Pentagon doubts over rare earths deal provoke White House clash
The Pentagon is weighing whether to scrap an $80 million conditional loan offer to rare earths refiner ReElement Technologies Corp., touching off a clash with the White House over an agreement that was meant to help break China’s chokehold on critical minerals.
The Pentagon’s Office of Strategic Capital announced the agreement with ReElement in November. Since then, officials vetting the company have raised doubts about its ability to scale its technology, as well as its long-term revenue forecasts, according to people familiar with the process.
The ReElement deal hasn’t been canceled and may still go ahead, according to the people, who asked not to be identified discussing matters that aren’t public. At the time the agreement was announced, the Pentagon made clear that ReElement still needed to undergo due diligence before getting any money. The Pentagon hasn’t disbursed the loan yet, according to one of the people.
The deal, part of a bigger $1.4 billion critical minerals agreement that also included Vulcan Elements Inc., was heralded as part of the Trump administration’s multibillion-dollar drive to develop domestic production of rare earth elements. They are used in products from microwave ovens to missiles and have become a key source of Chinese leverage in trade talks with the US.
The administration has employed a variety of financial tools in the effort including offering loans and taking equity stakes and warrants to buy stock in many of the companies involved. It’s emphasized the need to move fast and make big bets given the severity of the problem.
The desire to act quickly and conduct rigorous vetting has spurred tension with the White House.
Shortly after Bloomberg News contacted ReElement for comment, Peter Navarro, the White House senior counselor for trade and manufacturing, reached out independently to Bloomberg to criticize the Pentagon’s handling of the deal.
“The due diligence cops within OSC with a private equity background have no experience how to manage a crisis at warp speed,” Navarro said, referring to the Pentagon’s Office of Strategic Capital.
“Their over-burdensome due diligence disproportionately penalizes small innovative emerging companies,” he said. “ReElement represents exactly the kind of asymmetric bet we should be making.”
Pentagon spokesman Sean Parnell called the team overseeing the agreements “the finest private equity dealmakers in the world, professionals whose unmatched expertise and qualifications stand second to none.”
The Office of Strategic Capital “expertly balances lightning speed with rigorous diligence to close high-impact deals that directly strengthen America’s defense and empower our warfighters,” Parnell said. The critical-minerals effort is being overseen by Deputy Defense Secretary Stephen Feinberg, the private equity billionaire who co-founded Cerberus Capital Management.
A White House official, speaking on condition of anonymity, said the administration is working together — as well as with private industry — on the matter. The official praised ReElement as one of many great emerging companies working with the government.
Mark Jensen, ReElement’s chief executive officer, declined to address questions about the loan but said the company is proud to partner with the government. He said the company is going ahead with a facility in Indiana to refine critical minerals and produce rare earths oxides.
“From ReElement’s perspective, we confirm that our work with the US government is ongoing,” Jensen said. “Nobody else in the country can or has produced the products we produce today at ReElement which are needed for defense, commercial and the energy transition.”
When the Pentagon announced the deal, it said it would get warrants in Vulcan and ReElement.
But it also cautioned that the loan agreement specified steps Vulcan and ReElement must take to fulfill “financial, legal, technical, and other due diligence requirements.”
It was unclear if the Pentagon ever received warrants for ReElement or Vulcan. ReElement didn’t respond to inquiries about the warrants. Vulcan didn’t respond to a request for comment.
According to the agreement, ReElement was to produce high-purity rare earth oxides from electronic waste and end-of-life magnets. Vulcan would then manufacture new magnets from those oxides. The Pentagon earlier said the companies anticipated producing up to 10,000 metric tons of magnet materials in the next several years.
It’s unclear if Vulcan will need to find a new supplier of the oxides if ReElement doesn’t get the loan. Two of the people familiar with the matter said pulling funds from ReElement wouldn’t affect Vulcan’s deal.
Even with the caution about due diligence, the government’s plan amounted to an early vote of confidence in ReElement, which has yet to produce oxides at scale. At a critical minerals summit in February, the State Department touted how the deal had “crowded in” an additional $200 million in private funding for ReElement.
That appeared to be a reference to ReElement having secured $200 million in strategic equity from Transition Equity Partners, an agreement announced in January. Transition Equity cited ReElement’s “collaboration” with the government. TEP didn’t respond to a request for comment.
While the Pentagon has only announced a small number of deals aimed at locking down critical supply chains, the potential ReElement loan is among hundreds of tie-ups the agency is currently considering, according to one of the people familiar with the matter.
In September, the Pentagon’s industrial buildout program, known as IBAS, made a two-year $2 million investment in ReElement.
ReElement was until last year a subsidiary of Nasdaq-listed American Resources Corp. It described ReElement in an October 2025 filing as being in a “pre-revenue development stage.”
(By Joe Deaux and Kate O’Keeffe)
AML awarded $2M US defense contract for domestic heavy magnets
Advanced Magnet Lab (AML) has been awarded a $2 million Defense Logistics Agency (DLA) contract for the qualification of domestically made high-grade sintered NdFeB (neodymium-iron-boron) magnets.
The Florida-based, privately held company said it will use the funds to develop manufacturing solutions for domestic production and qualification of sintered permanent magnets for defense and commercial industries — with plans underway to rapidly scale manufacturing across end-use applications.
AML said it has longstanding work with US government agencies, including the Department of War and Department of Energy, for permanent magnet-based solutions and manufacturing.
The award is facilitated by a two-year contract with the DLA for supply chain management, alloying, and permanent magnet manufacturing, including alloy composition optimization for NdFeB magnet grades such as N48SH and N35EH by implementing advanced manufacturing techniques.
AML said its novel manufacturing process, PM-Wire, simplifies the production of permanent magnets, while expanding the possibilities for magnet design, materials, and performance characteristics, the company said, adding that the process is built for rapid industrialization within an existing magnet making framework.
In addition to sintered NdFeB permanent magnets, the company is developing permanent magnets with other magnet materials and alloys, including samarium iron nitride (SmFeN), manganese bismuth (MnBi), anisotropic NdFeB and (Mischmetal-Nd) FeB.
AML said its approach with (Mischmetal-Nd) FeB allows for permanent magnets with less critical rare earth elements and clear traceability of inputs for end-use customers.
The company is currently collaborating with a group of US and European rare earth suppliers and innovators, including Phoenix Tailings, a Massachusetts-based rare earth metals producer, Ionic Rare Earths, a miner, refiner and recycler of traceable magnet and heavy rare earths, and Momentum, a Dallas, Texas-based critical minerals processing company.
“We are at a true turning point for the US rare earth magnet industry, and AML is immensely proud to be partnering with the US government, the defense industry and supply chain partners to meet the problem head-on,” AML president Wade Senti said in a news release.
BHP urged to assess rare earths at Olympic Dam
BHP (ASX: BHP) must assess whether rare earths and other critical minerals at its Olympic Dam mine complex can be commercially produced under a new agreement with South Australia signed this week.
The pact is part of a broader plan aimed at unlocking as much as $16.7 billion in investment in the state’s copper sector.
South Australia Premier Peter Malinauskas on Tuesday tabled a revised 78-page “indenture agreement” in parliament, marking the first overhaul in nine years of the legislative regime governing the Olympic Dam copper, gold and uranium operation.
The revised framework adds new obligations requiring BHP to study the recovery of minerals deemed critical or strategic by Canberra, including rare earth elements such as neodymium and praseodymium used in magnets for electric vehicles and wind turbines.
The world’s largest miner must submit a report within two years outlining whether those minerals can be commercially extracted. If they are judged technically or economically unviable, BHP must allow third parties an opportunity to commercialize them.
The updated arrangement also clears the way for BHP to consider a $4 billion expansion of the Olympic Dam copper refinery near Roxby Downs, with additional investment decisions worth as much as $12.7 billion by 2032 for mine and concentrator expansions across the state.
“This milestone agreement enables South Australia to deliver on the promise of a world-class copper province,” South Australian Infrastructure and Energy Minister Tom Koutsantonis said. “The pathway to a net zero future requires copper, and South Australia can play a transformative role as a major supplier to a world that is desperate for strategic and critical minerals.”
Olympic Dam, primarily a copper operation, also produces gold, silver and uranium as byproducts. The orebody contains another 131 minerals, including rare earth elements, that are currently discarded in waste streams because of their low concentrations.
Interest in those materials has surged as governments in Australia and the US intervene to support critical minerals supply chains and reduce reliance on China.
Doubling down on copper
BHP is considering doubling copper output in South Australia to 650,000 tonnes annually by the mid-2030s. Olympic Dam has consistently produced more than 300,000 tonnes of copper a year over the past three years and it’s considered central to BHP’s long-term growth strategy and Australia’s ambitions to remain a leading copper supplier for the low-carbon transition.
“We commend the South Australian Government for its leadership in making this indenture update happen, as well as for its strong long-term support for the mining industry,” BHP CEO Mike Henry said. “More efficient approval pathways and stable regulatory settings give us the confidence to invest and continue building South Australia’s world class copper province.”
Copper SA, BHP’s South Australian division, operates Olympic Dam alongside the Prominent Hill and Carrapateena mines, acquired through its A$9.6 billion takeover of OZ Minerals in 2023.
Exploration at Oak Dam could eventually support a fourth operation in the province. Combined with Escondida in Chile, BHP controls the world’s largest known copper resources.
The company produced more than two million tonnes of the metal in fiscal 2025, up 28% over three years, and expects output of 1.9 million to 2 million tonnes in fiscal 2026.
BHP has repeatedly floated and shelved Olympic Dam expansion plans over the past 15 years as costs, market conditions and technical challenges shifted.
The revised pact also addresses long-running concerns over water use. BHP must submit a plan by May 2031 detailing how it will end groundwater extraction from the Great Artesian Basin by May 2036.
The miner and the South Australian government are jointly advancing a seawater desalination project near Port Augusta to support plans to expand copper production over the next decade.
Arafura Rare Earths plans $250M share sale backed by Gina Rinehart
Australia’s Arafura Rare Earths said on Friday it plans to raise about A$350 million ($249.83 million) in a share placement backed by Gina Rinehart’s Hancock Prospecting to help fund its Nolans project.
The share placement plan comes a day after the miner approved the development of its $1.6 billion project in the Northern Territory, set to be Australia’s third-biggest rare earths operation by decade-end.
Arafura will issue shares worth about A$175.5 million at A$0.260 apiece in the initial tranche, representing a 16.1% discount to the stock’s last close on Thursday. A second tranche worth A$174.5 million is subject to shareholder approval.
“It’s a real positive and shows how serious investors and governments are about derisking global supply chains from Chinese control of rare earths,” said David Tuckwell, CIO at ETF Shares.
“The discount is effectively the cost of securing significant capital quickly with execution certainty.”
Hancock Prospecting, owned by Australia’s richest person Gina Rinehart and also Arafura’s largest shareholder, has committed to investing about A$85 million in the raising.
Upon completion of the fundraising, Hancock’s stake in Arafura will rise to roughly 17.5% from 15.5% at present.
Arafura said proceeds from the placement will fully fund the equity component required to develop the Nolans project.
The miner has secured financing commitments from export credit agencies in the United States, Canada, Germany and South Korea, among others, amid efforts by Western countries to diversify away from China.
The swift and seamless capital raise signals broad market confidence and marks a rare instance of the stock exchange minting a new mid‑tier miner, Tuckwell said, expecting the project to become one of the few large-scale rare earths operations outside China.
Arafura has now secured about 93% of its binding offtake target for neodymium-praseodymium (NdPr) oxide from the project, following recent supply agreements and support from export credit agencies.
Shares of the firm were on a trading halt.
($1 = 1.4010 Australian dollars)
(By Rajasik Mukherjee, Kumar Tanishk and Jasmeen Ara Islam Shaikh; Editing by Subhranshu Sahu)
Arafura approves $1.6 billion rare earth project
Arafura Rare Earths said on Thursday it had approved the development of its $1.6 billion Nolans project in Australia’s Northern Territory, which is set to be the country’s third-biggest rare earths operation by the end of the decade.
The project is designed to deliver 4,440 metric tons of neodymium-praseodymium (NdPr) oxide annually, targeting markets outside China amid growing demand for rare earths used in electric vehicles and wind turbines.
Arafura secured financing commitments from the export credit agencies of the United States, Canada, Germany and South Korea, alongside global trading houses and manufacturers as Western countries step up efforts to diversify away from dominant rare earths producer China.
Arafura will supply South Korean automakers Hyundai and Kia, Germany’s Siemens Gamesa RE, and commodity trader Traxys’ Luxembourg and US units.
Shares of Arafura rose as much as 13.6% to A$0.335 in their biggest intraday gain since March 11. The benchmark stock index was up 1.5%, as of 04:40 GMT.
Construction on the project, which has been in the making since the deposit was discovered three decades ago, will begin in September, with first production expected from mid-2029.
Arafura secured a $1.6 billion funding package including a significant buffer and is backed by Australia’s richest person, Gina Rinehart, whose Hancock Prospecting owns a 15.5% stake.
Raising global supply
Arafura will become Australia’s third-biggest rare earths producer after Lynas Rare Earths, the world’s largest producer outside China, which produced 6,600 metric tons of NdPr in the last financial year, and Iluka, which has 5,500 tons of NdPr capacity and is expected to start production next year.
Australia is pushing to be the top supplier of rare earths to its allies, and Arafura is slated to supply 500 tons of NdPr to the country’s strategic minerals reserve, which is set to be up and running by year-end.
The project itself is set to meet as much as 5% of world demand, according to Australian government projections.
“This announcement today is a really important step forward for the Australian rare earths industry,” Treasurer Jim Chalmers said.
“Rare earths are an absolutely golden opportunity for our country. This is essential to our economic security and to our national security.”
Arafura said engineering contractor Hatch has been engaged to support development.
The final investment decision came after a multi-year financing and offtake strategy.
($1 = 1.3988 Australian dollars)
(By Rajasik Mukherjee, Melanie Burton and Christine Chen; Editing by Subhranshu Sahu, Jamie Freed and Lincoln Feast)
Europe must break China’s grip on rare earths pricing to spur investment, sector body says
Europe must build its own pricing system for specialty metals and rare earths to reduce reliance on China and unlock investment in mining and processing, industry expert Bernd Schaefer of the EIT told Reuters on Wednesday.
China dominates critical mineral supply chains and sets prices through opaque domestic markets, leaving Western developers without clear benchmarks, complicating investment decisions and delaying already higher-cost projects in Europe.
The EU has a target to mine at least 10% of its annual requirements of strategic raw materials by 2030 and rely on a single third country for no more than 65% of its annual needs.
EIT Raw Materials, an agency partly funded by the EU, is collaborating with digital platform Metalshub, it said last month, to create a European index to foster innovation in new minerals mining, refining and recycling projects in the bloc.
Schaefer said it would, however, take time to create an index with representative prices. The index would aim to provide transparent, market-based price benchmarks for critical minerals traded outside China, giving investors clearer signals on profitability and helping underpin financing for new projects.
“My understanding is that this would require trading a volume of a minimum 10% of the traded volume (non-China)…depending on the raw materials,” Schaefer said. “What we are getting from China is neither representative nor, in strict microeconomic terms, a price,” Schaefer said.
Schaefer said an index could be broader than just Europe, with collaboration from other traders, such as in the United States, Australia, Canada or Britain.
It was difficult to say whether the EU would meet its critical mineral diversification goals due to a lack of transparent data on volumes and growth expectations, he said.
The EU announced its 3 billion euro RESourceEU action plan in December to speed up diversification of the bloc’s supply chains and reduce its overreliance on China.
Concrete action has been slow with the exception of a pilot joint EU stockpile led by Italy, France and Germany. The countries have shortlisted metals including tungsten and gallium as the first to go into storage.
Without building domestic processing and transparent pricing, Europe risks remaining dependent on Chinese benchmarks — and seeing any new raw material output flow straight back into China’s supply chain, Schaefer said.
(By Julia Payne; Editing by Elaine Hardcastle)
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