REalloys Inc. (NASDAQ: ALOY) announced on June 25, 2026 that the United States Army has conditionally selected the company to enter exclusive contract negotiations for a long-term Enhanced Use Lease to design, finance, build, and operate heavy rare earth processing facilities at the Tooele Army Depot in Tooele, Utah. The partnership marks the first commercial critical-mineral processing award on a U.S. military installation through a direct execution of Executive Order 14241, according to the Army's Strategic Capital Initiatives. The facilities will refine dysprosium and terbium, heavy rare earth elements essential to national security and used in the Defense Industrial Manufacturing Base for high-temperature permanent magnets in precision-guided munitions, electric motors, sonar, and other defense systems. Development is targeted as early as 2027 with Initial Operating Capability no later than 2028, aligning with the January 1, 2027 U.S. federal procurement ban on Chinese materials in the Defense Industrial Manufacturing Base. The Enhanced Use Lease structure is expected to require no taxpayer subsidies, with REalloys bearing all costs to finance, design, build, operate, secure, and decommission the facility while paying rent at or above fair market value to the Army.
U.S. Army Selects REalloys for Tooele Army Depot Rare Earth Facility
The award is enacted through the Army's Strategic Capital Initiatives (SCI), an effort to partner with the private sector to accelerate enterprise-wide modernization. According to the Army, these awards mark the first time the Army has sited commercial mineral-processing facilities on American military installations pursuant to a direct execution of Executive Order 14241. REalloys was named alongside a small group of U.S.-organized industry partners selected to build out domestic processing for minerals the Army has identified as essential to munitions, missiles, sensors, batteries, and the platforms its soldiers depend on.
Leonard Sternheim, Chief Executive Officer of REalloys, stated: "We believe selection by the U.S. Army for a processing facility on American soil is a powerful validation of REalloys' mine-to-magnet strategy and of the urgent national need for domestic heavy rare earth capability. Dysprosium and terbium are the heart of the high-temperature magnets that keep our most advanced defense systems running, and today, almost all of that processing happens overseas. We are proud to have the opportunity to help the Army change that, building secure, allied-sourced capacity that supports our Soldiers without putting taxpayer dollars at risk, and doing it ahead of the 2027 deadline our customers are racing to meet."
Dysprosium and Terbium Processing for Defense Applications
At Tooele, REalloys intends to refine dysprosium (Dy) and terbium (Tb) — heavy rare earth elements that are indispensable to precision guidance and defense electronics. These materials are used to manufacture high-performance permanent magnets capable of withstanding extreme operational temperatures, the kind found in precision-guided munitions, electric motors, and sonar and radar networks. Consistent with REalloys' strategy, the Company intends to draw on secure, allied feedstock — including Canadian heavy rare earth supply — to feed its downstream separation, metallization, and magnet operations.
The facility would extend REalloys' fully integrated mine-to-magnet strategy further into U.S. soil, complementing the Company's diversified, allied-nation feedstock base and its downstream processing network. The Company believes domestic processing capacity for Dy and Tb is one of the most strategically scarce links in the Western rare earth supply chain — and a capability the U.S. defense industrial base urgently needs as China-content restrictions take effect.
Enhanced Use Lease Structure Requires No Taxpayer Subsidies
The conditional selection is made possible through an Enhanced Use Lease, a statutory authority under 10 U.S.C. § 2667. An EUL is a real-estate agreement that allows the Army to lease non-excess, underutilized land to private-sector partners. Importantly, an EUL is a leasehold — not a land sale — and the United States retains title to the property at all times.
Under this structure, the Army acts purely as a landlord, while the private partner bears the costs to finance, design, build, operate, secure, and decommission the facility, putting no taxpayer dollars at risk. In return for use of the land, the partner pays rent at or above fair market value, which the Army prefers to receive as "in-kind" consideration — funding infrastructure improvements that benefit Soldiers, families, and installation operations. A mandatory decommissioning bond ensures funds are secured in advance to return the land to its original condition at lease end.
Eligibility was strictly limited to entities organized under U.S. law with majority domestic ownership and control and a U.S. place of business, and any in-kind improvements will adhere to Davis-Bacon prevailing wages and Buy American Act requirements.
Development Timeline Aligns with 2027 Chinese Materials Ban
Definitive agreements are underway, with development slated to begin as early as 2027 and an Initial Operating Capability targeted no later than 2028. The timing aligns with expanded U.S. federal procurement restrictions on Chinese rare earth content, and reinforces REalloys' objective of delivering qualified, compliant rare earth metals and alloys to the U.S. Department of Defense, the U.S. Department of Energy, NASA, the U.S. Defense Industrial Base, and the broader U.S. Organic Industrial Base.
No construction will begin until rigorous environmental and regulatory reviews — including the National Environmental Policy Act (NEPA), the Clean Air and Water Acts, and all required federal, state, and local permits — are fully complete.
Leadership Statements on National Security Partnership
General Jack Keane (Ret.), Board Director of REalloys, commented: "This is an important step for American national security and critical mineral sovereignty. The U.S. Army's decision to leverage its installations to establish domestic rare earth processing capacity, we believe, is strategically sound and operationally necessary. REalloys' mine-to-magnet approach, anchored in secure allied feedstocks and a zero-adversary-nexus supply chain, we believe, is well aligned with what the Joint Force needs to help ensure uninterrupted access to the heavy rare earth elements that power our country's most advanced weapons systems."
Stephen duMont, Chairman of REalloys, said: "We believe this important activity with the U.S. Army represents a strategic inflection point for REalloys and for the broader effort to establish a sovereign, resilient, and secure heavy rare earth processing capability in the United States. REalloys was purpose-built to give the U.S. government and defense industrial base an onshore and allied-sourced supply of the critical rare earth materials it needs, designed to remove any adversary nexus. We believe being selected to build that capability in partnership with the Army to help revitalize the Organic Industrial Base reflects our shared commitment to ensuring our warfighters have the capability they need to safely perform their mission."
REalloys Inc. (NASDAQ: ALOY) is a U.S.-based rare earth materials company executing a mine-to-magnet strategy across upstream feedstock, midstream separation and metallization, and downstream magnet manufacturing. REalloys is focused on delivering qualified, allied-nation rare earth metals and alloys including dysprosium, terbium, and neodymium to the U.S. Department of Defense, the U.S. Department of Energy, NASA, the U.S. Defense Industrial Base, and the broader U.S. Organic Industrial Base. The Company is headquartered in Boca Raton, Florida, with operational activities centered in Euclid, Ohio.
FAQ
What did REalloys announce on June 25, 2026?
REalloys announced that the United States Army has conditionally selected the company to enter exclusive contract negotiations for a long-term Enhanced Use Lease to design, finance, build, and operate heavy rare earth processing facilities at the Tooele Army Depot in Tooele, Utah. The partnership marks the first commercial critical-mineral processing award on a U.S. military installation through a direct execution of Executive Order 14241.
Why is the Tooele facility important for U.S. defense?
The facilities will refine dysprosium and terbium, heavy rare earth elements essential to national security and used in the Defense Industrial Manufacturing Base for high-temperature permanent magnets in precision-guided munitions, electric motors, sonar, and other defense systems. The timing aligns with the January 1, 2027 U.S. federal procurement ban on Chinese materials in the Defense Industrial Manufacturing Base.
How is the Enhanced Use Lease structured?
Under the Enhanced Use Lease structure authorized by 10 U.S.C. § 2667, REalloys bears all costs to finance, design, build, operate, secure, and decommission the facility while paying rent at or above fair market value to the Army, requiring no taxpayer subsidies. The United States retains title to the property at all times, with the Army acting purely as a landlord.
