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4w ago

U.S. Unveils $1.4 Billion Public-Private Push to Build Rare-Earth Magnet Supply Chain

Officials cast the financing as a supply-chain security move following recent Chinese export turbulence.

FILE - The Department of Defense seal is seen on the podium in the Press Briefing room at the Pentagon on Oct. 29, 2024, in Washington. (AP Photo/Kevin Wolf, File)
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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

Overview

  • The package comprises a $620 million loan from the Pentagon’s Office of Strategic Capital to Vulcan, an $80 million OSC loan to ReElement, $50 million from Commerce’s CHIPS program, and about $550 million in private capital.
  • Commerce will take a $50 million equity stake in Vulcan and the Defense Department will receive warrants in both companies under a preliminary, non-binding letter of intent.
  • Vulcan plans a U.S. facility targeting 10,000 metric tons of neodymium-iron-boron magnets per year, with ReElement expanding recycling and processing to supply rare-earth oxides.
  • The companies and agencies say due diligence and final terms are still being negotiated before any funding closes.
  • The announcement follows Beijing’s recent easing of some rare-earth export controls after Trump–Xi talks, a change analysts note could complicate the commercial case even as Washington seeks to reduce reliance on China.