Hertha Metals Secures $17 Million, Plans to Produce High-Purity Iron by 2027
en.Wedoany.com Reported - The U.S. defense supply chain faces a regulatory deadline in January 2027 that bans the use of Chinese rare earth magnets and their raw materials in covered defense systems, putting pressure on domestic production of high-purity iron, a critical component. High-purity iron is an essential raw material for neodymium-iron-boron permanent magnets, which power electric vehicle motors and renewable energy infrastructure, in addition to defense applications. Currently, China supplies most of the high-purity iron used in U.S. magnet manufacturing.
The Defense Federal Acquisition Regulation Supplement will take effect in January 2027 as part of broader efforts to reduce dependence on China for materials critical to national interests. Laureen Meroueh, an engineer trained at the Massachusetts Institute of Technology (MIT), founded Hertha Metals to address this supply gap. The startup has developed a technology called Flex-HERS and plans to produce high-purity iron domestically before the regulatory deadline. According to the company's website, Hertha operates the largest demonstration-scale single-step steelmaking facility in the U.S. and claims to be the only domestic producer of high-purity iron for neodymium-iron-boron magnets in the country.
Producing neodymium-iron-boron permanent magnets requires multiple manufacturing stages, not just rare earth mining. Alloy production is one such stage, where high-purity iron becomes necessary. Policy efforts to reduce reliance on the Chinese supply chain have primarily focused on securing domestic rare earth supplies like neodymium, but high-purity iron needed for alloy production has received less attention. "Today, 90% of high-purity iron is produced in China," said Hertha founder Laureen.
According to a company press release, Hertha's Flex-HERS process uses electric arc furnace technology combined with natural gas or hydrogen. This method can process low-grade domestic ores that traditional blast furnaces cannot economically handle. Low-grade ore from Minnesota can be sourced and processed at Hertha's pilot plant in Conroe, Texas. This eliminates dependence on the Chinese supply chain for one stage of magnet manufacturing. The company was founded in 2022 by Laureen Meroueh, who previously led a hydrogen production startup. Hertha raised $17 million in seed funding from Khosla Ventures, Breakthrough Energy Fellows, Pear VC, and Clean Energy Ventures, which supported the construction of a one-ton-per-day pilot plant in Conroe that began operations in 2024.
"When we opened our headquarters in Conroe in 2023, we set out to demonstrate our technology at a scale significant for the steel industry," said Laureen. "In just 12 months, we progressed from lab testing to continuous production of several tons per day. We are now committed to applying our new process to rapidly fill the gap in domestic production." Rajesh Swaminathan, a partner at Khosla Ventures, added: "Since our seed investment two years ago, we have been impressed by Hertha's speed and execution, including their successful demonstration of a one-ton-per-day plant using natural gas or hydrogen." The company plans to scale up by building a commercial facility with an annual capacity of over 9,000 tons. A long-term target of 500,000 tons per year would match the scale of existing U.S. steel micro-mills.
Hertha's technology could provide a domestic solution to the high-purity iron problem, but analysts warn that magnet alloy production, sintering, heavy rare earth processing, and magnet manufacturing itself remain heavily reliant on Chinese capacity, with multiple links in the supply chain still lacking domestic alternatives. Rare earth investment platform REEx wrote in an analysis of Hertha's expansion plans on its website: "The magnet supply chain is not a single mine. It involves mines, separation plants, metal manufacturers, alloy producers, magnet manufacturers, and every critical input in between." The Flex-HERS process addresses one gap in this chain, but as the January 2027 deadline approaches, the remaining gaps persist.
