The Department of Defense inked about $1.2 billion in conditional loans through its Office of Strategic Capital last week to two companies working on rare earth processing.
The OSC was established in 2022 as part of DOD’s efforts to research and develop technologies to meet its required needs.
Phoenix Tailings
DOD and rare earth mineral processor Phoenix Tailings signed an agreement for a $500 million conditional loan commitment to scale the company’s domestic processing, according to a June 16 press release.
The loan, in addition to private capital, aims to provide about $1 billion to expand critical metal production at Phoenix Tailings’ existing facilities in New Hampshire and Massachusetts. The money will also support a new rare-earth separation and metallization plant in the U.S. called the Freedom Facility.
Phoenix Tailings chose the Freedom Facility name because “the mission of this operation is to bring supply chain freedom to America and her allies,” Nicholas Myers, CEO and co-founder, said in a June 17 LinkedIn post.
“Our vision at Phoenix is a world where there is no risk of supply chain disruption,” Myers said in the post. “A world where ready access to critical metals empowers people to build truly incredible innovations like those being developed at SpaceX, Tesla, Raytheon, and Apple.”
Once the facility begins operations, it will process a range of feedstocks to produce the light and heavy rare earth metals needed by defense systems and other U.S. industries, as well as allied supply chains, according to the company’s press release.
Additionally, the Freedom Facility aims to control technology and intellectual property domestically, reducing reliance on foreign entities of concern, such as China.
Phoenix Tailings is currently on a nationwide search for the Freedom Facility’s location and has a shortlist it is assessing, Anthony Balladon, co-founder and chief commercial officer, said in an email on June 19.
Operations are expected to begin in 2028.
Energy Fuels
DOD and rare earth mineral processor Energy Fuels signed an agreement for a $725 million conditional loan commitment to scale the company’s domestic processing, according to a June 18 DOD press release.
The loan as well as private capital will go toward a new rare-earth separation and metallization facility in the U.S. The money will also fund the expansion of Energy Fuels’ processing site in White Mesa, Utah, according to the company’s press release.
Energy Fuels specializes in uranium production, but the company is now entering the rare earth separation and metallization business.
“This important financing support from key investors aligns with Energy Fuels’ objective to be a vital player in the rare earths supply chain,” Ross Bhappu, president and CEO, said in a statement. “The United States government has been steadfast in its support of critical materials security, and we appreciate the OSC's financial support at this important time as we develop our vertically integrated supply chain.”
Energy Fuels’ increased production will support permanent magnet facilities across the U.S. industrial base and aims to improve supply chains for other specialty defense and industrial products, per the DOD press release.
Loan funds were allocated through the One Big Beautiful Bill, which President Donald Trump signed into law on July 4, 2025. The bill provides the OSC with $500 million of credit subsidy funding, creating up to $100 billion in available loan funds specifically for critical minerals production and related industries and projects.
