US, Vulcan Elements ink deal to boost rare earth magnet supplies

Nov 3 (Reuters) - Vulcan Elements has struck a partnership with the U.S. government and ReElement Technologies to expand domestic rare earth magnet production, the latest effort to secure supplies of critical minerals and cut reliance on China.

North Carolina-based Vulcan said it would build and operate a 10,000-metric-tonne magnet facility in the U.S. with investments from the Pentagon and a $50 million investment from the Department of Commerce under the Chips Act in exchange for a stake.

The financing will include a $620 million direct loan from the Pentagon's Office of Strategic Capital and $550 million in private capital.

ReElement Technologies, a U.S.-based refiner of rare earth and critical minerals, will receive a $80 million direct loan from the Office of Strategic Capital matched by private capital to expand its recycling and processing capabilities.

Rare earth magnets are used to make motors in electric vehicles, wind turbines, hard disk drives, as well as medical devices like MRI machines.

Earlier this year, Vulcan agreed to buy a supply of critical minerals from ReElement that will be sourced outside of China for five years, beginning in 2026.