The U.S. Department of War’s Office of Strategic Capital (OSC) and Phoenix Tailings announced a strategic investment aimed at expanding domestic rare earth processing capacity, a critical segment of the U.S. mineral supply chain.
OSC is conditionally committing $500 million in long-term debt financing toward the construction of the Freedom Facility, which anchors an estimated $1 billion financing initiative designed to strengthen the United States’ rare earth midstream processing capabilities.
Once completed, the facility is expected to process a range of feedstocks into light and heavy rare earth metals used in defense systems, advanced manufacturing, energy infrastructure, and consumer technology. Officials said the project is intended to reduce reliance on foreign-controlled refining capacity, which currently dominates global rare earth processing.
“The rare earth midstream processing capabilities that Phoenix Tailings represents are key shortage areas that need to be rapidly addressed,” said David A. Lorch, Director of OSC. He added that supporting domestic critical minerals processing is a key priority for the office as part of efforts to strengthen the full mine-to-magnet supply chain in the United States.
Phoenix Tailings Plans Flexible Processing Hub for Critical Material
Phoenix Tailings said the Freedom Facility will serve as a large-scale separation and metallization hub capable of working with concentrates, recycled materials, and secondary sources. The company described the project as a central component of efforts to build a more resilient Western supply chain.
“The Freedom Facility is designed to serve as the backbone of a resilient Western rare earth supply chain,” said Anthony Balladon, co-founder and Chief Commercial Officer of Phoenix Tailings.
Phoenix Tailings said the facility will use domestically controlled technology and aims to reduce dependence on foreign processing systems. The company targets initial operations for 2028.
Phoenix Tailings also said its processing approach uses advanced chemistry, industrial hardware, and digital systems to reduce environmental and safety impacts compared with traditional rare earth refining methods.
“We believe there is a better way to produce rare earths and critical metals,” said Dr. Tomas Villalón Jr., co-founder and CTO of Phoenix Tailings, noting that the investment supports deployment of domestic infrastructure.
Company CEO Nicholas Myers said the project represents a broader national effort to strengthen critical supply chains and industrial capacity.
The financing commitment remains conditional and is subject to standard due diligence requirements, including financial, legal, and technical reviews before reaching final closure.
Phoenix Tailings is not the only beneficiary of federal funding this week. The Office of Strategic Capital has also backed Energy Fuels with a $725M on separate financing commitment for its rare earth expansion, underscoring a broader push to strengthen multiple layers of the U.S. critical minerals supply chain.
Fact Sheet — U.S. $500M Rare Earth Midstream Investment
- Announcement date: June 16, 2026
- Announced by: U.S. Department of War’s Office of Strategic Capital (OSC) and Phoenix Tailings
- Project: Freedom Facility (rare earth midstream processing plant)
Financing
- OSC commitment: $500 million (conditional, long-term debt financing)
- Total expected financing: ~ $1 billion initiative
- Status: Conditional commitment pending financial, legal, and technical due diligence
Project Purpose
- Expand U.S. rare earth midstream processing capacity
- Reduce reliance on overseas refining and processing
- Strengthen domestic and allied supply chains for critical minerals
Facility Overview
- Will process light and heavy rare earth metals
- Uses feedstocks including:
- Mineral concentrates
- Recycled materials
- Secondary sources
- Designed as a separation and metallization hub
Strategic Importance
- Supports defense systems, advanced manufacturing, energy infrastructure, and electronics
- Addresses bottleneck in midstream rare earth processing (between mining and manufacturing)
Timeline
- Initial operations targeted: 2028
Key Partners
- U.S. Office of Strategic Capital (OSC)
- Phoenix Tailings
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