US Office of Strategic Capital — $700m Conditional Loan Commitment to Vulcan Elements and ReElement Technologies for Domestic NdFeB Magnet Production

Mechanism

The Office of Strategic Capital, a Department of War financing vehicle created to crowd in private capital for supply chains deemed critical to national security, agreed a joint conditional loan commitment with two domestic rare-earth magnet producers: Vulcan Elements ($620m) and ReElement Technologies ($80m). The loans are structured to fund the separation, metal-making and finished-magnet stages of the NdFeB supply chain — the segment where the US has essentially zero domestic capacity today and China holds an estimated 90%+ share of global refined output and finished-magnet manufacturing. Vulcan Elements' own announcement (3 November 2025, Washington DC) frames the government loans as one tranche of a $1.4bn total package alongside $550m+ of matched private capital and a separate $50m Department of Commerce CHIPS Act equity stake — the latter is filed as a companion action. In exchange for the loan, the Department of War receives warrants in both companies, giving the government upside exposure alongside the credit risk.

Severity is set at 4 (quant): a disclosed $700m loan quantum, a disclosed production target (10,000 tonnes/year of NdFeB magnet material — a meaningful fraction of estimated US demand), and the strategic significance of a first-of-kind US government direct-loan program targeting the fully vertically-integrated magnet supply chain (mining agnostic — both firms are process/refining plays, not mine developers) rather than upstream mining alone.

Downstream implications

• First large-scale US government financing of NdFeB magnet

manufacturing capacity (as opposed to upstream rare-earth mining, e.g. MP Materials), closing a supply-chain gap the US has lacked since domestic magnet production wound down in the 1990s-2000s.

• Establishes OSC as an active co-financier (via conditional loan +

warrants) in critical-minerals processing, a template likely to recur for other 2026 OSC deals given the >$100bn critical-minerals financing authority under the One Big Beautiful Bill Act cited in coverage of this deal.

• Warrants taken by the Department of War mirror the equity-stake

structure used in the companion Commerce/Vulcan CHIPS deal — reinforces the 2025-26 pattern of US industrial policy shifting from pure subsidy to government-as-shareholder.

Open questions

• Disbursement conditions and timeline for the $700m — coverage

describes the commitment as "conditional," pending finalized diligence as of the November announcement.

• Whether OSC discloses further magnet-sector loans (e.g. to other

known rare-earth midstream players) under the same critical- minerals financing authority.