Key Takeaways

• Vulcan Elements, a North Carolina startup, has secured over $10 million in Defense Department contracts essential for national defense.
• The company aims to advance U.S. production of rare earth magnets, currently dominated by China.
• Vulcan recently announced a $65 million funding round to scale manufacturing capacity and meet rising demand across various industries.

New Player in Rare Earth Magnets

Vulcan Elements, a two-year-old startup based in North Carolina, has made significant strides in the rare earth magnet sector by securing more than $10 million in contracts with the U.S. Defense Department. This development highlights the urgent need for a domestic supply chain for rare earth elements, particularly amid concerns over China’s control, which accounts for 94% of global production and recently restricted exports.

Founded by former U.S. Navy officer John Maslin, Vulcan has landed nine Department of Defense (DOD) contracts within the last eight months. The company’s manufacturing facility commenced operations on March 31, with plans to fulfill these initial contracts in the upcoming 60 days. The contracts will provide magnets for diverse military needs, including ground vehicles, shipbuilding, munitions, drones, and satellites.

Maslin emphasized the vital role of these magnets, describing them as “the invisible building blocks of our economy.” He stated that without these components, advanced military systems cannot be constructed.

Vulcan recently announced a $65 million Series A funding round, led by Altimeter Capital and supported by One Investment Management. This influx of capital is seen as essential for scaling operations to meet both current and future demands. The company plans to expand its manufacturing capabilities beyond its pilot facility, which currently produces 10 metric tons of magnets. With the funding, Vulcan anticipates ramping up production to hundreds of tons within a few years, ultimately reaching thousands of tons by the end of the decade.

The demand for rare earth magnets extends beyond defense applications, encompassing sectors such as artificial intelligence, robotics, electric vehicles, and semiconductor manufacturing. The urgency for domestic production has prompted the DOD to treat magnets with the same level of strategic importance as semiconductors and batteries. Recent legislative changes mandate that magnet sources in U.S. defense systems must be verified, effectively prohibiting inputs from China.

Vulcan’s assertion that it operates without reliance on Chinese materials or technology positions it favorably in this evolving market. Its manufacturing process, validated by the Department of Energy’s Ames Laboratory, exclusively uses U.S. and allied inputs.

While current production from Vulcan is described as “a drop in the bucket,” Maslin emphasizes that mastering magnet production, regardless of volume, is a complex achievement. The process involves intricate manufacturing techniques and metallographic challenges that require skilled expertise.

With the recent funding, Vulcan plans to hire additional engineers and technicians to prepare for rapid expansion. The company is optimistic that its initial contracts with various military branches will evolve into a critical role in reshaping the domestic supply chain for rare earth magnets, an industry poised to see exponential growth in coming years.

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