REalloys Inc. (NASDAQ: ALOY) has been conditionally selected by the U.S. Army to enter exclusive contract negotiations for a long-term Enhanced Use Lease to design, finance, build, and operate heavy rare earth processing facilities at the Tooele Army Depot in Utah, according to a press release from the company.

The selection was made through the Army's Strategic Capital Initiatives program and is described as the first commercial critical-mineral processing award on a U.S. military installation, enacted under Executive Order 14241. REalloys was named alongside a small group of U.S.-organized industry partners selected to establish domestic processing for minerals the Army has identified as essential to munitions, missiles, sensors, and batteries.

The planned facilities would refine dysprosium and terbium, heavy rare earth elements used in high-temperature permanent magnets found in precision-guided munitions, electric motors, and sonar systems. REalloys states it intends to source feedstock from allied nations, including Canada.

Under the Enhanced Use Lease structure, authorized by 10 U.S.C. § 2667, REalloys would bear all costs to finance, design, build, operate, and decommission the facility, with no taxpayer funding involved. The Army retains title to the land. Rent is expected to be paid as in-kind infrastructure improvements to the installation.

Development is targeted to begin as early as 2027, with Initial Operating Capability no later than 2028. The timeline aligns with a January 1, 2027, U.S. federal procurement restriction on Chinese rare earth content in the defense industrial base.

The conditional selection is subject to finalization of definitive agreements within a 90-day period and completion of required environmental and regulatory reviews, including the National Environmental Policy Act, Clean Air and Water Acts, and all applicable federal, state, and local permits. No construction will begin until those reviews are complete.

REalloys is headquartered in Boca Raton, Florida, with operational activities in Euclid, Ohio. The company describes its business model as a mine-to-magnet strategy spanning feedstock, separation, metallization, and magnet manufacturing.