REalloys Inc. (NASDAQ: ALOY) was conditionally selected by the United States Army to enter exclusive contract negotiations for a long-term Enhanced Use Lease (EUL). This agreement will allow REalloys to design, finance, build, and operate critical mineral processing facilities at the Tooele Army Depot in Tooele, Utah. This initiative is part of the Army's Strategic Capital Initiatives (SCI), marking the first time commercial mineral processing facilities will be sited on American military installations under Executive Order 14241.
The project focuses on processing dysprosium (Dy) and terbium (Tb), which are heavy rare earth elements vital for high-performance permanent magnets used in defense applications such as precision-guided munitions, electric motors, and sonar/radar systems. REalloys plans to use secure, allied feedstock, including Canadian supplies, to feed these downstream operations, extending its integrated “mine-to-magnet” strategy onto U.S. soil. The company believes this will address a critical gap in the Western rare earth supply chain as U.S. federal procurement restrictions on Chinese rare earth content intensify.
Development is targeted to begin as early as 2027, with an Initial Operating Capability (IOC) no later than 2028. This timeline aligns with expanded U.S. federal procurement restrictions on Chinese materials in the Defense Industrial Manufacturing Base, set to take effect on January 1, 2027. Under the EUL structure, REalloys will bear all costs for financing, designing, building, operating, securing, and decommissioning the facility, with no taxpayer dollars at risk. The U.S. Army will act as a landlord, retaining title to the property and receiving rent in the form of infrastructure improvements. Necessary environmental and regulatory reviews, including NEPA and Clean Air/Water Acts compliance, must be completed before construction begins.
