A budding manufacturer of rare-earth magnets plans to create up to 1,000 jobs in Johnston County, state officials said Tuesday — part of a $918 million project backed by the federal government, aimed at strengthening the domestic supply chain for materials used in nearly every type of electronic device.
Research Triangle Park-based startup Vulcan Elements is planning the plant at the Crosspoint Logistics Center in Benson, hoping to build up over the next several years. It would be the biggest factory of its kind outside of China, Gov. Josh Stein said Tuesday during an event in Benson.
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“This veteran-owned company will enable North Carolina to keep leading the way on national security, as well as building the economy of the future,” Stein said of the two-year-old company founded by a former naval officer.
The Pentagon-backed deal is expected to make North Carolina a U.S. hub for rare-earth magnets. Vulcan previously announced a $1.4 billion deal with the federal government that would help the company meet its goal of producing up to 10,000 metric tons of Neodymium Iron Boron magnets annually.
Rare-earth magnets convert electricity into motion, enabling things such as motors, sensors and generators to function in all manner of commercial products including medical devices, electric vehicles, wind turbines, computer chips, and in defense applications such as fighter jets, nuclear submarines and satellites.
Vulcan currently manufactures rare-earth magnets at a small RTP facility. The expansion is geared toward capturing increasing demand fueled by the growth of technologies such as robotics, drones, hybrid electric vehicles and infrastructure supporting artificial intelligence.
Details of the Johnston County expansion, previously reported by WRAL, were publicly disclosed Tuesday morning during a meeting of the North Carolina Department of Commerce’s Economic Investment Committee. The committee approved a performance-based incentives package for the company worth up to $25.2 million. Local officials also offered incentives worth up to $95 million, state officials said. The expansion is projected to grow the state’s economy by $2.6 billion.
As part of the state package, commerce officials approved a jobs grant worth up to $17.6 million. The state incentives would be paid out over 12 years in installments, provided the company hits hiring targets. The company plans to add the employees by the end of 2029, officials said. The average annual salary for the planned positions is expected to be about $81,900 — about 50% above the average annual wage for private sector jobs in Johnston County.
‘Weaponized’ supply chains
The federal government’s interest in Vulcan is centered on its efforts to strengthen the nation’s supply of rare-earth magnets and other materials that are predominantly sourced overseas. A stronger domestic supply chain, the thinking goes, can protect the U.S. government and domestic industry against economic policies or supply constraints imposed by foreign adversaries that control large segments of the market.
China — which produces the vast majority of the world’s rare-earth magnets — has been ratcheting up export restrictions as the country is locked in an ongoing trade battle with the U.S.
“Supply chains can be weaponized to impair national security imperatives and our country's economic resilience,” John Maslin, Vulcan’s chief executive, told state and county officials Tuesday.
To protect against such risks, the Pentagon’s Office of Strategic Capital offered a $620 million direct loan to help finance Vulcan’s expansion. Vulcan also lined up $550 million in private capital, the company said Nov. 3, prior to announcing the location of its plant. Meanwhile, the U.S. Department of Commerce said it struck a preliminary agreement to receive a $50 million equity stake in Vulcan as part of the deal.
The infusion is expected to help the company to build on its small operation. “Our team has been able to produce dozens of grades of rare-earth magnets that can go into hard disk drives, robotics, semiconductor fabrication equipment,” said Maslin, who started the company after serving six years as an officer in the U.S. Navy’s nuclear energy program.
During his time in the Navy, Maslin worked with industry to procure materials and components for ballistic-missle submarines. Now he’s on the other side of the table. “We work with every branch of the United States military, making sure that our critical defense programs have reliance and resilience in their supply chains,” Maslin said.
Vulcan’s Indiana-based partner, ReElement Technologies, would also expand its recycling and processing capabilities under the federal deal, with help from an $80 million direct loan from the Pentagon, matched by private capital. ReElement Technologies processes end-of-life magnets, electronic waste, and mined concentrates into high-purity rare earth oxides.
“Our investment in Vulcan Elements will accelerate U.S. production of rare earth magnets for American manufacturers,” U.S. Secretary of Commerce Howard Lutnick said in a statement after the federal financing deal was struck earlier this month. “We are laser-focused on bringing critical mineral and rare earth manufacturing back home, ensuring America’s supply chain is strong, secure and perfectly reliable.”
U.S. investment
The Trump administration has taken equity stakes in several companies, particularly those susceptible to foreign export restrictions on raw materials or critical components.
In July, Las Vegas-based MP Materials announced a partnership with the Pentagon that would accelerate the company’s production of rare-earth magnets — a deal that made the government the company’s largest shareholder. A week later, the company announced a $500 million supply agreement with Apple. The Trump administration has also taken equity stakes in Lithium Americas, Trilogy Metals and others.
Critics say the government should stay out of private industry and that in some cases its involvement could give an unfair advantage to companies it partners with or perhaps pose a risk to taxpayers if investments fail to perform.
Proponents of such arrangements say federal involvement is needed to accelerate domestic production to protect national security interests — particularly rare-earth magnets.
“This is about fully decoupling from China,” Republican U.S. Sen. Ted Budd said in an interview Tuesday. “We've seen them constrain rare-earths, which are in everything from munitions that we use, our submarines, our airplanes, our military and civilian aircraft, all the way down to the chips in the phone that you're using — everything seems to use rare earths. So we have to have our own supply chain, and Vulcan is a real leader in actually doing that.”
Stein, a Democrat, expressed some skepticism toward such arrangements but vowed to keep an open mind, acknowledging the project’s importance to the state economy and national security.
North Carolina Commerce Secretary Lee Lilley said the federal government’s investment helped state recruiters get comfortable with offering the state incentives package. The state wants to make sure a company receiving incentives has the backing of stable investors, he said Tuesday.
“They've got a strong group of investors,” Lilley said, “and there's really no stronger investor than the federal government in something like this. … We need to make sure that they can scale rapidly, and this is a great way to get them there.”
Local incentives
If its plan comes to fruition, Vulcan would become Benson’s biggest employer. In addition to the state and federal investments, the company is expected to benefit from roughly $95 million in local incentives, according to state officials.
The Johnston County Board of Commissioners on Tuesday approved a package that includes economic incentives in the form of annual cash grants over a 15-year period. The grants are an equivalent percentage of the annual property taxes paid by the company. The percentage would be reimbursed if job-creation and investment targets have been met.
Opponents of economic incentives argue that public dollars shouldn’t be spent on public industry — a sentiment local officials acknowledged Tuesday. But states use incentives to compete against each other to land job-creating projects and can sometimes make or break a deal, economic developers say, and that was a factor in this deal.
“I understand their concern,” said Commissioner Ted Godwin, who voted for the incentives package. “I, too, would not want county money wasted. But when you look at all the positives … I'd rather have 10% of $1 than 100% of nothing.”
Vulcan also considered sites in Indiana, Oklahoma and Ohio, state officials said. Ohio was the other finalist. The availability of incentives played a key role in the company’s decision to expand in North Carolina, state officials said.
County officials on Tuesday underscored the performance-based nature of the package to assuage any concerns over the package. The company would have to make a minimum investment of $826.3 million over a five-year period and create at least 900 full-time jobs in Benson that pay no less than an average of $73,109 per year. The investment and the hiring is expected to be completed by the end of 2030. The contract also includes clawback clauses, officials said.
“If those benchmarks are not met, no incentive is awarded,” Chris Johnson, the county’s economic development director. “Again, no risk to our taxpayers even during the incentive period.”
Another win for Johnston
The Vulcan deal represented the biggest of three jobs announcements by state officials on Tuesday. State officials also approved an incentives package of about $10 million for shipping giant Maersk, which plans to add 540 jobs in Charlotte. Officials also approved a $2.3-million jobs grant for industrial concrete product manufacturer Fit Precast, which plans to create 125 jobs at a new Gastonia headquarters.
Vulcan’s decision to land in Benson was a familiar story. Advanced manufacturers have been attracted to Johnston County because of its land availability and its proximity to north-south and east-west interstates that make it easy for companies to quickly get products to customers up and down the East Coast. The county is within a day's drive of New York and Florida.
In recent years, companies have announced expansions that promise to bring more than 2,500 jobs to the county. Novo Nordisk last year announced a $4.1 billion expansion that is expected to create 1,000 high-paying jobs in the county — the biggest life-sciences investment in state history, according to economic developers.
Vulcan looked at hundreds of sites around the country but chose North Carolina in large part because of the availability of skilled labor, utilities, and land for expansion, Maslin said in an interview.
Location was also key. The Crosspoint property sits just south of the nexus of Interstate 95 and I-40, less than an hour from the RTP headquarters.
A 500,000-square-foot phase of the development had already been built with hopes of luring a big tenant. And it has room to accommodate Vulcan’s planned growth.
“The facility in Benson is a unicorn site,” Maslin said. “...We just were very fortunate in that that specific facility and location and substation were right there in Benson.”
WRAL reporter Shaun Gallagher contributed to this report.