The U.S. Department of War has awarded rare earths company REalloys a contract worth up to $1.7 million to support the design of a domestic metals processing facility.

The Ohio-based firm received the award from the Defense Logistics Agency, the Pentagon’s procurement arm responsible for acquiring materials and supplies for the U.S. military. The contract is structured in two phases over 24 months and is intended to fund engineering and design work for a modular processing plant.

According to the company, the planned facility would be capable of processing up to 300 metric tons per year of the heavy rare earth elements samarium and gadolinium into metal form. Those materials are essential inputs for high-performance magnets used in precision-guided munitions, missile systems, radar, and advanced electronics.

Rare earth elements must be converted into metal before they can be incorporated into magnet manufacturing. The United States has sought to strengthen domestic supply chains for these materials amid growing concerns over reliance on foreign sources. China has imposed export restrictions on rare earths and other critical minerals, intensifying efforts in Washington to expand U.S.-based processing capacity.

The award represents an initial federal endorsement of REalloys’ technology and development plans. In addition to the proposed processing facility, the company is advancing a rare earths mining project in Saskatchewan, Canada, and maintains a processing agreement with the Saskatchewan Research Council, a provincial technology and innovation entity.

REalloys recently began trading on the Nasdaq exchange following its merger with Blackboxstocks, marking a new phase of capital market access as it scales operations.