Office of Strategic Capital signs $150 million conditional loan commitment with Niron Magnetics to scale domestic rare earth-free magnet production

The Department of War’s Office of Strategic Capital (OSC) announced a $150 million conditional loan commitment to Niron Magnetics, Inc. to expand the company’s rare earth-free magnet production capabilities.

Founded in 2014 and headquartered in Minnesota, Niron develops and manufactures permanent magnets that do not use rare earth elements. The company’s approach synthesizes magnets from domestically abundant inputs—iron and nitrogen—with the aim of reducing reliance on foreign-dominated supply chains.

OSC’s proposed financing, alongside private capital, would support construction of a $605 million manufacturing plant in Sartell, Minnesota. The facility is designed to produce up to 1,500 tons of rare earth-free magnets annually. Niron previously completed a two-year pilot project with the Department of Energy’s Advanced Research Projects Agency-Energy that enabled production of 1 to 2 tons per year.

“OSC’s commitment to Niron directly aligns with President Donald J. Trump’s mandate for the Department of War to leverage advanced commercial technology to maintain military capabilities while rapidly onshoring critical supply chains,” said David A. Lorch, Director of the Office of Strategic Capital and Senior Advisor to Deputy Secretary of War Steve Feinberg. “By supporting the establishment of a wholly domestic, rare earth-free permanent magnet manufacturing facility, this transaction mitigates a key supply chain vulnerability, bolsters U.S. industrial resilience against geopolitical disruptions, and ensures that next-generation technologies are powered by secure, domestically sourced components.”

“With the conditional loan commitment to Niron, OSC is seeking to advance President Donald J. Trump’s priority of securing a domestic supply chain for high-performance magnets, which are ubiquitous across commercial and defense applications,” said Asad Akram, Managing Director and Co-Head of Critical Minerals at OSC.
“High-performance magnets are integral to the U.S. economy and defense industrial base, and their importance is only going to grow on account of electrification, robotics, and defense modernization,” said Peter B. Zuckerman, Senior Managing Director at OSC.

“I applaud OSC for its continued focus on investments that deliver impact to the industrial base and shoring up supply chain vulnerabilities,” said Emil Michael, Under Secretary of War for Research and Engineering. “Rare earth-free magnets will reduce dependence on foreign-controlled supply chains and help equip the warfighter with more capable systems that enhance battlefield lethality.”

The conditional loan commitment outlines customary steps Niron must complete before financial close, including financial, legal, technical, and other requirements. In FY 2026, OSC has committed over $8.4 billion in debt financing and mobilized more than $17.8 billion in total capital from public and private sources to support the American industrial base.