The Office of Strategic Capital (OSC), part of the US Department of War (DoW), has disclosed a conditional commitment to provide a $500m loan to Phoenix Tailings.
The loan is intended to help expand the company’s rare earth element processing operations within the country.
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The OSC’s funding, combined with further private investment, is expected to total around $1bn.
This financing aims to significantly increase the production of critical metals at current sites and to establish a new rare earth separation and metallisation facility in the US, known as the Freedom Facility.
Once operational, the planned facility will handle multiple types of raw materials to produce both light and heavy rare earth metals used in US industry, defence and allied supply networks.
The project focuses on the midstream portion of the rare earth supply chain, which connects sources such as mines and recycling operations to manufacturers and end users.
Midstream processing has been identified as a key bottleneck in the production of rare earths in the US, with most refining of these materials currently taking place overseas.
The Freedom Facility intends to ease this constraint by offering extensive separation and metallisation capabilities to a range of suppliers and customers including recyclers, manufacturers and government bodies.
It will process inputs such as concentrates, recycled feedstocks and secondary materials, aiming to enhance supply chain resilience and adaptability.
Under-secretary of War for Research and Engineering Emil Michael said: “I applaud the Office of Strategic Capital on this important conditional investment, which advances the reshoring of rare earth supply chains and strengthens the might of America’s defence industrial base.
“The focused, unified effort and support from Secretary Hegseth and Deputy Secretary Feinberg have been crucial in addressing supply chain shortages and vulnerabilities in the defence industrial base.”
The facility is set to use technology and intellectual property developed and controlled within the US, with the goal of reducing dependence on foreign-controlled supply chains.
Scheduled to begin operations in 2028, the site will rely on Phoenix Tailings’ platform, which is based on proprietary chemistry, specialised industrial equipment and digital tools.
As part of the agreement, Phoenix Tailings must complete additional financial, legal, technical and due diligence steps before the loan can proceed to final closing.
The company presently runs metallisation sites in Burlington, Massachusetts, and Exeter, New Hampshire.
Phoenix Tailings co-founder and CEO Nicholas Myers said: “Every team member at Phoenix Tailings understands the responsibility entrusted to us. We know what is at stake and we know that failure is not an option.
“This mission is bigger than any one company. It is about strengthening American industry, securing critical supply chains and ensuring our nation has the resources it needs to thrive.
“To the American people: you have our word that we will work tirelessly to achieve that mission, and we will not let you down.”
