Pentagon lends $700 million to Vulcan, ReElement for rare earth magnets
The US Department of Defense agreed to lend $700 million to producers of rare earth magnets in a bid to increase domestic production of materials used in consumer electronics and weapons.
The conditional loan package is made up of $620 million to Vulcan Elements Inc. and $80 million to ReElement Technologies Corp. to lift production of magnets made from neodymium, iron and boron, the Pentagon said in a statement Friday. The Department of Commerce will take a $50 million equity stake in Vulcan.
It’s the latest in a string of US funding as the Trump administration looks to loosen China’s grip on supply chains for key elements used in military hardware, electric vehicles and wind turbines.
With the funding, Vulcan and ReElement expect to produce as much as 10,000 metric tons of the magnet material over the next several years.
ReElement separates and refines rare earths from mined concentrate and waste or recycled materials, producing oxides that are used to make metal for magnets. Vulcan supplies magnets in the US for defense and commercial production.
(By Jacob Lorinc)
US reopens $500M tender as cobalt prices soar
The US Defense Department will reissue an updated tender for up to $500 million worth of cobalt by end-November 2025, with an award expected in early February 2026, according to Argus News.
The Defense Logistics Agency first sought offers in mid-August for up to 7,500 tons of cobalt over the next five years, but in mid October cancelled the tender due to “outstanding issues with the Statement of Work” after interested parties missed several deadlines.
The DLA was seeking offers for alloy-grade cobalt from three producers: units of Vale SA in Canada, Sumitomo Metal Mining Co. in Japan and Glencore Plc’s Nikkelverk plant in Norway. It asked suppliers to propose fixed prices for the supplies over five years and there was one amendment last month excluding one brand from Vale, Bloomberg News previously reported.
A surge in supply from the Congo, responsible for 80% of the world’s cobalt output, coupled with cooling demand from the electric vehicle market, saw cobalt prices sink to historic lows at the start of 2025.
Copper production in the DRC increased by nearly 40% last year and in October Kinshasa began implementing a quota system to replace a ban announced in February. Allowed base volumes of 87,000 tonnes per year is around half total exports registered in 2024.
Cobalt consumption in EV batteries overtook other sources of demand like aerospace alloys several years ago and the downstream impact of the DRC strategy has been swift.
The price of cobalt sulphate entering the EV battery supply chain in China is now trading 335% higher than at the start of the year, averaging $11,932 tonne in October which translates to a price of $58,200 on a 100% cobalt content basis. That remains far off the March 2022 peak of more than $90,000 per tonne, however.
Cobalt prices would likely remain elevated and could rise further under the quota scheme put in place for 2026 and 2027 and will be further supported if the US government does re-enter the market for the first time since 1990.
The CEO of the world’s number one producer of cobalt, China’s CMOC Group, warned last month that cobalt at these levels could lead to demand destruction and substitution, although that has been a long-running trend for cobalt users.
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