High-purity iron producer Hertha secures $133m in venture capital funding for single-step production scaling
US-based high-purity iron producer Hertha Metals has closed a $133-million Series A venture capital funding round, which includes a $65-million equity investment from the US government through the Industrial Base Analysis and Sustainment (IBAS) programme.
The funding round was co-led by Khosla Ventures and Deorr Capital, with participation from companies such as Pear Ventures, Gates Frontier, Niterra, Toyota Ventures and Siemens Financial Services.
IBAS is a federal initiative that funds projects to strengthen and modernize the defense industrial base.
The funding will finance the construction of Hertha Chalyx, the company’s new facility that plans to produce 10 000 t of steel-grade and magnet-grade high-purity iron.
Chalyx, alongside Hertha’s pilot plant, Pi100, will be the a modern iron and steel innovation complex, marking a significant step toward reshoring iron and steel production in the US, which is central to IBAS’s industrial base mission.
The US currently imports almost all of the high-purity iron used in rare-earth permanent magnets.
Neodymium, iron and boron magnets are made of roughly 70% high-purity iron by weight, yet the US has no domestic production capacity for this essential material.
As the US-made magnet push grows with the Defense Federal Acquisition Regulation Supplement, Hertha Chalyx is establishing domestic production of the high-purity iron that rare-earth magnets need, creating a supply chain that spans mining to manufacturing entirely on American soil.
Hertha's Flex-HERSTM process replaces the multi-step, coal-dependent blast furnace method with a single continuous reactor that processes any grade of iron-ore and uses natural gas or hydrogen as a reductant. The result is iron and steel at 25% lower production costs than conventional blast furnaces, with emissions reductions of 50% using natural gas and up to 98% using hydrogen.
Hertha currently operates a 360-ton-a-year demonstration facility in Conroe, Texas, and is in the active supplier qualification process with major US rare-earth magnet producers.
When Hertha Chalyx breaks ground this year, these integrated facilities producing both steel and high-purity iron on a single site will give US magnet and defense manufacturers a source they lack, making Hertha Metals as much a national security asset as an industrial one.
"Every electric vehicle (EV), aerospace platform, radar system, and data center depends on domestic iron and magnet feedstock suppliers. Hertha Chalyx closes that gap. We are building the supply chain this country needs, and we are doing it by providing a domestic cost-competitive option for manufacturers while unlocking safer and cleaner production," says Hertha CEO and founder Laureen Meroueh.
“Hertha has cracked what the steel industry has chased for many decades: iron and steel in one step, below blast-furnace cost, and made in America. That's the missing link for every magnet, EV, data center, and defense platform this country builds," adds Khosla Ventures partner Rajesh Swaminathan, Partner at Khosla Ventures.
“The industrial technologies that win are the ones that are cheaper, cleaner, and better performing. Hertha's technology has the potential to produce critical materials at lower cost and with far lower emissions, while deepening essential domestic manufacturing capacity. That’s the kind of innovation that can scale and make a real difference," adds Doerr partner Ryan Panchadsaram.
