Trump administration announces $1.2 billion for rare earths in three days

The Donald Trump administration announced, within three days, loan commitments totaling US$1.25 billion to expand the domestic rare earth processing chain in the United States.

The announcements were made by the Office of Strategic Capital, a body linked to the US Department of War and focused on mobilizing capital for sectors considered strategic by the American administration.

The first commitment, announced on Tuesday (16), was signed with Phoenix Tailings and provides for a conditional loan of US$500 million. According to the official statement, the amount should be added to additional private capital to facilitate around US$ 1 billion in investments.

Two days later, last Thursday (18), the War Department announced a new commitment, this time worth US$725 million, with Energy Fuels, a company historically associated with uranium production, but now also in the rare earths market.

In both cases, the declared objective is to expand the American capacity for separation and metallization of rare earths, a step considered critical between mineral extraction and the production of permanent magnets.

This intermediate link in the chain is seen as one of the main bottlenecks in Western industry. It is not enough to have access to ore or concentrate. To reach magnets used in defense equipment, electric vehicles, wind turbines and high-tech industrial products, it is necessary to master the stages of separation, refining, metallization and component manufacturing.

In the case of Phoenix Tailings, the resources must support the expansion of critical metals production in existing facilities and the construction of a new rare earth separation and metallization facility in the United States.

The company currently operates two metallizing facilities, located in Burlington, Massachusetts, and Exeter, New Hampshire. The War Department states that the company operates precisely in the link that connects the extraction of raw materials to the production of permanent magnets.

"Supporting domestic processing of critical minerals and rare earths is a central focus of the Office of Strategic Capital, and the intermediate rare earth processing capabilities represented by Phoenix Tailings are key areas of shortages that need to be addressed quickly," said David A. Lorch, director of the Office of Strategic Capital.

According to him, support for the company represents a step towards strengthening the "mine-to-magnet" chain in the United States, an expression used by the American government to refer to the integration of the mine-to-magnet chain.

Energy Fuels should use the support to expand its operations in the separation and metallization of rare earths. The company operates the White Mesa Mill in Utah, where it maintains a uranium processing and rare earth oxide separation facility.

According to the War Department, Energy Fuels' entry into this stage of the chain represents a response to a national bottleneck that needs to be addressed quickly.

"Energy Fuels' expansion into intermediate processing of rare earths represents a key solution to a national bottleneck that needs to be addressed quickly," Lorch said in the release.

Despite the high values, the resources still do not represent an immediate disbursement. Both commitments are conditional. This means that companies still need to complete financial, legal, technical and other due diligence requirements before definitively closing the loans.

The statements frame the investments as part of a national security priority. The US government's assessment is that expanding domestic processing capacity is necessary to reduce vulnerabilities in the US industrial base and ensure a more resilient supply chain.

The announcement reinforces the United States' strategy of reducing dependence on chains dominated by China. Beijing still concentrates a relevant part of the global capacity for separation, refining and processing of rare earths, in addition to having a dominant position in the production of permanent magnets.

The American offensive also shows that the global dispute is no longer focused solely on access to mineral reserves. Increasingly, strategic control is in the industrial stages that transform raw materials into inputs for defense, energy, technology and electric mobility.

Source: CNN