The US Department of Defense is offering a $1.25 billion conditional loan to speed up the constructions of rare earth establishments. In 2025, it has made a major investment in the California rare earth company MP Materials to spur the establishment of rare earth supply chain with $550 million.
Among the $1.25 billion loan, Phoenix Tailings will receive $500 million for its facility that produces the rare earth metals. Energy Fuels will receive $725 million for its facility that focuses on rare earth oxide separation and metallization.
Rare earth is crucial for magnets used in defensive purposes such as jet engines, electric drone motors, and radar systems. In order to make them, mixtures of rare earths must be separated into individual oxides and then reduced to metals. The metals are then alloyed with other more readily available metals to form magnets.
Phoenix Tailings is also developing new technology to separate mixture of rare earths into oxides. Energy Fuels plans to extract the rare earths from monazite. This mineral has imposed a challenge for other rare earth miners because it contains uranium and thorium. However Energy Fuels claims that it has the infrastructure and capabilities to handle radioactive by-products.
Experts has commented that it is difficult for firms to improve both rare earth separation and metallization technologies at the same time.