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Jun. 18, 2026 10:27AM PST
The Pentagon's loan to Phoenix Tailings marks a pivotal step in reshoring rare earth processing.
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The US Department of War’s Office of Strategic Capital has issued a US$500 million conditional loan commitment to Phoenix Tailings, anchoring a US$1 billion public-private initiative to build a domestic rare earth separation and metallization plant.
Dubbed the "Freedom Facility", the project aims to close a midstream bottleneck in the supply chain for permanent magnets, defense systems, and advanced manufacturing.
The joint funding combination pairs the US$500 million in long-term government debt financing with private capital, with initial operations targeted for 2028.
Phoenix Tailings, which currently operates processing facilities in Burlington, Massachusetts, and Exeter, New Hampshire, specializes in rare earth midstream processing.
This segment connects feedstock producers, such as mines and recyclers, with downstream magnet manufacturers and industrial end-users.
"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.
The proposed Freedom Facility is designed to handle multiple feedstock varieties, including chemical concentrates, recycled materials, and secondary sources.
Company executives stated the plant will utilize domestically controlled technology and intellectual property to limit exposure to foreign entities.
Defense administrations have increasingly prioritized reshoring critical metal capabilities to shield the domestic industrial base from trade disruptions.
“This mission is bigger than any one company. It is about strengthening American industry, securing critical supply chains, and ensuring our nation has the resources it needs to thrive,” said Phoenix CEO and co-Founder Nicholas Myers in a company press release.
In this episode of the Investing News Network podcast Katie Durham, CEO and co-founder of Supra Elemental Recovery, discusses her company's technology for recovering high-purity critical minerals from domestic waste streams using a non-toxic, reusable extraction process.
G7 pledge targets supply chokeholds
At the recently held Group of Seven (G7) summit in France, the US and its allies issued a joint declaration pledging to ensure that no single external nation can supply more than 60 percent of rare earth and permanent magnet imports by 2030.
The leaders of the US, UK, Canada, France, Germany, Japan, and Italy stated their ambition to lower that threshold to 50 percent "as soon as possible".
China currently commands nearly 70 percent of global rare earth production and 95 percent of permanent magnet manufacturing. A United Nations (UN) trade report published in June noted that the US, Japan, and the EU together import more than half of the world's rare earth magnets, primarily relying on Chinese suppliers.
China is scheduled to reinstate export controls on defense-critical rare earths on November 10, concluding a yearlong truce established after a series of reciprocal tariffs sparked global trade friction.
The UN found that China has enacted 16 distinct trade restrictions on critical energy transition materials since 2020. According to an International Energy Agency (IEA) report, fully implemented Chinese export controls could place up to US$6.5 trillion of economic activity outside of China at risk annually.
The G7 summit also marked the establishment of a non-binding G7 Critical Minerals Resilience and Production Alliance to track stockpiles and coordinate supply-crisis data with the IEA.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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Giann Liguid is a graduate of Ateneo De Manila University with an AB in Interdisciplinary Studies. With a diverse writing background, Giann has written content for the security, food and business industries. He also has expertise in both the public and private sectors, having worked in the government specializing in local government units and administrative dynamics.
When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.
When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.
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Giann Liguid is a graduate of Ateneo De Manila University with an AB in Interdisciplinary Studies. With a diverse writing background, Giann has written content for the security, food and business industries. He also has expertise in both the public and private sectors, having worked in the government specializing in local government units and administrative dynamics.
When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.
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