Hertha Metals Targets US Rare Earth Iron Gap

A US defence deadline banning Chinese-origin rare earth magnets and their constituent materials from covered defence systems is fast approaching, and the race is on to find a domestic supply of high-purity iron.

Neodymium-iron-boron (NdFeB) permanent magnets are used in defence systems, EV motors and clean energy infrastructure, but to make them, high-purity iron is required. At present, most of the high-purity iron used in US magnet manufacture is sourced from China.

As part of a wider pushback against reliance on China for critical materials, the Defense Federal Acquisition Regulation Supplement (DFARS) will ban Chinese-origin constituent materials from covered defence systems from January 2027.

US startup Hertha Metals, founded by MIT-trained engineer Laureen Meroueh, is aiming to plug the gap ahead of the deadline with its proprietary Flex-HERS technology. 

Hertha says on its website the process makes it the only domestic producer of high-purity iron for NdFeB magnets, and operates what it describes as the largest demonstration-scale single-step steelmaking facility in the United States.

The overlooked but critical ingredient 

Making NdFeB permanent magnets is a complex process with many stages, and requires much more than just mining rare earths. A critical step is the production of alloys, which needs high-purity iron to happen.

America's efforts to erode its reliance on Chinese supply chains has, so far, largely focused on securing its own supply of rare earths, such as neodymium. Much less attention has been paid to sourcing the high-purity iron that alloy production requires.

"Today, that high-purity iron is being made 90% in China," says Hertha founder, Laureen.

According to a company press release, Hertha's Flex-HERS process, which uses electric arc furnace technology combined with natural gas or hydrogen, can process lower-grade domestic ores that conventional blast furnaces cannot handle economically.

This means lower-grade ore can be sourced from Minnesota and processed at Hertha's pilot plant in Conroe, Texas, cutting out the Chinese supply chain at a critical stage of magnet manufacture.

Hertha’s solution 

Hertha Metals was founded in 2022 by Laureen Meroueh, an engineer who previously led a hydrogen production startup.

The company raised US$17m in a seed round from Khosla Ventures, Breakthrough Energy Fellows, Pear VC and Clean Energy Ventures. That funding helped build the one-tonne-per-day pilot plant in Conroe, Texas, which has been running since 2024.

"When we opened up our headquarters in Conroe in 2023, we set out to demonstrate our technology at an appreciable scale for the steel industry," Laureen says.

"In just 12 months, we went from laboratory testing to tonnage per day of continuous production. We are now committed to applying our novel process to quickly filling a gap in domestic production."

Rajesh Swaminathan, Partner at Khosla Ventures, adds: "Since our seed investment two years ago, we have been impressed with Hertha's pace and execution, including their successful demonstration of a 1-tonne-per-day plant using natural gas or hydrogen." 

Hertha plans to scale to a commercial facility capable of producing more than 9,000 tonnes per year, with a longer-term target of 500,000 tonnes annually, which puts it at the same scale as existing US steel micro mills.

Just one gap among many

Hertha's technology looks to be the first domestic answer to the high-purity iron problem, but it is not the only problem the US needs to solve. 

Analysts warn that magnet alloy production, sintering, heavy rare earth processing and magnet manufacture itself all remain heavily dependent on Chinese capacity.

REEx, a rare earth investment platform, wrote on its website in an analysis of Hertha's expansion plans: "A magnet supply chain is not a mine. It is a mine, a separator, a metal maker, an alloy producer, a magnet manufacturer and every critical input in between." 

Hertha’s Flex-HERS process plugs one gap in that chain, but the rest remain open, and the January 2027 deadline is coming fast.