US Commits $500 Million Loan to Expand Domestic Rare Earth Processing

June 16, 2026

Mintesinot Nigussie

The United States Department of War’s Office of Strategic Capital (OSC) has announced a 500 million US dollars conditional loan commitment to Phoenix Tailings, Inc. to expand domestic processing of rare earth elements, as Washington moves to strengthen critical mineral supply chains.

The financing, combined with additional private investment, is expected to provide about 1 billion US dollars for the expansion of Phoenix Tailings’ existing operations and the development of a new US-based rare earth separation and metallisation facility.

Phoenix Tailings focuses on rare earth separation and metallisation, a specialised processing stage between raw mineral extraction and the production of permanent magnets. The company’s planned expansion is aimed at increasing domestic capacity for materials used across defence and industrial applications.

The investment will support the company’s planned Freedom Facility, which is expected to expand US capabilities in rare earth processing and contribute to a more integrated supply chain from mining through magnet production, according to the OSC.

“Supporting domestic processing for critical minerals and rare earths is a key focus for OSC, and the rare earth midstream processing capabilities that Phoenix Tailings represents are key shortage areas that need to be rapidly addressed,” said David A. Lorch, director of the Office of Strategic Capital and senior advisor to Deputy Secretary of War Steve Feinberg.

Phoenix Tailings currently operates two metallisation facilities in Burlington, Massachusetts, and Exeter, New Hampshire. The agreement remains subject to further financial, legal and technical reviews before the loan reaches final approval.

Emil Michael, Under Secretary of War for Research and Engineering, said the investment would help address vulnerabilities in critical mineral supply chains and support the resilience of the US defence industrial base.

The move reflects a wider US effort to reduce reliance on foreign sources for strategic minerals and expand domestic production capacity for materials considered essential to defence and advanced manufacturing.