On Monday, the US government promised to provide a total of $1.4 billion in funding and potential equity to domestic rare earth magnet producers to accelerate domestic production of rare earth magnets.
Rare earth elements have been at the core of the US-China trade war. For a long time, Beijing has dominated the entire rare earth supply chain from mining to processing.
According to a statement from the publicly listed company American Resources on Monday, its subsidiaries Vulcan Elements, a rare earth magnet production company, and ReElement, a rare earth refining company, will receive direct loans of $620 million and $80 million respectively from the Pentagon’s Office of Strategic Capital, along with $550 million and $80 million in private investments.
These loans will directly support the construction of advanced rare earth element separation, metallization, and magnet manufacturing capabilities in the United States. Vulcan Elements and ReElement have committed to achieving a joint annual production capacity of 10,000 tons of neodymium iron boron magnets, significantly narrowing the gap in the US neodymium iron boron magnet supply chain. As part of the loan commitment, the Department of Defense will receive warrants for ReElement Technologies Corporation.
The Defense Department’s loan funds come from the “Big and Great Act” signed by the president in July 2025. The act provides up to $100 billion in total loan authorization for the OSC, specifically for domestic critical mineral production and related industries and projects.
In addition, Vulcan Elements has signed a non-binding memorandum of understanding with the Department of Commerce. The Commerce Department will provide $50 million in funding to the company under the 2022 “Chip Act” for the purchase of equipment necessary for producing permanent magnets.
Vulcan Elements will supply magnetic materials for US defense and commercial products, with these permanent magnets potentially being used in fighter jets, wind turbines, and a range of other critical products.
ReElement Technologies is dedicated to the purification and recycling of rare earth materials, helping to recycle old magnets and increase domestic production.
John Maslin, CEO of Vulcan Elements, stated that these initiatives are aimed at expanding existing production capacities to raise magnet production to a level of significance for the United States.
“As a former naval officer, I am honored by the high level of trust that the US government and the American people have placed in Vulcan Elements. We are now more focused than ever on execution and performance to provide the critical (rare earth production) capacity that the nation urgently needs,” he said.
Mark Jensen, Chairman and CEO of ReElement Technologies, commented, “Our ongoing collaboration with Vulcan Elements is based on a shared vision, mission, and execution culture. With the support of the US government, we are able to provide the secure, scalable, and sustainable solutions that the national supply chain urgently needs.”
Bloomberg reported that these policies also further demonstrate the US government’s commitment to creating a rare earth and magnet market that is not influenced by Beijing, despite being a risky move that could help the US and its allies reduce their reliance on China.
Commerce Secretary Howard Lutnick stated in a release that the US investment in Vulcan Elements will accelerate rare earth magnet production for American manufacturers.
“We are focused on bringing the production of critical minerals and rare earths back to the US,” he said.