WASHINGTON, D.C. — The U.S. Department of War is directing at least $885.6 million into rare-earth, alumina and critical-mineral projects, using equity investments, purchase commitments and industrial-base funding to reduce U.S. dependence on foreign suppliers of materials used in weapons systems, energy infrastructure and advanced manufacturing.
The largest commitment is a $750 million investment through the Industrial Base Analysis and Sustainment program tied to an offtake agreement for mixed rare-earth carbonates produced at Serra Verde’s Pela Ema Project in central Brazil.
That investment forms part of a broader $1.55 billion financing structure assembled by the department’s Economic Defense Unit, including a $300 million purchase commitment from the Defense Logistics Agency and $500 million from a money-center bank.
The arrangement is intended to secure supplies of dysprosium, terbium, neodymium and praseodymium, elements used in high-performance permanent magnets for fighter aircraft, submarines, satellites, guided missiles, drones and other defense systems.
The transaction follows a separate $565 million U.S. International Development Finance Corp. loan intended to expand and optimize the Pela Ema Project.
“Securing resilient domestic and allied supply chains is a fundamental warfighting requirement,” Assistant Secretary of War for Industrial Base Policy Mike Cadenazzi said.
The department is also making a $100 million follow-on preferred equity investment in Atlantic Alumina Co., or Atalco, bringing its total investment in the company to $400 million.
Private investors have committed another $350 million, with $50 million more expected within 75 days, according to the department. If completed, public and private investments in Atalco would total $800 million.
The capital is intended to maintain operations and restore the Gramercy, Louisiana, refinery to its nameplate capacity of 1.2 million metric tons of alumina annually.
The plant is the last remaining domestic alumina refinery and currently supplies about 60% of the Department of War’s annual requirement for 200,000 metric tons of metallurgical aluminum, according to the department.
The government expects expanded production to reach the equivalent of 142% of its projected demand by 2029.
The Gramercy refinery converts imported bauxite into domestically refined alumina and accounts for roughly 55% of U.S. alumina demand. Its output supplies aluminum smelters and manufacturers across several states.
The department said the financing will also preserve about 875 jobs spanning refining, mining, logistics and port operations, including 530 employees at the refinery.
A third transaction involves a $35.6 million equity investment in Trilogy Metals Inc. (NYSE: TMQ), giving the federal government a 10% direct ownership stake plus 7.5% in penny warrants.
The resulting 17.5% economic position will support exploration, engineering and infrastructure work at the Upper Kobuk Mineral Projects in northwest Alaska.
The district is operated through Ambler Metals LLC, a 50-50 joint venture between Trilogy Metals and South32 Ltd., and contains deposits of copper, cobalt, germanium and other critical minerals.
The investment follows approval of the proposed 211-mile Ambler Road, which would connect the mineral district with the Dalton Highway and provide industrial access to the remote mining area.
The department projects the project could generate more than 2,730 construction jobs and 500 long-term mining positions in Alaska, along with more than $1.1 billion in state revenue.
Officials also expect downstream refining and manufacturing activity tied to the minerals to affect several states, including Pennsylvania, Arizona, Utah, Texas and Ohio.
“To build a robust Defense Industrial Base, we must secure the foundational materials that enable it,” Cadenazzi said.
Taken together, the investments illustrate a broader federal strategy of using direct government capital, preferred equity, purchase commitments and private-sector financing to secure materials considered critical to defense production.
The department’s Economic Defense Unit has increasingly used those structures to support domestic or allied production capacity in sectors where U.S. officials view foreign concentration as a strategic vulnerability.
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