Ara Partners subsidiary e-VAC Magnetics secured a US$335 in non-recourse financing to build an NdFeB magnet facility in North Carolina.

e-VAC Magnetics secured a US$335M non-recourse financing package via its 100% owner Ara Partners to fund the construction and commissioning of an NdFeB magnet production facility. The financing was arranged by a consortium, including Bank of Montreal (BMO), Mitsubishi UFJ Financial Group, Canadian Imperial Bank of Commerce Rabobank and Société Générale. e-VAC Magnetics began construction of the NdFeB facility, located in Sumter, South Carolina, USA, in March 2024, scheduled for the first production of magnet products in Q3 2025.   The recent financing package follows on from the US$111.9M tax credit approved under the Inflation Reduction Act (48C) Qualifying Advanced Energy Project Tax Credit, which will also be used to assist construction of the Sumter facility.    

In 2023, e-VAC Magnetics secured an offtake agreement with General Motors (GM) for the manufacture of sintered NdFeB magnets to be used in automotive applications, principally within the drivetrains of GM's hybrid and EV vehicle range. e-VAC Magnetics, being part of German-based Vacuumschmelze, has experience in producing limited volumes of magnets for automotive applications. The commissioning of a new facility producing significant volumes of magnet blocks for high-performance automotive applications will likely pose technical challenges for e-VAC Magnetics during ramp-up, though access to suitable raw material may form the largest hurdle. 

The availability of rare earth metal and alloy products outside of the Chinese market is limited, with many existing producers in Japan and Europe already tied into supply agreements or producing limited volumes. Supply of magnet alloys or metal from recycled sources in Europe and the USA is also limited in volume. The Sumter facility is forecast to be targeting a capacity of <5ktpy NdFeB, suggesting a RE metal requirement of <1.6kt. With no existing commercial scale rare earth metal and NdFeB magnet alloy being operational in the USA in 2024, the Sumter facility will likely be reliant on imports of rare earth feedstock to scale production.