US signs $725M loan with Energy Fuels to expand rare earth production

Energy Fuels has been expanding domestic production of heavy rare-earth materials, including terbium and dysprosium oxides, at its facilities in the United States.

The U.S. government has signed a $725 million conditional loan commitment with Energy Fuels Inc.to accelerate the domestic processing of rare earth elements.

The latest agreement is a strategic move to strengthen the U.S. critical minerals supply chain and reduce reliance on foreign sources, particularly China, which currently dominates global rare earth processing as part of its efforts to reduce reliance on China.

The main purpose of the pact is to bolster domestic capacity for separating and producing rare earth elements.

These include the 17 essential elements required for high-tech industries, including electric vehicles (EVs), smartphones, clean energy technology, and defense systems.

Why it matters?

Energy Fuels, which specializes in uranium production, will expand its operations into rare earth separation and metallization, which is crucial for the production of permanent magnets, the U.S. Department of War's Office of Strategic Capital (OSC) said in a release.

Over the last year, several countries, including the U.S., have stepped up investments in rare earth mining and processing following China's move to curb exports ‌of rare earth magnets.

The OSC said the company's increased production of rare earth magnets "will directly support permanent magnet facilities across the broader U.S. industrial base and improve supply chains for other specialty defense and industrial products."

Such magnets are used to make motors in electric vehicles, wind turbines, hard disk drives, and medical devices such as MRI machines.

Importantly, the OSC said, Energy Fuels must fulfill financial, legal, technical and other due diligence requirements, as part of the conditional loan agreement.