Pentagon inks pair of rare earth mineral loans for $1.2 billion

Key Points:

• The Pentagon’s Office of Strategic Capital (OSC) has signed two conditional loans totaling $1.2 billion to support rare earth element production, including a $725 million loan to Energy Fuels for a new rare earth separation and metallization facility in the US.
• Energy Fuels plans to use the loan to enhance processing at its White Mesa Mill in Utah and build a rare earth metals and alloy facility, with a 20-year repayment period.
• A separate $500 million loan was granted to Phoenix Tailings to develop a "Freedom Facility" aimed at processing light and heavy rare earth minerals by 2028, supporting the mine-to-magnet supply chain.
• These investments are part of a broader government initiative to secure domestic supply chains for critical materials essential to advanced weapon systems, reflecting concerns about reliance on foreign sources.
• Some lawmakers have expressed concerns about the legality and competitive implications of the Pentagon’s equity deals in the rare earth sector, citing scrutiny over a $400 million stock purchase agreement with MP Materials announced in 2025.