Energy Fuels and Vulcan Elements: A Strategic Alliance to Redefine U.S. Rare Earth Supply Chains

The U.S. critical mineral supply chain has long been a geopolitical vulnerability, with China dominating over 85% of rare earth processing and 60% of global production. This imbalance has left the U.S. exposed to supply shocks, export restrictions, and strategic bottlenecks in sectors ranging from defense to decarbonization. However, a new partnership between Energy Fuels Inc. and Vulcan Elements is poised to disrupt this dynamic. By creating a vertically integrated, U.S.-based supply chain for rare earth magnets, the collaboration addresses a critical gap in national security and positions investors at the intersection of energy transition and technological sovereignty.

The Strategic Imperative: Why Rare Earth Magnets Matter

Rare earth elements (REEs) are the unsung heroes of modern technology. Neodymium-praseodymium (NdPr) and dysprosium (Dy) oxides, for instance, are indispensable for high-performance neodymium iron boron (NdFeB) magnets. These magnets power electric vehicles (EVs), wind turbines, and advanced defense systems—from precision-guided missiles to stealth aircraft. The 2025 Critical Minerals List, which ranks REEs among the top 10 most economically impactful minerals, underscores their strategic value. With global demand for rare earth magnets projected to grow at a 8.6% CAGR through 2030, the U.S. cannot afford to remain dependent on Chinese processing.

Energy Fuels and Vulcan Elements' partnership is a direct response to this challenge. Energy Fuels, the only U.S. company capable of processing monazite into separated rare earth oxides, will supply Vulcan with high-purity NdPr and Dy oxides starting in Q4 2025. These materials will be sourced from U.S. mines and refined at Energy Fuels' White Mesa Mill in Utah, which has already achieved commercial-scale production of NdPr oxide and is piloting heavy rare earth oxides. Vulcan, in turn, will manufacture sintered NdFeB magnets in Durham, North Carolina, for both defense and commercial clients. This closed-loop system bypasses Chinese processing entirely, aligning with the Biden administration's push for domestic critical mineral security.

Market Dynamics and Policy Tailwinds

The U.S. Department of Defense (DoD) has signaled its commitment to this transition. In 2024, the DoD entered a $58.5 million partnership with MP Materials to build a magnet manufacturing facility, securing a 10-year offtake agreement and a price floor of $110/kg for NdPr oxide. This model—public-private collaboration with guaranteed demand—creates a stable revenue stream for companies like Energy Fuels and Vulcan. The DoD's investment also reflects a broader strategy to reduce reliance on China, particularly for defense-grade magnets used in drones, radar systems, and hypersonic weapons.

Meanwhile, decarbonization is another tailwind. Rare earth magnets are essential for EV motors and wind turbine generators. With global EV sales expected to surpass 14 million in 2025 and wind energy capacity expanding rapidly, demand for NdPr and Dy will surge. Vulcan's focus on high-performance magnets for AI infrastructure and robotics further diversifies its revenue streams, tapping into the $4.15 billion rare earth market projected for 2025.

Competitive Landscape and Investment Thesis

The partnership's success hinges on Energy Fuels' unique processing capabilities and Vulcan's advanced manufacturing. Energy Fuels' White Mesa Mill is the only U.S. facility capable of separating monazite into individual rare earth oxides—a process that China has historically controlled. By scaling this capacity, Energy Fuels can capture a growing share of the $6.28 billion rare earth market by 2030. Vulcan, meanwhile, is leveraging $65 million in Series A funding to expand production, positioning itself as a key supplier for both the DoD and private sector.

Investors should also consider the broader ecosystem. MP Materials' 10X Facility, USA Rare Earth's Oklahoma plant, and the DoD's stake in MP's separation capabilities signal a coordinated effort to rebuild U.S. supply chains. These initiatives create a network effect, where each player's success reinforces the others'. For example, Energy Fuels' heavy rare earth oxide pilot (with dysprosium samples available in August 2025) could unlock new markets for Vulcan in high-temperature magnets, which are critical for defense applications.

Risks and Mitigations

While the partnership is promising, challenges remain. Heavy rare earth elements (HREs) like dysprosium and terbium are still dominated by China, which controls nearly 90% of processing. Energy Fuels' pilot program for HREs is a step forward, but scaling production will require significant capital and time. Additionally, global rare earth prices are volatile, influenced by geopolitical tensions and Chinese export policies.

However, the DoD's price floor mechanism and long-term offtake agreements mitigate these risks. For Energy Fuels, the $110/kg floor for NdPr oxide ensures profitability even if global prices dip. Vulcan's diversified customer base—spanning defense, AI, and EVs—also reduces exposure to sector-specific downturns.

Conclusion: A High-Conviction Play

Energy Fuels and Vulcan Elements' collaboration is more than a business deal; it's a strategic pivot in the U.S. critical mineral landscape. By securing a domestic supply chain for rare earth magnets, the partnership addresses national security vulnerabilities while capitalizing on the decarbonization boom. For investors, this represents a high-conviction opportunity in a sector poised for decades of growth. As the U.S. races to outpace China in clean energy and defense innovation, companies like Energy Fuels and Vulcan are not just participants—they are architects of the new industrial frontier.