Vulcan Elements, ReElement Technologies sign $1.4B rare earth magnet supply deal with US

Vulcan Elements has entered a $1.4 billion partnership with refiner ReElement Technologies and the US government to scale the companies’ development of a domestic rare earth magnet supply chain.

The Commerce Department and Pentagon on Monday pledged financing and potential equity stakes in the domestic producer of rare earth magnets that are at the center of an ongoing trade war with China, the world’s dominant supplier.

The Department of War will receive warrants in both Vulcan Elements and ReElement Technologies. The Department of Commerce will receive $50 million of equity in Vulcan Elements.

Vulcan, a privately-held North Carolina-based startup, manufactures sintered permanent neodymium iron boron (NdFeB) magnets in the US for critical defense and commercial applications. It entered the US rare earth magnet manufacturing race this year.

In August, Vulcan and ReElement announced a commercial-scale offtake agreement for “light” and “heavy” rare earth oxides—the materials necessary to produce rare earth magnets.

NdFeB magnets are essential components in almost every advanced machine and electronic device—from AI data centers and semiconductor fabrication equipment to satellites, drones, robotics, electric motors and virtually all military platforms.

Planned build-out

Vulcan said it will build, commission and operate a 10,000-metric-tonne magnet facility. It is finalizing a multi-state search and will announce its selection in the coming weeks, the company said in an email.

Vulcan and ReElement said they will scale their 100% vertically integrated US-based magnet supply chain, which is already operating, to enable 10,000 tonnes of annual magnet production—with a focus on recycling end-of-life magnets and electronic waste.

The expansion to 10,000 tonnes of production capacity will be financed by Vulcan’s $620 million direct loan from the Department of War’s Office of Strategic Capital, $50 million of federal incentives from the Department of Commerce under the CHIPS and Science Act, and $550 million in private capital.

ReElement’s expansion of its recycling and processing capabilities will be financed by an $80 million direct loan from the Office of Strategic Capital, matched by private capital.

“Our investment in Vulcan Elements will accelerate US production of rare earth magnets for American manufacturers,” Secretary of Commerce Howard Lutnick said in the statement. “We are laser-focused on bringing critical mineral and rare earth manufacturing back home, ensuring America’s supply chain is strong, secure and perfectly reliable.”

“As a former Navy officer, I am honored by the trust that the American government and American people have placed in Vulcan Elements,” said Vulcan Elements CEO John Maslin.

“Now more than ever, we remain focused on execution and performance, so that we can deliver a capability that the nation urgently needs,” Maslin added.