The U.S. Army announced June 25, 2026, that it has conditionally awarded long-term leases to four companies to build and operate critical mineral processing facilities on several American military installations, including the Tooele Army Depot in Utah.
Securing Critical Mineral Supply Chains
REalloys Inc., a company based in Boca Raton, Florida, has been selected to enter exclusive contract negotiations for an Enhanced Use Lease at the Tooele Army Depot. The facility will focus on refining heavy rare earth elements, specifically dysprosium and terbium, which are essential for producing high-temperature permanent magnets used in precision-guided munitions, sonar, and electric motors.
As reported by the Salt Lake Business Journal, REalloys currently produces alloys at a plant in Ohio and collaborates with the Saskatchewan Research Council in Canada. The new Utah-based facility is intended to establish domestic processing capacity to meet a January 1, 2027, federal procurement ban on Chinese materials within the Defense Industrial Manufacturing Base.
Expanding National Processing Capabilities
The development at Tooele Army Depot is expected to begin as early as 2027, with an initial operating capability targeted for no later than 2028. This initiative is part of the Army's Strategic Capital Initiatives (SCI) program, designed to partner with the private sector to accelerate modernization and reduce dependency on foreign imports.
According to the U.S. Army, these awards represent the first time the military has sited commercial mineral-processing facilities on American military installations through a direct execution of Executive Order 14241. The program aims to build out domestic processing for minerals identified as essential to missiles, sensors, batteries, and other critical defense platforms.
Financial Structure and Land Use
The agreements are structured as Enhanced Use Leases (EULs), a statutory authority that allows the Army to lease underused land without transferring ownership. Under this model, the Army acts as a landlord while the private partner bears all costs related to financing, designing, building, operating, and eventually decommissioning the facility.
Rather than traditional cash rent, the Army stated it prefers receiving "in-kind" consideration, where lessees fund infrastructure improvements that benefit soldiers and installation operations. To mitigate risks, the Army requires a mandatory decommissioning bond to ensure funds are available to return the land to its original condition at the end of the lease.
National Defense and Compliance
The Tooele Army Depot deal is part of a broader rollout involving several other military sites. The Army also announced conditional awards for graphite processing at Anniston Army Depot and Pine Bluff Arsenal, lithium processing at Red River Army Depot, and boron processing at the Tooele Army Depot via Ioneer USA Corporation.
To ensure national security, eligibility for these projects was limited to entities organized under U.S. law with majority domestic ownership and a U.S. place of business. Additionally, any infrastructure improvements must adhere to the Buy American Act and Davis-Bacon prevailing wages.
Environmental Oversight and Future Outlook
The Army emphasized that no construction will begin until all environmental and regulatory reviews, including the Clean Air and Water acts and the National Environmental Policy Act, are fully completed. The agency also noted that lessees must engage with state and local authorities to assess local impacts and propose mitigation strategies.
REalloys CEO Leonard Sternheim stated that the selection validates the company's "mine-to-magnet" strategy and addresses the urgent national need for domestic heavy rare earth capability, noting that much of this processing currently occurs overseas.
