The “rare-earth” magnet has an unglamorous secret: it’s about 70% iron, and the U.S. imports almost all the high-purity kind. Hertha Metals has started building a fix in Conroe, Texas, and the Pentagon and Toyota’s venture arm are among the backers of this rare-earth magnet iron plant.
The startup broke ground on Hertha Chalyx on Oct. 8, its first commercial plant. The price tag is roughly $100 million, and the site sits next to the company’s Pi100 pilot plant.
What the Conroe Rare-Earth Magnet Iron Plant Will Make
Chalyx is designed to produce about 10,000 metric tons a year of steel-grade and magnet-grade high-purity iron combined. It will run on domestic iron ore, mainly from Minnesota’s Iron Range, while Texas natural gas will supply the energy. Minnesota dirt, Texas gas: this magnet-grade iron plant leans almost entirely on American inputs.
The timeline is not quick. The plant is expected online in late 2027, and magnet-grade production should begin in early 2028. Meanwhile, CV Engineering is handling engineering, procurement and construction management.
Why This High-Purity Iron Matters
Rare-earth magnets get the headlines, but iron does most of the work. Neodymium-iron-boron magnets are roughly 70% iron by weight, according to CityBiz. They show up in electric vehicles, aerospace systems, radar and data centers.
Here’s the thing: if you drive, fly or stream anything, you are downstream of this supply chain. Where the iron comes from is not just a Pentagon problem.
Top magnet makers need iron that is 99.95% pure. Hertha says its pilot plant has hit that spec. The company also says it is in active supplier qualification with major U.S. magnet producers. Both points are the company’s own claims, and I found no independent verification yet. Still, a high-purity iron facility that hits that number would matter to a lot of buyers.
Who Is Paying for the Rare-Earth Magnet Material Plant
The money comes from a $133.65 million Series A announced Sept. 29. It includes a $65 million equity investment from the U.S. government. That cash flows through the Industrial Base Analysis and Sustainment program, known as IBAS, in partnership with the Economic Defense Unit. Heatmap describes IBAS as the Pentagon channel for this investment.
Khosla Ventures and Doerr Capital co-led the round. Toyota Ventures also participated, along with CEV, Pear Ventures, Gates Frontier, Niterra SUISO no MORI Fund and Siemens Financial Services.
One caution on the “Toyota-backed” label. It rests on Toyota Ventures joining the round, and I found no stake size and no supply deal with Toyota Motor or Toyota Tsusho. For more on how big projects like this land in the state, see how Blue Origin’s Constellation Park is bringing 2,000 jobs to Hutto.
The Pitch Beyond Defense
Hertha uses a single continuous reactor to turn iron ore into iron or steel with natural gas or hydrogen. SteelOrbis reports the company claims production costs 25% below blast furnaces. It also claims emissions cuts of about 50% on natural gas and up to 98% on hydrogen. Treat those as promises until someone outside the company checks them.
Chalyx will also supply material for trials with steelmakers and manufacturers. Longer term, this rare-earth magnet iron plant is meant to anchor a planned mill making 500,000 metric tons a year.
Founder and CEO Dr. Laureen Meroueh framed it as an invention story: she said an industry so fundamental still had “enormous room for invention.” Texas leaders say they want that kind of growth, and what candidates promise on jobs, taxes and homes may shape how much of it the state wins.
The Thing to Watch at This Rare-Earth Magnet Iron Plant
So is this a real supply-chain fix or a very expensive pilot with a nice press release? The answer arrives in 2027 and 2028. A Texas plant that actually delivers 99.95% iron to magnet makers would close a gap China has quietly held for years.
Until then, it is a $100 million bet on dirt from Minnesota and gas from Texas.
