U.S. Army selects REalloys to build rare earth processing facility at Tooele Army Depot

In 1937, the Army guarded the first shipments of a critical resource—U.S. gold—as it was transferred into Fort Knox.

Nearly 90 years later, Washington faces a similar situation with a very different resource.

The Army has selected REalloys (NASDAQ: ALOY) to build a facility at Utah's Tooele Army Depot to process dysprosium and terbium—two rare earths essential for high-performance magnets used in weapons, radar, sonar, and electric motors.

Gold went to Fort Knox because America was unsure it could protect the resource from threats abroad. Rare earths now raise a similar question: how much of the defense supply chain can the country afford to leave overseas?

"The ability to process critical minerals on U.S. soil is a national-defense priority required for munitions, missiles, sensors, batteries, and the platforms our Soldiers depend on," said Dr. Jeff Waksman, Principal Deputy Assistant Secretary of the Army for Installations, Energy and Environment.

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"Leveraging our legal authorities and land, the U.S. Army is able to help nurture a critical minerals industrial base which equips and sustains America's Soldiers without putting any taxpayer dollars at risk."

China controlled approximately 91% of global separation and refining for magnet rare earths as of 2024 and produced roughly 94% of the world's rare-earth permanent magnets, according to the International Energy Agency (IEA).

The Army has spent decades buying equipment that depends on those magnets. Now it has chosen one of its own bases for domestic dysprosium and terbium processing in the Utah desert.

The Army Has Never Done This Before

The Army has never hosted commercial mineral processing on a U.S. installation before, making the Tooele award more than an ordinary land deal.

REalloys won the dysprosium and terbium site at the 43,000-acre Tooele Army Depot.

The arrangement is straightforward:

• The Army retains ownership of the land.
• REalloys brings the capital, builds the facility, and operates it.

For a new processing project, this changes the starting point. REalloys would not have to begin by finding and securing an industrial site. The Army has already selected one and tied it directly to a U.S. defense priority.

Why Dysprosium and Terbium?

The Army chose the first two metals carefully. Dysprosium and terbium help powerful magnets continue working under extreme heat. The Army uses those magnets in:

• Precision guidance systems
• Defense electronics
• Electric motors
• Sonar and radar

These are systems that cannot afford to lose strength when conditions get rough.

China dominates the processing behind those magnets, giving Beijing control over a part of the supply chain the U.S. defense industry cannot easily replace.

In April 2025, Beijing demonstrated the damage such control can inflict when it placed seven heavy rare earths under export controls, along with related metals, compounds, and magnets.

The effects rippled out quickly. U.S. and European manufacturers struggled to find magnets, and some cut production or temporarily stopped factory lines, according to the IEA.

Mining more ore could not restart those lines either. Companies still needed someone to separate it, refine it, and turn it into magnet-ready material. That is why, at Tooele, the Army is targeting the part of the supply chain that mining alone cannot fix.

What REalloys Already Has in Place

REalloys has been producing rare-earth metals in Ohio for years and has now secured processed material from Canada.

Euclid, Ohio Facility:

• Produces rare-earth metals and magnet materials for the Defense Logistics Agency
• Supplies the Department of Energy's Ames National Laboratory
• Serves industrial customers, according to its latest quarterly filing

Canada Supply Deal:

• REalloys struck a supply agreement with the Saskatchewan Research Council (SRC)
• Secured 80% of the annual production from SRC's upgraded capacity
• Agreed to invest approximately $21 million in the expansion

At full production, SRC expects the upgraded facility to produce:

• Up to 30 tonnes of dysprosium oxide per year
• Up to 15 tonnes of terbium oxide per year
• An increase in high-purity neodymium-praseodymium metal output from 400 tonnes to 600 tonnes

REalloys says SRC could send high-purity dysprosium and terbium oxides for customer testing as early as the fourth quarter of this year.

The Supply Chain Flow:

1. SRC separates and refines the material in Canada.
2. The Tooele plant converts dysprosium and terbium oxides into metals.
3. REalloys' Ohio facility turns those metals into alloys.

One Day Later: $100 Million in Financing

The Army announced its conditional award for the Tooele project on June 25. REalloys closed a $100 million financing the next day.

The filing directs the proceeds to working capital and general corporate purposes—not specifically to Tooele.

However, the Army deal makes the roles in this unprecedented agreement clear:

• The Army provides the land.
• REalloys provides the capital, builds the facility, and operates it.