REalloys, U.S. Critical Materials sign MoU to build domestic rare earth supply chain

April 1 (Reuters) - Rare earths developers REalloys ALOY.O and U.S. Critical Materials Corp have signed a memorandum of understanding to build a fully domestic supply chain for the key materials in the U.S., in line with Washington's aims to reduce reliance on China.

Under the agreement, REalloys will secure up to 10% offtake from the U.S. Critical Materials-owned Sheep Creek rare earth deposit in Ravalli County, Montana.

The U.S. has been escalating efforts to reduce dependence on China for the critical materials, such as instituting tighter procurement rules, prompting a rush among miners and processors to build domestic rare earth supply chains.

The Sheep Creek deposit contains high concentrations of elements such as dysprosium and terbium, which are used to power high-performance permanent magnets in F-35 fighter aircraft, missile guidance systems and radar platforms, the companies said.

"We are identifying the strategic assets that plug into our advanced midstream and downstream ecosystem to fortify supply chain security for protected and strategic markets, with zero Chinese involvement at any stage," said Lipi Sternheim, CEO of REalloys.

REalloys and U.S. Critical Materials also said they would advance test work to improve heavy rare earth processing and seek to finalize a long‑term offtake deal within one year.