(Reuters) – The U.S. government on Thursday signed a $725 million conditional loan commitment with Energy Fuels to boost domestic processing of rare earth elements as part of its efforts to reduce reliance on China.
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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.
The U.S. Department of Defense has been renamed to the Department of War by President Donald Trump.
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.
Such magnets are used to make motors in electric vehicles, wind turbines, hard disk drives, and medical devices such as MRI machines.
Energy Fuels must fulfill financial, legal, technical and other due diligence requirements, as part of the conditional loan agreement, the OSC said, without elaborating on the requirements.
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,” the OSC said.
Reporting by Mike Stone in Washington and Nandan Mandayam in Bengaluru; Editing by Shinjini Ganguli
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