Vulcan Elements lands $1.4B US government deal to build America's first large-scale rare earth magnet facility by 2027
Nov 5, 2025 with John Maslin
Key Points
- Vulcan Elements secures $1.4 billion from the Department of Commerce and Defense to build America's first large-scale rare earth magnet facility, targeting 10,000 metric tons annually by 2027.
- US demand for rare earth magnets is projected to reach 70,000 metric tons by 2030 against current domestic capacity below 500 metric tons, creating a critical strategic gap in defense and aerospace.
- China controls 94-98% of global finished magnet production despite mining only 55% of raw materials, making downstream processing the actual bottleneck Vulcan aims to address through recycling partnerships.
Summary
Vulcan Elements has secured a $1.4 billion deal with the US government to build America's first large-scale rare earth magnet manufacturing facility, with initial capacity targeted for 2027. The agreement involves both a loan component and an equity investment piece, with participation from the Department of Commerce and the Department of Defense, and has the backing of Secretary Hagel and Secretary Lutnick.
The facility is designed to produce 10,000 metric tons of rare earth magnets annually. To frame the urgency, US demand is projected to exceed 70,000 metric tons by 2030, against a current domestic production capacity of fewer than 500 metric tons. The gap represents a severe strategic vulnerability across defense, aerospace, drones, robotics, and AI infrastructure.
The founder, a former Navy supply chain officer, frames the core problem as a manufacturing deficit rather than a raw material shortage. China mines roughly 55% of global rare earth material but produces 94 to 98% of finished magnets, meaning the chokepoint is downstream processing, not mining. Vulcan is addressing this partly through a partnership with Re Element Technologies, which recycles end-of-life magnets and performs chemical separation into rare earth oxides.
Beyond magnets, the company sees significant supply chain gaps in drone motors, servo actuators, and a broader set of critical minerals including antimony, germanium, gallium, lithium, tungsten, and titanium. The deal was described as already deep in development before China's recent moves to restrict rare earth exports, suggesting the strategic groundwork predates the current geopolitical pressure.