REalloys Inc. (NASDAQ: ALOY) announced plans to construct the largest heavy rare earth metallization facility outside China through a partnership with the Saskatchewan Research Council, with initial operations targeted for early to mid-2027. The facility represents the first commercial-scale operation capable of meeting 2027 U.S. defense procurement bans on Chinese sourcing, addressing a critical national security vulnerability in strategic materials supply chains.
The heavy rare earth metal facility will be built in Saskatoon before being relocated to Ohio to serve U.S. defense industrial base customers and supply Defense Logistics Agency strategic stockpiles. REalloys will own 100% of the facility, which will integrate with the company's existing metallization operations in Euclid, Ohio. The project is fully financed following REalloys' recent $50 million funding round, with the facility expected to cost approximately $40 million and produce 30 tonnes of dysprosium and 15 tonnes of terbium metal annually at full commercial scale.
This initiative creates North America's first integrated heavy rare earth value chain, linking Canadian resource security and midstream processing with downstream U.S. metallization and manufacturing. The partnership builds on an existing agreement where REalloys invests in expanded production capacity at SRC's Rare Earth Processing Facility in exchange for 80% of the facility's output. SRC's facility, described as the first and largest commercial-scale rare earth processing facility in North America, will produce high-purity neodymium-praseodymium metal and dysprosium and terbium oxides for further processing at REalloys' new facility.
The timing coincides with impending U.S. defense procurement restrictions under 10 U.S.C. §4872 and DFARS 252.225-7052 set to take effect in 2027, which will prohibit sourcing from non-allied nations including China, Russia, Iran and North Korea. REalloys Chairman Stephen duMont emphasized that "this is not a pilot plant; this will be full scale commercial capacity, built with zero Chinese nexus, AI-enabled process optimization, and full compliance with Title 50 defense sourcing requirements." The company believes this creates an unparalleled foundation that brings proven scale, capability, technical maturity, and operational readiness to an industry vulnerable from a national security perspective.
SRC President and CEO Mike Crabtree noted that "this partnership with REalloys creates the Western hemisphere's first end-to-end rare earth metal capability, powered by collaboration and stability, not dependency." The project reflects broader alignment between Canada and the United States under Title 50 and related defense production frameworks to secure critical materials within allied borders. For more information about the Saskatchewan Research Council, visit https://www.src.sk.ca. Additional company information is available through REalloys' investor website at https://www.realloys.com and SEC filings at https://www.sec.gov.
