The Trump administration is expanding its partnerships with private companies to boost the production of rare earth magnets used in energy and defense applications in an effort to curb the United States’s reliance on China.
President Donald Trump has sought to strengthen the domestic supply of critical minerals and rare earth elements, which are needed to build technologies such as aircraft, missiles, and batteries. The administration has begun taking stakes in and making deals with U.S. and allied mining companies to counter China’s dominance of the supply chain.
In the federal government’s most recent deal, Vulcan Elements, a startup manufacturer of rare earth magnets, announced on Monday that it signed a $1.4 billion deal to scale the domestic supply of rare earth magnets. In a press release, the company said it secured a $620 million loan from the Department of War, previously known as the Department of Defense, to build a 10,000 metric tonne magnet facility.
The Commerce Department will also provide $50 million in incentives from the CHIPS and Science Act, along with an additional $50 million in equity. The company said it has raised more than $550 million in private capital.
“Our investment in Vulcan Elements will accelerate U.S. production of rare earth magnets for American manufacturers,” Commerce Secretary Howard Lutnick said. “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.”
ReElement Technologies, a company that recycles and processes rare-earth materials, is also part of the deal, through which it will receive an $80 million loan from the Office of Strategic Capital. The Department of War will also receive a warrant for both companies.
“As a former Navy officer, I am honored by the trust that the American government and American people have placed in Vulcan Elements,” Vulcan Elements CEO John Maslin said in a press release.
“Now more than ever, we remain focused on execution and performance, so that we can deliver a capability that the nation urgently needs. Vulcan Elements and ReElement Technologies already have a record of strong collaboration, and I look forward to continuing to work together as we move forward into this next phase of our partnership,” Maslin added.
As part of its broader effort to build a domestic minerals supply chain, the Trump administration has signed agreements with countries such as Australia to diversify the supply.
The administration also took a direct stake in MP Materials to create a rare earth magnet supply chain by constructing the company’s second U.S. magnet facility.
The federal government also acquired a 5% stake in Canadian company Lithium Americas, which is developing a lithium mine and processing plant in Nevada, and a 7.5% stake in Vancouver-based Trilogy Metals, which operates mines in Alaska.
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The Vulcan Elements deal follows Trump’s recent agreement with Chinese President Xi Jinping over China’s export controls. China agreed to pause its recent export controls on five rare earths, but did not address earlier restrictions placed in April on seven other rare earths.
According to the U.S. Geological Survey, between 2020 to 2023, the U.S. imported nearly 56% of its rare earth compounds and metals from China.
