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18h ago

U.S. Sets Preliminary $1.4 Billion Deal to Build Rare-Earth Magnet Supply Chain

Pentagon loans plus a Commerce equity stake would scale a domestic magnet supply chain, pending final negotiations.

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An employee walks through the processing facility at the Mountain Pass mine, operated by MP Materials, in Mountain Pass, California, U.S., on Friday, June 7, 2019. America's only rare earths producer, MP Materials, has been shipping all its output from the Mountain Pass mine in California to China because there is currently no refining capacity available to handle its production anywhere else in the world, its biggest shareholder said last month. Photographer: Joe Buglewicz/Bloomberg via Getty Images
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Overview

  • Commerce disclosed a preliminary agreement for a $50 million equity stake in Vulcan Elements under CHIPS incentives to expand U.S. magnet production.
  • The Pentagon’s Office of Strategic Capital plans a $620 million direct loan to Vulcan and an $80 million loan to ReElement, and will receive warrants in both companies.
  • Vulcan intends to build and operate a U.S. facility targeting 10,000 metric tons per year of neodymium‑iron‑boron magnets.
  • ReElement will expand recycling and processing of end‑of‑life magnets, electronic waste, and mined concentrates to supply high‑purity rare‑earth oxides.
  • The $1.4 billion package blends roughly $750 million in federal backing with about $550 million in private capital, with terms described as preliminary and still under negotiation.