Army awards conditional leases for U.S. critical-mineral processing to shore up defense supply chains

WASHINGTON — The U.S. Army has conditionally awarded long-term leases to four companies to develop commercial processing plants for defense-critical minerals on military installations in Alabama, Arkansas, Texas, and Utah, a move aimed at strengthening domestic supply chains for advanced weapons, batteries, and sensors.

Under the Army’s Strategic Capital Initiatives program, the projects would be built on underused parcels at Anniston Army Depot (Alabama), Pine Bluff Arsenal (Arkansas), Red River Army Depot (Texas), and Tooele Army Depot (Utah). The awards mark the first time the service has sited commercial mineral processing facilities on U.S. military bases, according to the Army, which linked the action to a presidential executive order on critical minerals.

The Army named four winners, each focused on materials central to modern defense systems:
– Empire State Mines, a Titan Mining subsidiary, at Anniston and Pine Bluff (graphite)
– EnergyX at Red River (lithium)
– Ioneer USA Corporation at Tooele (boron)
– REalloys at Tooele (dysprosium and terbium)

“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. “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.”

Formal lease agreements are still being negotiated. The Army said site development could start as early as 2027, with initial operations by or before 2028.

The initiative relies on the Army’s Enhanced Use Lease authority under 10 U.S.C. § 2667, which allows the service to lease non-excess, underutilized land to private entities. The Army keeps title to the land while acting as a landlord, and lessees cover the costs to finance, design, build, operate, secure, and ultimately decommission the facilities. Instead of cash rent, the Army typically seeks “in-kind” consideration—on-post infrastructure upgrades—along with a decommissioning bond to return land to original condition when the lease ends.

“This is proving the Secretary of the Army’s theory that we can operate in a different way that benefits both the Army and industry – as well as gets the Army the things that it needs critically on a timeline that would have been unthinkable 18 months ago,” said David Fitzgerald, Deputy Under Secretary of the Army. “We are very excited about the effort, and the engagement and support we’ve gotten from industry.”

To reduce supply-chain risks and foreign influence, eligibility was limited to companies organized under U.S. law with majority domestic ownership and control and a U.S. place of business. Any in-kind construction must comply with Davis-Bacon prevailing wages and the Buy American Act. No construction can begin until federal, state, and local environmental reviews are complete, including requirements under the National Environmental Policy Act and the Clean Air and Clean Water Acts. The Army said parcels were selected to avoid conflicts with base missions, and bidders were required to engage state and local authorities and propose mitigation measures.

The selected minerals underpin a wide range of defense applications. Boron is central to lightweight, hard armor ceramics and is also used in energetic components for propellants. Heavy rare earths such as dysprosium and terbium are key to high-temperature permanent magnets used in precision-guided weapons, electric motors, and radar and sonar systems. Graphite products are essential for battery anodes, thermal protection, and aerospace applications. Battery-grade lithium chemicals support next-generation military power systems for vehicles, drones, and soldier electronics.

The Army pointed to recent Enhanced Use Lease deals as proof of concept, including a conditional lease with Hanwha Defense USA for a $1.3 billion munitions facility at Pine Bluff Arsenal and conditional leases for data centers with Carlyle at Fort Bliss and CyrusOne at Dugway Proving Ground.

Ioneer said its planned boron facility at Tooele would help reduce reliance on overseas sources. “Ioneer is proud to partner with the U.S. Army to forge a secure, domestic supply chain for the critical minerals that underpin our nation’s defense and security. Boron is foundational to modern military power and force protection — and producing it on America soil strengthens our industrial base while reducing our over-reliance on foreign sources. We look forward to advancing this partnership in direct support of the Joint Force and the warfighters who depend on these materials every day.”

For more on the Army’s Strategic Capital Initiatives, the service directed inquiries to www.army.mil/sci and its Communication and Outreach Office.