U.S. government provides financing to rare earth magnet producers

The Commerce Department and the Pentagon committed on Monday to provide financing and possibly an equity stake to a domestic producer of rare earth magnets. According to a statement from the U.S. Department of Commerce, the department signed a non-binding preliminary letter of intent to provide $50 million to Vulcan Elements under the Chip Act of 2022 to purchase equipment to produce permanent magnets needed for fighter jets, wind turbines and a range of other critical products.

North Carolina-based Vulcan Elements said separately it would receive a $620 million direct loan from the Pentagon's Strategic Capital Office and $550 million in private capital to build a 10,000-ton magnet factory in the United States.

"It's a dream come true," Vulcan Elements CEO John Maslin said in an interview. “It’s all about increasing our existing capacity and getting to a scale that makes sense for the country.”