Mentioned:
The Pentagon is ramping up their focus on domestic sources of supply of rare earth elements for national security. Which is exactly why they’ve just done a new deal with REalloys.
What’s happening:
- The United States Defense Logistics Agency has awarded REalloys (NASDAQ: ALOY) a new contract to design a modular plant to produce samarium and gadolinium metal for rare earth magnets located in Ohio
Why it matters:
- Both samarium and gadolinium metal are critical inputs for high temperature rare earth magnets that are used in permanent magnets for defense and military equipment
Going deeper:
- The new contract from the United States Defense Logistics Agency has two phases over the next two years and REalloys has publicly stated they are aiming to process 300 metric tonnes annual of samarium and gadolinium into metal form
- REalloys has also publicly stated that they are the first company located in America that is capable of re-establishing domestic production of samarium and gadolinium metal at commercial scale, which the United States government has previously relied entirely on foreign countries for supply
The intrigue:
- This is not the first time REalloys has won support from the United States government, previously landing a $200M USD letter of interest from the Export-Import Bank of the United States for debt financing
