The tax credits will accelerate the construction of manufacturing facilities and strengthen domestic raw material supply chains.
The German rare earth magnet manufacturer Vacuumschmelze (VAC) is receiving tax credits of 111.9 million dollars to accelerate the construction of its first U.S. factory. The plant is currently under construction in South Carolina under the leadership of E-Vac Magnetics, VAC’s U.S. subsidiary, with the support of the U.S. Department of Defense. The funding that has now been announced is being provided as part of the Inflation Reduction Act (IRA), a massive subsidy program for the domestic green tech industry.
According to VAC, the factory will be completed in late fall 2025. The magnet manufacturer already signed a supply contract for permanent magnets for electric motors with car manufacturer GM in 2023 (we reported).
Given increasing geopolitical tensions, the U.S. is pushing ahead with the development of domestic supply chains and is aiming to reduce its dependence on China in particular, which dominates the production of rare earths. In addition to VAC, MP Materials also secured support under the IRA. The operator of the only U.S. rare earth mine, Mountain Pass, is building a domestic factory for permanent magnets as well and has signed a supply agreement with GM at the end of 2021.
Photo: iStock/xiao zhou
