US rare earth producer REalloys has received a contract worth up to 1.7 million dollars from the US Department of Defense to support the design of a domestic processing facility for critical metals used in advanced magnets, weapons systems and electronics. The funding, awarded through the Defense Logistics Agency, signals growing federal support for strengthening American supply chains amid tightening global competition over strategic minerals.
The Ohio based company said the project will focus on processing heavy rare earth elements including samarium and gadolinium into metal form. Rare earths must undergo metallization before they can be incorporated into high performance permanent magnets, which are essential components in precision guided munitions, radar systems, electric vehicles and a range of advanced defense technologies.
If completed at scale, the planned facility would have the capacity to process up to 300 metric tons per year of samarium and gadolinium, positioning REalloys as one of the largest US based sources of these materials. Heavy rare earths are particularly important for defense applications due to their ability to maintain magnetic strength at high temperatures.
The contract is structured in two phases over a 24 month period. During the initial stage, REalloys will develop detailed engineering schematics for a modular version of the processing plant. The modular design is intended to allow faster deployment and scalability, aligning with broader Pentagon efforts to accelerate domestic production of critical inputs.
China currently dominates global rare earth mining and processing and has imposed export restrictions on certain rare earth elements and other strategic minerals. Those measures have intensified concerns in Washington over supply vulnerabilities, especially as geopolitical tensions rise and demand for advanced military systems grows.
The Defense Logistics Agency, which manages procurement of materials and supplies for the US military, described the contract as part of a broader initiative to secure critical mineral supply chains. Federal officials have increasingly emphasized the need to reduce dependence on foreign sources for materials central to national security and emerging technologies.
REalloys recently began trading on the Nasdaq after merging with Blackboxstocks, marking a significant milestone for the company as it seeks to expand its operations. In addition to the proposed processing facility, the firm is developing a rare earth mining project in Saskatchewan, Canada. It has also secured a processing agreement with the Saskatchewan Research Council, the province’s technology innovation unit, to advance refining capabilities.
The Pentagon’s investment reflects a wider push to build a resilient North American rare earth ecosystem spanning mining, refining and magnet production. With global competition over critical minerals intensifying, domestic processing capacity is seen as a key pillar of US industrial and defense strategy.
