The 2027 Defense Deadline That is Forcing the U.S. to Rebuild 40 Years of Lost Tech

FN Media Group Presents Oilprice.com Market Commentary

NEW YORK, May 12, 2026 /CNW/ -- Roughly 40 years ago, the United States made a decision that seemed perfectly rational at the time: it stopped processing rare earths. The economics didn't make sense when China could do it cheaper, so U.S. facilities closed…the expertise scattered…and an entire layer of industrial capability mostly disappeared from North American soil.   Companies mentioned in today's commentary includes:  Realloys Inc. (ALOY), MP Materials Corp (NYSE: MP), USA Rare Earth Inc. (NASDAQ: USAR), Energy Fuels Inc. (NYSE American: UUUU) Perpetua Resources Corp. (NASDAQ: PPTA), Comstock Inc. (NYSEAmerican: LODE).

REalloys (ALOY) is the company now working to undo the four decades of neglect that have followed…and the reason it matters is that the expertise it holds may be the single hardest thing in the rare earth supply chain to replace.

In fact, the Center for Strategic and International Studies has identified rare earth metallization and alloying as the least developed and most difficult capability to rebuild outside China. According to CSIS, this kind of expertise is learned over long operating histories, not built on a schedule. It's the kind of expertise that can only be built through years of doing it…and no amount of money can speed that up.

How America Lost Control of a Critical Industrial CapabilityThe West didn't lose its rare earth processing capability to espionage or theft. It lost it to economics. Starting in the 1980s and accelerating through the 1990s, China made a deliberate decision to invest heavily in rare earth mining and processing. State support absorbed losses, environmental controls were minimal, and labor was cheap. The result was a production cost that no Western facility could match. One by one, processing operations across North America and Europe shut down. The last major U.S. rare earth mine, Mountain Pass in California, closed in 2002.

But what disappeared was far more than a few facilities. The people who knew how to run them retired or moved on, and the specialized equipment was decommissioned. The institutional knowledge of how to separate 17 individual rare earth elements, how to convert oxides into metals at extreme temperatures, and how to alloy those metals to exact specifications for defense and industrial use…well, that accumulated expertise simply ceased to exist in the West. 

As one rare earth processing expert put it bluntly: the West abdicated its rare earth processing capability to China. The skillsets, the workforce, the equipment, and the process knowledge are now 30 years behind, and none of it can be developed overnight.

China understood the value of what it was accumulating. While Western companies optimized for short-term profitability, China was playing a longer game, building deep process knowledge, training specialized workforces, and integrating downstream into metals, alloys, magnets, and finished components. By the time anyone in the West noticed how dependent they'd become, China controlled approximately 90–95% of global rare earth processing and an even larger share of finished magnet production.

No Amount of Money Can Replace 40 Years of Knowledge

Converting rare earth minerals into defense-grade metals and alloys is an extraordinarily complex industrial process. It involves separating 17 individual rare earth elements through multi-stage solvent extraction…then converting purified oxides into metals at temperatures exceeding 1,200 degrees…then precision alloying to exact specifications across thousands of individual micro-steps…and all of this must be controlled with extreme precision.

Each stage requires specialized knowledge that can only be built through years of hands-on operation. There are no textbooks that teach it. There are no consultants who can install it. It has to be learned by doing, failing, adjusting, and doing it again over years and years.

The SRC facility in Saskatchewan, built by REalloys' processing partner, illustrates just how steep the learning curve is. When China blocked the export of processing technology in 2020, SRC had to design and build its own systems from scratch.

It took years of work by a multidisciplinary team of mineral experts, processing specialists, and AI engineers working in concert. The AI system alone was trained by deliberately breaking the separation process over and over for months until it ran out of problems to solve….

Even with SRC's 15 years of prior experience working with rare earth clients, it still took years to get to where they are today, which is producing higher-purity metals with six people and an AI system, compared to the 80 workers a comparable Chinese facility would require.

The Company That Kept the Expertise Alive

Through its acquisition of PMT Critical Metals, REalloys (ALOY) took ownership of the Euclid, Ohio, facility along with more than 30 years of applied development in specialty metals processing. That includes eight years of focused work on rare earth metallization in collaboration with U.S. national laboratories and the Defense Logistics Agency, which is work that involved thousands of production runs, failed experiments, and iterative redesigns carried out in operating facilities rather than academic labs.

The Euclid facility is currently the only site in North America with a proven track record of delivering rare earth metals and alloys to government and commercial partners.

It already holds contracts with the U.S. Department of Defense, Department of Energy, and NASA. And the processes it uses have been demonstrated, tested, and qualified under real-world conditions, which is what separates operational expertise from a business plan.

Andrew Sherman, REalloys' Head of Research and Development, describes the Euclid facility as a platform the company can build from rather than something it has to invent. The remaining work, he says, is about expanding capacity and locking in long-duration defense programs where material supply is committed for years. The hardest part, which is proving the process works, has already been done.

That distinction is critical. Defense and industrial customers qualify processes and the people and facilities behind them, not technologies on paper. Qualification can take several years, and once a supplier is locked in, switching becomes a technical and regulatory undertaking that nobody takes on willingly. A company starting from scratch today would need to build the expertise, prove the process, and then spend years getting qualified…all while REalloys is already delivering.

Expertise Backed by a Complete Supply Chain

Upstream, the company owns the Hoidas Lake rare earth project in Saskatchewan and has secured feedstock agreements with partners in Kazakhstan, Brazil, and Greenland. Midstream, it holds an exclusive 80% offtake on production from the Saskatchewan Research Council's Rare Earth Processing Facility in Saskatoon, targeting first commercial production in late 2026 to early 2027. Downstream, the Euclid facility will handle the metallization, alloying, and magnet manufacturing that defense and industrial customers actually need.

By early 2027, the combined platform is expected to produce approximately 525 tonnes per year of neodymium-praseodymium metal, roughly 30 tonnes of dysprosium oxide, and 10 tonnes of terbium oxide. At that scale, the SRC facility would be the largest source of heavy rare earth oxides outside China, sitting right in North America's backyard.

Phase 2 plans call for significantly larger production later this decade, including approximately 200 tonnes per year of dysprosium metal, 45 tonnes of terbium metal, with capacity to produce up to 20,000 tonnes per year of heavy rare earth permanent magnets.

That timing is critically important, as on January 1, 2027, updated U.S. defense procurement rules under DFARS take effect that will restrict the use of Chinese-origin rare earth materials in qualifying weapons systems. That creates immediate, government-mandated demand for domestically processed, defense-compliant material, which is exactly what REalloys' Euclid facility has spent 40 years learning to produce.

The institutional support behind REalloys reflects the seriousness of the undertaking. The U.S. Export-Import Bank has issued a $200 million letter of intent to support the company's supply chain development.

Other companies to keep an eye on:

USA Rare Earth (USAR) is the first company to execute a fully vertically integrated "mine-to-magnet" strategy on U.S. soil. In early 2026, the company secured a transformative $1.6 billion funding package from the U.S. government, which included a direct equity stake from the administration. This capital is being deployed to accelerate the development of the Round Top Mountain project in Texas, the richest known deposit of heavy rare earths, gallium, and beryllium in the country, while simultaneously ramping up its 310,000 sq. ft. magnet manufacturing facility in Stillwater, Oklahoma.

The Stillwater plant is expected to reach commercial production in the first half of 2026, producing high-performance sintered neodymium-iron-boron (NdFeB) magnets used in F-35 fighter jets, electric vehicle motors, and missile guidance systems.

Energy Fuels Inc. (NYSE American: UUUU) has transformed its White Mesa Mill in Utah into a cornerstone asset for U.S. critical mineral processing. Beyond uranium recovery, the facility is now operating commercial-scale rare earth separation circuits, extracting value from monazite concentrates that were historically discarded as waste.

White Mesa remains uniquely licensed in the United States to manage radioactive byproducts associated with monazite processing, creating a substantial regulatory moat. By early 2026, the company is producing separated neodymium and praseodymium oxides domestically, reducing dependence on Chinese downstream capacity.

Perpetua Resources Corp. (NASDAQ: PPTA) is advancing the Stibnite Gold Project in Idaho as a dual-purpose asset combining gold production with a strategic domestic antimony supply. The project is designed to restore a historic mining district while simultaneously remediating legacy environmental impacts.

Antimony recovered from Stibnite would represent the only significant primary U.S. source of the metal, which is essential for munitions, flame retardants, and advanced battery technologies. The Department of Defense has provided funding support to accelerate development, underscoring the project's strategic importance.

MP Materials (MP) is the operational backbone of America's domestic rare earth recycling and production ecosystem. Its Mountain Pass facility is designed as a closed-loop, zero-discharge operation that recycles more than one billion liters of water per year, and the company is now building out dedicated recycling infrastructure to accept post-consumer electronics and post-industrial scrap as feedstock for new magnets.

In July 2025, MP formalized its $500 million partnership with Apple, which will significantly expand the Independence facility's magnet production lines and establish a first-of-its-kind commercial rare earth recycling line in California. This collaboration, combined with substantial backing from the U.S. Department of Defense, positions MP as the central node of a fully integrated domestic supply chain all within the United States.

Every other company on this list is trying to dig something out of the ground. Comstock Inc. (LODE) is going a different direction: recovering critical metals from the mountain of end-of-life solar panels that's about to hit the U.S. market.

Comstock Metals, the company's Nevada-based subsidiary, is building what it describes as the only certified zero-landfill solar recycling solution in North America. Its first industry-scale facility in Silver Springs, Nevada is commissioning now, designed to process up to 100,000 tons--approximately 3.3 million panels--per year. A second site in Clark County is in permitting.

By. Josh Owens

Oilprice Intelligence brings you the inside view on where the next gains will come from, breaking down the market's biggest growth driver with analysis from veteran oilmen and experts. Click here to get this crucial intel for free

IMPORTANT NOTICE AND DISCLAIMER 

FORWARD LOOKING STATEMENTS

This publication contains forward-looking statements, including statements regarding expected continual growth of the featured companies and/or industry. The Publisher notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the companies' actual results of operations. Factors that could cause actual results to differ include, but are not limited to, changing governmental laws and policies concerning, among other things, recreational and medical cannabis sales, success of the company's proprietary technology, the size and growth of the market for the company's products and services, the company's ability to fund its capital requirements in the near term and long term, pricing pressures, etc. 

SHARE OWNERSHIP

Neither the author nor the publisher, Oilprice.com, was paid to publish this communication concerning REalloys (ALOY). However, the owner of Oilprice.com owns shares and/or stock options of the featured company and therefore has an incentive to see the featured company's stock perform well. The owner of Oilprice.com may buy or sell shares of the featured company at any time including at or near the time you receive this communication. This share ownership should be viewed as a major conflict with our ability to be unbiased. This is why we stress that you conduct extensive due diligence as well as seek the advice of your financial advisor or a registered broker-dealer before investing in any securities.

This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security. Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position. The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser. This communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company's SEC, SEDAR and/or other government filings. Investing in securities is speculative and carries a high degree of risk. Past performance does not guarantee future results. This communication is based on information generally available to the public and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher cannot guarantee the accuracy or completeness of the information.

INDEMNIFICATION/RELEASE OF LIABILITY

By reading this communication, you acknowledge that you have read and understand this disclaimer, and further that to the greatest extent permitted under law, you release the Publisher, its affiliates, assigns and successors from any and all liability, damages, and injury from this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.

TERMS OF USE

By reading this communication you agree that you have reviewed and fully agree to the Terms of Use found here http://oilprice.com/terms-and-conditions If you do not agree to the Terms of Use http://oilprice.com/terms-and-conditions, please contact Oilprice.com to discontinue receiving future communications.

INTELLECTUAL PROPERTY

Oilprice.com is the Publisher's trademark. All other trademarks used in this communication are the property of their respective trademark holders.  The Publisher is not affiliated, connected, or associated with, and is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks.

This press release was distributed on behalf of REalloys (ALOY)

DISCLAIMER: OilPrice.com is Source of all content listed above. FN Media Group, LLC (FNM), is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated in any manner with OilPrice.com or any company mentioned herein. The commentary, views and opinions expressed in this release by OilPrice.com are solely those of OilPrice.com and are not shared by and do not reflect in any manner the views or opinions of FNM. FNM is not liable for any investment decisions by its readers or subscribers. FNM and its affiliated companies are a news dissemination and financial marketing solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security. FNM was not compensated by any public company mentioned herein to disseminate this press release but was compensated twenty four hundred dollars by REalloys to distribute this release on behalf of the company. #tickertagpressreleases #pressrelease #stockalerts

FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNM undertakes no obligation to update such statements.

Contact Information:

Media Contact e-mail:  [email protected]
U.S. Phone: [phone]
OilPrice.com
[phone]
[email protected]

SOURCE OilPrice.com