TETRA & Magrathea Forge US Magnesium Hub to Counter China's Grip

SPRING, Texas – December 02, 2025 – TETRA Technologies, Inc. (NYSE: TTI) and private technology firm Magrathea Metals, Inc. have signed a pivotal term sheet to form a joint venture, a move that signals a serious effort to re-establish a domestic magnesium metal supply chain from the brine-rich fields of Southwest Arkansas. The partnership aims to construct a production facility at TETRA's Evergreen Project site, leveraging Magrathea's novel clean technology to address a glaring vulnerability in the U.S. defense and industrial base.

The announcement is more than a typical corporate partnership; it represents a strategic countermove against decades of escalating import reliance. By targeting magnesium—a mineral designated as critical by the Departments of Energy, War, and Interior—the venture directly confronts the geopolitical risks associated with a supply chain almost entirely dominated by China. For investors and industry stakeholders, this project serves as a crucial bellwether for the feasibility of reshoring critical mineral production through a combination of technological innovation, private investment, and government backing.

A Critical Choke Point in the Supply Chain

The United States currently finds itself in a precarious position regarding magnesium. Following the idling of operations at US Magnesium LLC, the nation's last primary producer, the U.S. became 100% reliant on imports and recycling to meet its demand for the lightweight structural metal. This dependency is not just a matter of economics; it is a pressing national security emergency.

Globally, China accounts for an overwhelming 85% to 91% of primary magnesium production. This dominance gives Beijing immense leverage over a "gateway metal" indispensable to modern industry. Magnesium is essential for creating high-strength, low-weight aluminum alloys used in everything from fighter jets and military vehicles to consumer automobiles and electronics. It is also a critical desulfurizing agent in steel production and a key component in manufacturing titanium. As one industry analyst noted, a disruption in magnesium exports from China could cripple key sectors of the Western economy overnight.

The TETRA-Magrathea venture is designed to plug this strategic gap. "Our intention to work with Magrathea for the clean, high-quality domestic manufacturing and production of magnesium is another key step towards achieving our ONE TETRA 2030 strategy while supporting the U.S. initiative to develop a secure domestic supply of critical minerals," said Brady Murphy, President and CEO of TETRA, in the official announcement. This initiative seeks to transform a domestic resource—the Smackover Formation brines in Arkansas—into a secure source of a vital defense material.

Clean Technology as a Strategic Differentiator

Central to the venture's viability is Magrathea Metals' groundbreaking technology. The California-based firm has developed a new generation of electrolytic process that produces magnesium from brines with a zero-carbon footprint. This stands in stark contrast to the Pidgeon process, the energy-intensive and high-emission thermal reduction method that is the backbone of China's production monopoly. Magrathea's method reportedly generates zero CO2 equivalent per kilogram of magnesium, compared to over 40 kg for the conventional Chinese process.

This technological leap offers two powerful advantages: environmental sustainability and cost-competitiveness. The carbon-neutral process is expected to streamline permitting and appeal to ESG-conscious investors and customers. More importantly, Magrathea claims its proprietary electrolyzer, which operates at a lower temperature and can utilize off-peak renewable energy, can make magnesium at a cost that is competitive with, or even lower than, traditional producers.

The U.S. government has already placed a significant bet on this technology. Magrathea has secured Defense Production Act (DPA) Title III funding from the Department of Defense, with reported figures ranging from $19.6 million to part of a larger $100 million program, to support the development of its first commercial-phase facility on-site at TETRA's Evergreen plant. This federal backing not only de-risks the initial scale-up but also validates the technology's strategic importance. "This joint venture will unlock the value created by our team over the past three years," stated Alex Grant, CEO of Magrathea. "We are now taking meaningful steps to evolve from a technology R&D lab to an industrial project co-developer."

Arkansas: An Emerging Multi-Mineral Hub

The project's location in Southwest Arkansas is no accident. TETRA is already developing its Evergreen Project near Stamps, a facility designed to produce 75 million pounds of bromine annually from the region's rich brines, with operations planned to commence by late 2027. The addition of magnesium production, along with plans to also extract lithium, positions the Evergreen Project as an integrated multi-mineral processing hub.

This aligns perfectly with TETRA's ambitious 'ONE TETRA 2030' strategy, which aims to more than double revenue to over $1.2 billion by the end of the decade by expanding from its traditional energy services base into high-growth critical minerals and water treatment markets. By leveraging its existing brine acreage, operational expertise, and infrastructure development, TETRA can create significant synergistic value. The company would combine "Magrathea's advanced process technology with TETRA's deep operational expertise and a world-class magnesium resource base," as CEO Brady Murphy highlighted.

The economic ripple effects for Arkansas are substantial. The project has garnered strong support from state leadership, with Governor Sarah Huckabee Sanders noting, "Magrathea and TETRA's investment builds on Arkansas' defense industry and ensures our nation's future is powered by American innovation." The DPA-funded portion of the project alone is projected to create dozens of jobs by 2025, with hundreds more expected as the commercial smelter is built out. This venture represents a tangible example of how federal industrial policy and private sector innovation can converge to foster regional economic growth while simultaneously addressing national strategic objectives.

The Path to Market and Competitive Positioning

The TETRA-Magrathea venture enters a global magnesium market valued at approximately $3.8 billion in 2023 and projected to grow at a CAGR of over 5% through 2032, driven by demand for lightweighting in the automotive and aerospace sectors. With a complete void in U.S. primary production, the joint venture faces a clear market opening.

Magrathea's timeline is aggressive, aiming for a demonstration plant by 2026 and scaling to mass production of two million pounds per year by 2027, with a long-term goal of becoming the largest primary producer across NATO countries by 2030. The key will be executing this scale-up on time and on budget. If successful, the venture will not only provide a secure domestic supply for defense contractors but also offer a compelling "green" alternative for commercial buyers in the automotive and electronics industries looking to de-risk their supply chains and reduce their carbon footprint. This new domestic source represents a foundational step in rebuilding American industrial resilience, one critical mineral at a time.