The Trump administration announced a $1.4 billion deal Monday to establish a fully domestic rare-earth magnet supply chain, marking one of its largest strategic investments aimed at ending American reliance on Chinese critical minerals. The partnership with Vulcan Elements and ReElement Technologies seeks to secure the rare-earth components vital for national defense, energy, and high-tech manufacturing.
The deal includes a $620 million direct loan to Vulcan Elements from the Department of War’s Office of Strategic Capital to build a U.S.-based facility producing 10,000 metric tons of magnets annually. The Commerce Department is also investing $50 million in the project through the CHIPS and Science Act, with private investors adding another $550 million.
ReElement Technologies, which specializes in processing and recycling rare-earth materials, will receive $160 million in combined public and private funding. The federal government will hold a $50 million equity stake in Vulcan and receive share warrants in both companies.
Commerce Secretary Howard Lutnick emphasized the national security focus: “We are laser-focused on bringing critical mineral and rare-earth manufacturing back home.” The initiative responds directly to China’s export restrictions on rare-earth materials, which were tightened earlier this year to block defense-linked exports.
The project is led by former Navy officer John Maslin, who said Vulcan Elements will deliver a capability the nation “urgently needs.” Vulcan recently launched its first manufacturing site and raised $65 million in private capital.
China controls the global supply chain for rare-earth magnets—key components in jet fighters, satellites, EVs, and AI systems. The U.S. has struggled to compete due to Beijing’s dominance in mining, processing, and manufacturing. But with rising geopolitical tensions, the Trump administration has increasingly pursued equity stakes and strategic funding in critical sectors. This latest move follows previous government stakes in MP Materials, Intel, Nvidia, and AMD.
The partnership also builds on Vulcan and ReElement’s August agreement to create a vertically integrated supply chain. ReElement will process end-of-life electronics and waste into rare-earth oxides, which Vulcan will convert into finished magnets.
While final terms are pending, the announcement signals a major leap in U.S. industrial policy, with both the Department of War and Commerce betting heavily on reshoring strategic manufacturing.
