U.S. Army Seeks 75-Year Lease for Rare Earth Processing

The U.S. Army has signed a non-binding term sheet with REalloys (NASDAQ: ALOY) for a potential 75-year lease at Tooele Army Depot in Utah. The agreement would allow REalloys to build and operate a facility processing dysprosium and terbium, two rare earth metals currently dominated by China.

Under the terms, the Army would have the right of first offer on production, enabling it to secure materials for American weapons manufacturers before offering them to other buyers. The lease includes a possible 25-year extension, with government ownership of the land and private financing for operations.

The Army's move comes as part of broader efforts to secure domestic sources of critical materials. China controls nearly all global processing of dysprosium and terbium, which are essential for advanced military technologies like fighter aircraft, missile systems, and precision-guided munitions. In April 2025, Beijing introduced export restrictions on seven categories of medium and heavy rare earths, disrupting supply chains.

REalloys has been working to develop non-Chinese sources of rare earth materials, including a facility in Ohio and partnerships with Canada's Saskatchewan Research Council. The company has also secured a 15-year offtake agreement from Greenland's Tanbreez project and is planning a large-scale heavy rare earth metallization facility in the U.S. by early 2028.

The Army's proposed lease structure is significant, as it would allow the military to establish domestic production on its own property while leaving construction and operating costs to the private sector. The right of first offer is designed to ensure the military has access to critical materials without being obligated to purchase them.

The deal reflects the Pentagon's growing concern over reliance on foreign-controlled supply chains for defense technologies. With expanded federal sourcing restrictions set to take effect in 2027, the military is seeking reliable domestic sources of rare earth materials to support its advanced weapons programs and naval platforms.