The US Department of Defense’s Office of Strategic Capital has issued a conditional loan commitment of $500 million to Phoenix Tailings, a company focused on rare earth element processing. The deal is designed to do something the US has talked about for years but struggled to execute: actually build domestic capacity for the minerals that power everything from fighter jets to electric vehicles.
When combined with private capital, the total funding package is projected to hit roughly $1 billion. That money will go toward scaling Phoenix Tailings’ existing facilities and, more importantly, building a new rare earth separation and metallization plant on US soil.
The loan to Phoenix Tailings is conditional, meaning it still has to clear standard due diligence across financial, legal, and technical domains before reaching financial close.
This isn’t happening in a vacuum. The US government has been methodically assembling a portfolio of rare earth bets. MP Materials, which operates the only active rare earth mine in the US at Mountain Pass, California, has received federal backing. USA Rare Earth has also landed funding commitments. The government has simultaneously expanded its strategic stockpiling efforts and issued additional loans aimed at bolstering domestic mineral processing.
