USMMA Working to Ensure Domestic Production of High

USMMA: Working to Ensure Domestic Production of High Performance Magnets Ed Richardson President USMMA Technology Metals Summit 2013

2013 © Magnet Development

2013 © Permanent Magnets Available Today Highest Temperature Highest Maximum Energy Product Alnico Ferrites Neodymium Samarium Iron Cobalt Boron Lowest Cost High Temp / High Max Energy Product

2013 © Permanent Magnets Available Today Highest Temperature Highest Maximum Energy Product Alnico Ferrites Neodymium Samarium Iron Cobalt Boron Lowest Cost High Temp / High Max Energy Product Generally Considered “High Performance”

2013 © Who Produces Them in the U. S. ? • Alnico Magnets ▫ Thomas & Skinner Indianapolis, IN 170 employees ▫ Permanent Magnetic Corporation Indianapolis, IN 50 employees ▫ Arnold Magnetic Technologies Marengo, IL 140 employees • Samarium-Cobalt ▫ Electron Energy Corporation Landisville, PA 100 employees • Hard Ferrites ▫ Hoosier Magnetics, Inc. (ferrite powder) Ogdensburg, NY 50 employees • Neodymium-Iron-Boron ▫ Hitachi Metals (planned) China Grove, NC 130 employees

2013 © How They Are Made: Casting Pour molten metal into molds Heat treat Grinding Inspection

2013 © How They Are Made: Sintering Cast Alloy & Crush Inspection Press Powder Grinding Sinter Heat Treat

2013 © High-Performance Magnets: Commercial Use • Aerospace ▫ Motors ▫ Sensors ▫ Switches • Medical ▫ Transducers Aerospace • Industrial ▫ Motors/generators ▫ Guitar pickups ▫ Instrumentation • Oil and Gas Exploration ▫ Sensors Industrial Oil Exploration Medical

2013 © High-Performance Magnets: Military Use Excalibur Artillery Shell Black Hawk Helicopter AIM-9 X AESA Radars F-22 A Raptor AGM-114 “Hellfire” JDAM Assembly Phalanx CIWS

2013 © Military Requirement for Domestic Sources: Some, Not All Hard (Permanent) Magnets • Four general types: ▫ Alnico ▫ Sm. Co (Rare Earth) ▫ Nd. Fe. B (Rare Earth) ▫ Hard Ferrites Soft Magnetic Materials • Multiple types, including: ▫ Electrical Steel ▫ Powdered Iron ▫ Soft Ferrites Specialty Metals Clause (10 U. S. C. 2533 b) (a) Requirement. — the acquisition by the Department of Defense of the following items is prohibited: Aircraft, missile and space systems, ships, tank and automotive items, weapon systems, or ammunition (and their components) with specialty metals not melted or produced in the United States A specialty metal not melted or produced in the United States for use in the above items.

2013 © Why Do We Need A Secure Supply? • Vietnam War ▫ Sony withheld cameras used to guide tactical missiles • 1983 ▫ Socialists in the Japanese Diet blocked the sale of ceramic packaging used in U. S. cruise missiles • 2002 ▫ Hellfire Missile production stopped during West Coast dock strike Critical parts sourced in Japan were awaiting off-loading • 2003 ▫ JDAM bomb production stopped during Iraq war because Swatch Group refused to ship critical part Disagreed w/ Bush Administration foreign policy

2013 © Why Do We Need A Secure Supply? • Critical to our economy ▫ Innovation is a key trait of the companies listed in the Business Week 50, an annual ranking of the top-performing companies in America • Critical to a strong military ▫ Weapons systems typically built with new, innovative technology and materials “Innovation remains a powerful engine of success”

2013 © Case study: Nd. Fe. B Magnets and Innovation • “Offshoring technology innovation: A case study of rare-earth technology, ” Fifarek, Veloso and Davidson, Journal of Operations Management, Vol. 26, 2008 ▫ Shows that once the domestic bonded neo magnet industry went to China, innovation by US industry involving bonded neo magnets decreased dramatically. ▫ Number of patents involving bonded neo magnets dropped precipitously. Without the ability to manufacture, we lose the ability to innovate.

2013 © U. S. Production is Vital • Develop unique materials for mission specific DOD requirements, U. S. market needs, AND commercialize. • Interest and ability to work with high performance, small production runs. • China has become a critical US defense supplier.

2013 © Summary • U. S. magnetic materials industry is alive. • 10 U. S. C. 2533 b “Specialty Metals Clause” applies to the high performance magnets. • High performance magnets are strategic materials in high-profile legacy and emerging weapon systems. • U. S. defense supply chain needs domestic, advanced, and specialized magnet technology capabilities for unique military requirements. • Supply Chain Security works for the Defense Department • The US military should not become dependent on China for its defense systems Ability to manufacture = ability to innovate

2013 © Questions? Ed Richardson President USMMA (317) 923 -2501 enr@usmagneticmaterials. com www. usmagneticmaterials. com