US Defense Lends $700M to Rare-Earth Magnet Makers

The US Department of Defense approved a conditional $700 million loan package to expand domestic production of neodymium-iron-boron (NdFeB) rare-earth magnets.

Under the plan, $620 million will go to Vulcan Elements Inc. and $80 million to ReElement Technologies Corp. The Department of Commerce will take a $50 million equity stake in Vulcan as part of the effort.

NdFeB magnets are critical components in electric motors, sensors and guidance systems used across consumer electronics and advanced military platforms. Officials framed the financing as a strategic move to reduce reliance on foreign suppliers and to scale industrial capacity for magnet manufacturing and downstream assembly.

The loans are conditional and expected to be tied to performance milestones, permitting and supply-chain commitments. The initiative complements other federal investments aimed at securing minerals and processing capabilities for the high-strength magnet supply chain, while encouraging private-sector scale-up of domestic magnet production and related technical workforce development.