Rare-earth refiner Phoenix Tailings has received a conditional $500 million loan from the Pentagon’s Office of Strategic Capital for domestic rare earth midstream processing.
The commitment is part of a roughly $1 billion initiative to expand US capacity to separate and produce rare earths, a group of 17 elements used in products including smartphones, electric vehicles and fighter jets.
Phoenix Tailings specializes in rare earth separation and metallization, a technical midstream process that bridges the critical gap between raw extraction and permanent magnet production.
The Office of Strategic Capital is conditionally committing long-term debt financing toward the construction of a ‘Freedom Facility’, anchoring an approximately $1 billion comprehensive financing initiative to rebuild America’s rare earth industrial base.
Once operational, the facility will process diverse feedstocks to produce the light and heavy rare earth metals required by US industry, defense systems, and allied supply chains, Phoenix said.
The Freedom Facility is designed to address supply chain constraints by creating a large-scale separation and metallization capacity capable of serving mines, recyclers, manufacturers, and government entities.
The company currently operates two metallization facilities in Burlington, Massachusetts, and Exeter, New Hampshire.
The midstream rare earth supply chain is the critical link between feedstock producers such as mines and recyclers, downstream manufacturers, and end users.
American defense systems, advanced manufacturing, energy infrastructure, and consumer technology depend heavily on critical materials refined overseas — mainly in China, which dominates rare earth processing globally.
Establishing a domestic supply chain has become a national security imperative for the US and its allies.
“Supporting domestic processing for critical minerals and rare earths is a key focus for OSC, and the rare earth midstream processing capabilities that Phoenix Tailings represents are key shortage areas that need to be rapidly addressed,” David A. Lorch, Director of the Office of Strategic Capital said in a news release.
“We are pleased to support Phoenix Tailings in building the company’s Freedom Facility, which will represent an important step in strengthening the full mine-to-magnet supply chain in the United States,” Lorch said.
“By creating a midstream facility like this, we are empowering virtually every part of the market and rebuilding the rare earth sector as a truly collaborative industry,” Phoenix chief commercial officer Anthony Balladon said in a separate release.
“We will ensure end customers get access to the rare earth metals they urgently need, while helping mines and recyclers get up and running by purchasing their output, which would otherwise have to move through other nations. The Freedom Facility is designed to serve as the backbone of a resilient Western rare earth supply chain.”
The Freedom Facility will produce both light and heavy rare earth metals from a diverse range of feedstocks, including concentrates, recycled materials, and secondary sources.
Initial operations are targeted for 2028.
