U.S company Noveon Magnetics raises $215 million to expand homegrown rare earth magnet supply — $630 million spent in 2025 on American reshoring efforts to divest from Chinese reliance

Texas-based rare-earth magnet company, Noveon Magnetics, has raised $215 million from investors to expand its U.S. operations in an effort to improve American access to these highly important magnets, WSJ reports. Although this investment is designed to increase America’s home-grown supply of magnets, which are critical to a number of manufacturing industries, scaling up production can take years, so this is unlikely to solve the U.S. constricted supply of magnets overnight.

Over the past year, as trade relationships between the United States and China have waxed and waned as trade negotiations were conducted, tariff salvos were fired at one another, and the U.S. found itself unable to access the critical materials many of its manufacturing industries, including semiconductors, relied upon. Rare-earth magnets are most commonly found in HDD production, with companies like Western Digital and Seagate relying upon Chinese-origin magnets for production.

While China placed export restrictions on rare earth minerals to America, the U.S. administration went looking for alternatives. Deals with Korean firms brought increased Zinc supply when new facilities come online, with the U.S. and Japan inking a deal in October to fund alternative sources of critical materials.

In total, venture capitalists invested around $630 million in U.S. rare mineral startup companies in 2025, a new record for annual investment in the space, as reshoring efforts become clear. This goes hand-in-hand with $670 million of private and public loans and equity investment in North Carolina-based Vulkan Elements, which plans to develop a magnet manufacturing facility in the state (in return for the U.S. government receiving a $50 million stake in the company).

A further $80 million was invested in Indiana-based ReElement Technologies and its magnet recycling industry. The Pentagon has also received a 15% stake in rare-earth mining company MP Materials, which is developing its own new magnet factory in Texas.

Concentrated control

The big driver behind all these investments is bringing the magnet and rare-earth mineral supply chain entirely under U.S. control, and ideally, on U.S. shores. The current administration has made a major deal of hegemony over industries that it considers critical for strategic defence, as well as independence from allies and adversarial countries alike.

In many cases of industrial support, the U.S. government itself received stock stakes and profit-sharing agreements in return, creating a tit-for-tat arrangement, but also tying the revenues and ultimate profits of these companies to individuals within Trump’s orbit.

This latest investment in Noveon isn’t entirely different. Of the $215 billion being invested, $200 billion comes from a singular investment firm: One Investment Management. This is the investment firm of Rajeev Misra, the former leader of SoftBank Group’s Vision Fund. This investment makes it the largest shareholder and grants it two seats on the board.

Strategic resilience, rather than market control

Although the investment strategies of the U.S. government and its encouraged private investment may focus control of key industries on a few key players, that may be by design. Even if Noveon and its contemporaries can scale up production of rare earth minerals and magnets, they are unlikely to make much of a dent in these Chinese-dominated industries, where up to 90% of global production still runs through Chinese firms.

Instead, what the U.S. is doing is building redundancy. Just as the U.S. has flexed its supply-side muscle over the past year to restrict Chinese access to the latest cutting-edge silicon from companies like Nvidia, China has been able to return the favor by restricting access to rare earth minerals and materials required for the manufacture of those same high-end electronics and technologies, with the second round of controls suspended until November 2026.

Although the U.S. will need to continue to rely on its international partners, including China, for the supply of rare earth minerals for many years to come, its latest moves suggest it is building resilience to future trade embargoes and export blocks, which would otherwise stall industries that are important to the U.S. both for economics and strategic defense.

As WSJ highlights, just last week, a group of U.S. lawmakers proposed developing a $2.5 billion stockpile of supplies of critical minerals and materials, including rare earth magnets, to stave off any future supply shocks caused by restrictions from international trading partners.

Alongside shortages of critical rare earth minerals, many U.S. companies are also facing other component shortages, driven by the AI industry acquiring large majorities of DRAM and NAND supplies.