REalloys and U.S. Army Memorandum Targets Metals Processing Facility on 200 Acres

Key Facts

REalloys announced on November 3 that its subsidiary and the U.S. Army had signed a nonbinding term sheet concerning the potential development of a heavy rare earth elements processing facility at Tooele Depot in Utah. The memorandum sets out the main commercial terms for a potential enhanced-use lease, while excluding certain specified customary provisions from its nonbinding status. The proposed project aims to process and refine critical minerals, including dysprosium and terbium, across approximately 200 acres. The Army said the ability to process critical minerals in the United States is "a national security priority." The move is part of a broader effort to localize supply chains for defense-related materials, while the proposed project remains far from operational.

U.S. Geological Survey data for 2024 show significant concentration in the supply chain in China, which accounted for more than 70% of global rare earth extraction and 87% of processing. Its share was 100% of the processing of dysprosium and terbium, both heavy rare earth elements. This places the proposed facility in the context of U.S. efforts to expand domestic processing of these minerals. The Army also said selecting military sites to host commercial mineral processing facilities was a first. In March 2025, a U.S. executive order defined mineral production to include mining, processing, refining and smelting, as well as the production of processed critical minerals and their derivatives.

Under the memorandum's framework, the lease could run for an initial 50 years, with one 25-year renewal option, allowing for a potential total term of up to 75 years. The Army would retain ownership of the land, while REalloys would develop, finance, build and operate the facility, then dismantle it when the project ends. The Army retains a right of first offer to buy the facility's products, but is not obligated to purchase any quantity. The Army said the lease model does not put taxpayer funds at risk and that the private partner bears the facility's costs. The proposed long lease term does not mean a definitive contract has been signed; the necessary terms and approvals are still being completed.

The company's progress at Tooele is linked to other mineral processing plans at the SRC facility. In second-quarter results published in August, REalloys said that after the expansion it was targeting annual capacity of approximately 525 tons of neodymium-praseodymium metal, 30 tons of dysprosium oxide and 15 tons of terbium oxide. The company then expected commercial receipt of these materials from SRC to begin in the third quarter of 2027. For financial performance over the same period, revenue was $0.8 million in the quarter ended June 30, 2026, compared with $0.4 million in the corresponding period of 2025. The company posted a net loss of $36.8 million, compared with $2.2 million a year earlier, attributing the increase mainly to $32.1 million in noncash stock-based compensation. Its cash balance was about $122.4 million on June 30, 2026.

Converting the Tooele memorandum into a definitive lease remains conditional on agreement over the base rent and participation fee, Army approval of the development plan, completion of environmental reviews, and obtaining permits, financing and other approvals. The Army prohibits construction from starting before completion of the required environmental and regulatory reviews and federal and local permits. The Army said formal contracts are still under negotiation and development work could begin in 2027, with initial operating capacity targeted by 2028 or earlier. The memorandum allows either party to terminate it if the conditions are not met or waived within 18 months. In EL7 data, the company's stock closed at $6.32 on November 12, 2026.