REalloys (NASDAQ: ALOY) signed a 15-year offtake agreement with Critical Metals Corp. (NASDAQ: CRML) on Thursday, securing 15% of Phase 1 production from the Tanbreez rare earth project in Greenland. The deal targets dysprosium and terbium, two heavy rare earths essential for fighter jets, missiles, and radar systems. "If the U.S. can't access domestically-processed and manufactured materials, then it does not have a rare earths supply chain at all," Joe Kasper, REalloys' advisory board chairman, told Oilprice.com.
The agreement covers monthly output from one of the largest known heavy rare earth deposits outside China. Tanbreez is fully permitted and advancing under Western ownership after Greenland approved Critical Metals' acquisition of a controlling 92.5% stake earlier this year. Heavy rare earths account for roughly 27% of the project's total mineral profile, Critical Metals estimates.
Most global deposits focus on lighter, less valuable rare earths. The timing is not accidental. A Pentagon ban on Chinese-origin rare earth materials takes effect in seven months.
That deadline is now driving a scramble for alternative processing capacity. REalloys is positioning its Euclid, Ohio, facility as the answer. The plant already converts rare earth oxides into defense-grade metals and alloys.
Phase One expansion, requiring about $75 million in capital with $50 million already allocated, will add high-purity oxide production using recycled magnets and mined feedstock. Phase Two goes further. By 2029, the Ohio site would add NdFeB magnet manufacturing.
These are the world's most powerful permanent magnets. They go into missile guidance systems, fighter aircraft, radar platforms, drones, and EV drivetrains. Instead of selling metals and alloys to other manufacturers, REalloys would produce finished magnets from its own integrated supply chain.
Clear Street launched coverage of REalloys in April with a Buy rating and a $35 price target. The stock traded under $8 at the time. The supply vulnerability is not theoretical.
Johns Hopkins economists Steve Hanke and Jeffrey Weng told Fortune magazine that the U.S. has depleted massive portions of its precision weapons inventory across Iran and Ukraine. Their estimates are stark. Washington has burned through 45% of its Precision Strike Missile inventory just in Iran.
Nearly 50% of THAAD interceptors are gone. Thirty percent of Tomahawk cruise missiles have been expended. Replenishing just four major weapons systems could require between five and ten metric tons of finished defense-grade rare earth magnets.
More than 95% of current supply chains still tie back to China's refining and metallization system. "This is about building a completely sovereign supply chain from input to finished product, without relying on foreign processing," Kasper told Oilprice.com. His advisory board includes Stephen duMont, president of GM Defense, and General Jack Keane, former Vice Chief of Staff of the U.S. Army.
These are people who have run defense procurement from the inside. The Tanbreez deal does not stand alone. REalloys has built a network of allied-nation feedstock agreements.
It holds a strategic partnership with the Saskatchewan Research Council, tied to 80% of output from the Council's commercial rare earth processing facility. The company also secured rights to up to 10% of production from the Sheep Creek rare earth deposit in Montana. It controls the Hoidas Lake rare earth asset in Saskatchewan.
Each agreement adds another non-Chinese source of material. China's dominance in rare earth processing is nearly total. The country controls roughly 90% of global rare earth refining and metallization capacity.
Recent export restrictions have exposed the vulnerability. Bloomberg reported that internal disagreements are emerging inside the Trump administration over how fast to rebuild a domestic rare earth industry. The debate pits market-forces advocates against those who favor aggressive state-backed financing, similar to the industrial policy China used to dominate the sector.
Large defense contractors are feeling the pressure. GE Aerospace (NYSE:GE) and Lockheed Martin (NYSE:LMT) depend on dysprosium- and terbium-enhanced magnets for advanced jet engines, missile systems, and aerospace electronics. As the 2027 Pentagon ban approaches, securing non-Chinese processing capacity is becoming a strategic necessity across the defense-industrial base.
The Greenland deposit itself carries geopolitical weight. President Trump previously expressed interest in purchasing Greenland, a move widely seen as motivated by the island's mineral wealth. REalloys did not buy the territory.
It bought access to its critical minerals. The Tanbreez project is one of the few major Western-aligned deposits capable of supplying meaningful quantities of dysprosium and terbium outside China's control. Why It Matters: The U.S. defense arsenal depends on magnets made from materials processed almost entirely in China.
A 2027 Pentagon ban on Chinese-origin rare earths creates a hard deadline. If domestic processing capacity does not exist by then, weapons production faces a supply cliff. The REalloys strategy attempts to close that gap with an integrated North American solution, from mine to finished magnet.
Failure means the Pentagon cannot legally replenish precision weapons systems that have already been heavily depleted in active conflicts. Key takeaways: - REalloys signed a 15-year deal for 15% of Phase 1 production from Greenland's Tanbreez heavy rare earth project, targeting dysprosium and terbium for defense magnets. has depleted up to 50% of key precision weapons inventories. - REalloys is building an integrated processing and magnet manufacturing platform in Ohio, backed by a network of feedstock agreements across Canada and Montana. - China controls roughly 90% of global rare earth processing, and internal U.S. administration debates continue over how aggressively to fund a domestic alternative. Phase One buildout is underway.
The company has allocated $50 million of the required $75 million in capital. Phase Two, targeting magnet production by 2029, would close the full supply loop. Whether the timeline satisfies Pentagon procurement planners remains an open question.
The ban arrives first. The magnets come later. The gap between those dates will determine whether REalloys becomes a critical defense supplier or a well-funded plan that arrived too late.
Key Takeaways
— - REalloys signed a 15-year deal for 15% of Phase 1 production from Greenland's Tanbreez heavy rare earth project, targeting dysprosium and terbium for defense magnets.
— - The Pentagon's ban on Chinese-origin rare earth materials takes effect in seven months, while the U.S. has depleted up to 50% of key precision weapons inventories.
— - REalloys is building an integrated processing and magnet manufacturing platform in Ohio, backed by a network of feedstock agreements across Canada and Montana.
— - China controls roughly 90% of global rare earth processing, and internal U.S. administration debates continue over how aggressively to fund a domestic alternative.
Source: Oilprice.com
