Office of Strategic Capital inks $500 million conditional loan commitment with Phoenix Tailings

The United States Department of War’s Office of Strategic Capital announced a $500 million conditional loan commitment to Phoenix Tailings, Inc. to expand domestic rare earth processing. Combined with private investment, the financing is expected to total about $1 billion to increase output at existing operations and build a new U.S. facility for rare earth separation and metallization.

The move advances a national security initiative to develop a resilient U.S. supply chain for rare earth elements. Phoenix Tailings focuses on midstream processing—separating and metallizing rare earths—to connect raw extraction with permanent magnet manufacturing. The planned scale-up is intended to supply permanent magnet plants across the broader U.S. industrial base and strengthen supply lines for other specialized defense and industrial products.

“Supporting domestic processing for critical minerals and rare earths is a key focus for OSC, and the rare earth midstream processing capabilities that Phoenix Tailings represents are key shortage areas that need to be rapidly addressed. We are pleased to support Phoenix Tailings in building the company’s Freedom Facility, which will represent an important step in strengthening the full mine-to-magnet supply chain in the United States,” said David A. Lorch, Director of the Office of Strategic Capital and Senior Advisor to Deputy Secretary of War Steve Feinberg.

Phoenix Tailings currently operates metallization sites in Burlington, Massachusetts, and Exeter, New Hampshire. The conditional loan requires completion of customary steps before financial close, including financial, legal, technical, and other due diligence.

“I applaud the Office of Strategic Capital on this important conditional investment, which advances the reshoring of rare earth supply chains and strengthens the might of America’s defense industrial base. The focused, unified effort and support from Secretary Hegseth and Deputy Secretary Feinberg have been crucial in addressing supply chain shortages and vulnerabilities in the defense industrial base,” said the Honorable Emil Michael, Under Secretary of War for Research and Engineering.