The Trump administration is making a $700 million bet on magnets — specifically, the kind that power everything from electric vehicles to nuclear submarines.
The Department of War’s Office of Strategic Capital (OSC) announced conditional loan commitments with Vulcan Elements and ReElement Technologies aimed at dramatically boosting domestic production of specialized Neodymium Iron Boron magnets, a critical component for advanced technology that the U.S. currently sources primarily from overseas suppliers.
Strategic Investment in Critical Minerals
Under the agreement, Vulcan Elements will receive $620 million and ReElement Technologies will get $80 million in conditional loans to build out manufacturing capacity that could produce up to 10,000 metric tons of NdFeB magnet material within the next several years, the Department announced.
Why does this matter? These aren’t just any magnets. NdFeB magnets are powerful, permanent magnets essential for technologies ranging from semiconductor manufacturing equipment to fighter jets and satellite systems — making them a matter of both economic and national security.
“These OSC conditional commitments build on the swift and decisive actions taken by the Trump Administration to secure a domestic supply chain for the magnets used in chip manufacturing, drones, electric vehicles, fighter jets, industrial motors, nuclear submarines, and satellites,” said Under Secretary Emil Michael. “Following the Department of War’s agreement earlier this year with MP Materials, these conditional loan commitments with Vulcan and ReElement present a forward-leaning approach to further strengthen America’s magnet production,” he added.
The funding comes from the One Big Beautiful Bill Act (OBBBA), which President Trump signed into law in July 2025. That legislation provides up to $100 billion in total OSC lending authority specifically for critical minerals production and related industries.
Private Capital Joins Government Funding
It’s not just war dollars at work. The Department of Commerce is also stepping in with a preliminary non-binding letter of intent to provide $50 million in proposed federal incentives under the CHIPS and Science Act for equipment purchases. Additionally, Commerce will receive $50 million in equity in Vulcan Elements as part of the arrangement.
Vulcan Elements’ total funding package is substantial — the company will receive not only the $620 million in direct loans from OSC and $50 million in federal incentives from Commerce, but also $550 million in private capital, bringing its total investment to approximately $1.2 billion, according to a company statement.
ReElement Technologies, which specializes in recycling and processing capabilities, will match its $80 million OSC direct loan with private investment.
Conditions Apply
But these aren’t blank checks. The conditional loan commitments come with strings attached. Both companies must complete additional steps including financial, legal, technical, and other due diligence requirements before the deals are finalized.
“No OSC funds are disbursed until all parties have completed or met the conditions for disbursement as specified in the loan commitment,” the Department of War clarified in its announcement.
Chief Investment Officer Ryan Lindner expressed confidence in the approach: “These commitments demonstrate that OSC’s federal financing tools can successfully scale private capital investment in sectors vital to our economic and national security,” he stated.
The move represents the latest in a series of efforts to onshore critical mineral production and processing capabilities that have largely migrated overseas in recent decades. It also signals a growing recognition that certain industrial capacities are too strategically important to outsource entirely to foreign suppliers.
For the companies involved, these loans could be transformative. For the Pentagon and the administration, they’re an investment in technological self-sufficiency. And for American manufacturing? Perhaps the start of a magnetic attraction back to domestic shores.
