Texas startup Hertha Metals has raised $133.65 million, including $65 million from the US government, to build a plant making high-purity iron for rare earth magnets. The US currently imports nearly all of that iron.
At a glance
- The US government invested $65 million of the $133.65 million round, alongside Khosla Ventures and Doerr Capital.
- The planned Hertha Chalyx plant will produce 10,000 tonnes a year of steel-grade and magnet-grade high-purity iron.
- High-purity iron makes up about 70% of a neodymium magnet by weight.
Background
The strongest permanent magnets, used in electric vehicle motors, wind turbines and defence systems, are neodymium-iron-boron (NdFeB) magnets. Most attention goes to the rare earths in them, but iron makes up the bulk of their weight. That iron has to be exceptionally pure, and the US has no domestic production of it today.
What happened
Hertha Metals has closed a $133.65 million Series A funding round. The US government put in $65 million of equity through its Industrial Base Analysis and Sustainment program. Khosla Ventures and Doerr Capital led the private side. Other backers include Toyota Ventures, Gates Frontier, Pear Ventures and Siemens Financial Services.
The money will build Hertha Chalyx, a Texas plant designed to make 10,000 tonnes a year of steel-grade and magnet-grade high-purity iron. The company expects to break ground this year.
Why it matters
Neodymium magnets are about 70% high-purity iron by weight. The US imports nearly all of that iron and has no capacity to make it at home. Efforts to build a US magnet supply chain have focused on rare earths, leaving this gap open. A domestic plant would close one of the less visible links in that chain.
"Every electric vehicle, aerospace platform, radar system, and data center depends on domestic iron and magnet feedstock suppliers," said chief executive Laureen Meroueh.
How the process works
Hertha's process, called Flex-HERS, makes iron in a single continuous reactor instead of the multi-step blast furnace route. It combines electric arc furnace technology with natural gas or hydrogen as the reducing agent. The company says it cuts emissions by up to 98% with hydrogen and by 50% with natural gas.
Hertha also claims production costs about 25% below conventional blast furnaces. It already runs a 360-tonne-a-year demonstration plant, called Pi100, in Conroe, Texas. In August, the company said it had reached 99.95% iron purity, the level magnet makers need.
Our read
Outlook: neutral. A 10,000-tonne plant is tiny against global iron and steel markets, so it will not move iron ore prices. Its importance lies in magnet supply chains, not volumes.
What to watch
- Groundbreaking at the Hertha Chalyx site, which the company expects this year.
- Supply deals between Hertha and US magnet makers.
- Further US government funding for magnet materials beyond rare earths.
For information only, not investment advice.
Iron price in India
metalscost.com India reference price as of 2026-10-03.
Detailed analysis
Timeline
- 2026-09-29: Hertha Metals announces a $133.65 million Series A to build its Hertha Chalyx plant.
Supply Drivers
The US has no domestic high-purity iron production today, so Chalyx would be a first source of supply.
Government Policies
A $65 million US government equity stake shows Washington is funding magnet inputs beyond rare earths.
What could lift prices
- Demand for magnet-grade iron grows with every EV motor and wind turbine built outside China.
- Government backing makes it easier for Hertha to finance and build the plant.
What could weigh on prices
- Chalyx's 10,000 tonnes a year is too small to affect global iron prices.
- Scaling a new single-step process from 360 tonnes to 10,000 tonnes carries execution risk.
Country impact
| Country | Impact | Reason |
|---|---|---|
| United States | Medium | The plant would give the US its first domestic source of magnet-grade iron. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Electric Vehicle Manufacturing | Positive | EV motor magnets need high-purity iron that is now almost entirely imported into the US. |
| Defence | Positive | Radar and aerospace systems rely on magnets whose inputs the US wants to make at home. |
Who gains, who loses
- US magnet makers: They would gain a domestic source of the iron that makes up most of a magnet's weight.
- Overseas suppliers of high-purity iron: US buyers who now import nearly all their supply would have a local alternative.
Other ways this could play out
- If Chalyx is built on schedule, Hertha could become the anchor iron supplier for new US magnet plants.
- If scaling the process proves harder than expected, US magnet makers will keep relying on imports.
Price risks
- Construction delays would push back any change to US high-purity iron supply.
- The claimed 25% cost advantage has not yet been shown at commercial scale.
Technical view
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Computed from metalscost.com's own stored price history.
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