[facilitate] secondary sales by certain existing shareholders.” C’mon guys, you really wanna get out right now?
The good stuff: What with the Greenland of it all, most of you are probably pretty familiar with the whole rare-earths-critical-minerals crisis thing, but here’s a quick rundown for the uninitiated.
- Rare earth magnets (like the ones Noveon churns out) are found in everything from F-35s to the whizzy little drones we all know and love. That means that the more high-tech defense tech we build, the more of these magnets we need.
- Here’s the problem, though—China processes more than 90 percent of the world’s rare earths. FWIW, the US processes about 1 percent.
- Last fall, China flexed its magnet muscles, putting export controls on most rare earths and the tech used to process them into magnets. The controls were later suspended—but it scared officials straight.
- With the Davidson window closing in (and fast), the Trump administration has scrambled to onshore rare earth supplies. Last year, the Pentagon bought $400M of preferred stock in rare earths mining and processing company MP Materials, making it the majority shareholder.
- Plus, Congress officially banned the use of Chinese magnets by the Pentagon back in 2021—that kicks in in 2027.
TL;DR: Everyone and their mother is trying to wean themselves off of Chinese rare earths and magnets, and they’re turning to companies like Noveon to do it.
Star-spangled: Noveon was founded in Texas way back in the prehistoric era of 2014 as Urban Mining Company (v trendy), and rebranded to Noveon in 2023.
- The company specializes in neodymium-iron-boron (NdFeB) magnets—it is one of the very few companies outside of China that produce these.
- NdFeB magnets are used in everything from UAVs to missile guidance systems to aircraft actuators—anywhere weight and size are a constraint, these magnets are your guy.
- Noveon’s selling point is that its tech (especially its EcoFlux magnets) can deliver higher magnetic performance with fewer rare earths. That’s good news when you’ve got a bit of a supply problem.
- They also do magnet recycling—turning end-of-life magnet scraps into shiny new magnets.
The company has already signed partnerships with big boy firms, including General Motors (GM), LG Electronics, and Nidec Motor Corp. They also signed a deal with Kangwon Energy late last year to open a 2,000-ton annual production capacity facility in South Korea.
In a statement, Noveon said that this financing would allow it to “[expand] capacity beyond 2,000 tons per year, enabling the company to support existing commercial partners and capture growing demand from critical industries requiring high-performance, high-quality magnetic materials.”
Dig deep: OneIM, for its part, is making serious money moves in the rare earths space. The fund—founded in 2022 by Rajeev Misra, former CEO of SoftBank’s $100 billion Vision Fund—has over $7B AUM and was also a major investor in Vulcan Elements’ $65M Series A (also NdFeB-focused, we’ll note).