Pentagon’s 700 Million loan and new agreement between 2 startups-Vulcan Elements and ReElement Technologies

The Pentagon has approved a $700 million conditional loan to two U.S. startups—Vulcan Elements ($620M) and ReElement Technologies ($80M)—to rapidly expand domestic production of neodymium-iron-boron (NdFeB) rare earth magnets, which are essential for EV motors, defense systems, satellites, robotics, AI data centers, and other high-tech equipment. This investment is part of a broader $1.4 billion public-private initiative aimed at breaking China’s near-total dominance (over 90%) of the global rare earth magnet supply chain. The Department of Commerce is also taking a $50M equity stake in Vulcan, highlighting how central this project is to national security and industrial policy. Vulcan will build a large U.S. facility capable of producing 10,000 metric tons of magnets annually, enough to meaningfully reduce foreign dependence. ReElement will supply purified rare earth materials using an advanced, low-footprint recycling and recovery process. A five-year offtake deal between the two companies ensures a closed, domestic supply loop starting in 2026. This push is part of a larger U.S. strategy that includes multibillion-dollar investments in MP Materials and partnerships with companies like Apple to rebuild the American rare earth ecosystem. The end goal is clear: secure domestic control of critical materials that power AI, defense technologies, EVs, and advanced electronics.