WASHINGTON —The Pentagon’s Office of Strategic Capital (OSC) inked a pair of conditional loans totaling $1.2 billion this week within the rare earth elements sector, according to department announcements.
Today the department announced it has singed a $725 million conditional loan with Denver-based Energy Fuels — a company specializing in uranium production — to support the buildout of a new, US-based rare earth separation and metallization facility.
“The company’s increased production will directly support permanent magnet facilities across the broader US industrial base and improve supply chains for other specialty defense and industrial products,” the department wrote in the announcement.
The agreement “specifies customary additional steps that the company must take to proceed toward financial close on the loan, including fulfilling financial, legal, technical and other due diligence requirements.”
In a separate release, Energy Fuels wrote that it plans to use the funds to support its current processing capabilities at its White Mesa Mill in Utah and build out the new rare earth metals and alloy facility at an undisclosed location. The company said it has 20 years to repay the loan.
Energy Fuels wasn’t the only company to receive a OSC loan this week. On Tuesday, the Defense Department announced it has signed a $500 million conditional loan with Phoenix Tailings for a new “Freedom Facility,” envisioned to support the mine-to-magnet supply chain.
In that case the company said the goal is to open the new facility by 2028 to process both “light and heavy” rare earth minerals.
The second Trump administration’s push on the rare earth mineral front comes as part a larger effort to shore up the supply of materials used in the production of future weapons that range from fighter jets to precision munitions.
Speaking Tuesday at a Center for a New American Security event, Michael Cadenazzi, the Assistant Secretary of Defense for Industrial Base Policy said the administration is doing it “because we have to.”
“You can dream all day long about scaling [weapons production but] if you don’t have germanium, gallium, and rare earths, it is a pipe dream,” Cadenazzi told the audience. “And so you’ve seen the commitment from leadership, from the White House on down, to find ways to operate at scale, and I think that’s really the difference between our previous work in minerals.”
However, some of the administration’s funding moves have drawn scrutiny from lawmakers.
Back in February, for example, some Senate Democrats voiced concerns ranging from legality to questions about future competitions over the Pentagon’s equity deal with MP Materials. In July 2025, the administration announced a 10-year public-private partnership between the government and company where DoD agreed to purchase $400 million of a newly created series stock. In return, MP Materials said it would accelerate the build-out of an end-to-end magnet supply chain, aimed at reducing US dependency on foreign suppliers.
“I have questions about the legal basis, financial terms and strategic rationale for these transactions,” the top Democrat on the Senate Armed Services Committee, Sen. Jack Reed said during a February hearing, specifically citing the Antideficiency Act. “The legal basis, in particular, appears questionable.”
