REalloys Inc. (NASDAQ: ALOY) has announced plans to construct the largest heavy rare earth metallization facility outside China through a partnership with the Saskatchewan Research Council. The facility, expected to begin initial operations in early to mid-2027, represents the first commercial-scale operation capable of meeting 2027 U.S. defense procurement bans on Chinese sourcing.
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 rare earth stockpiles. REalloys will own 100% of the facility, which will integrate with the company's existing metallization operations in Euclid, Ohio—currently the only heavy rare earth metallization capability operating in North America.
This initiative addresses a critical bottleneck in the rare earth industry: secure North American metallization of Dysprosium and Terbium for high-performance defense magnets. The facility will produce approximately 30 tonnes of dysprosium and 15 tonnes of terbium metal annually, with an estimated cost of $40 million. REalloys recently completed $50 million financing, making the project fully funded.
The partnership builds on an agreement announced in December 2025 where REalloys will invest in expanded production capacity at SRC's Rare Earth Processing Facility in Saskatoon 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.
This collaboration 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 timing aligns with new U.S. defense procurement restrictions set to take effect in 2027 under 10 U.S.C. §4872 and DFARS 252.225-7052, which will ban sourcing from non-allied nations including China, Russia, Iran, and North Korea.
Stephen duMont, Chairman of REalloys, emphasized the strategic importance of the project, stating it represents "a defining moment for North American industrial strategy" that creates "the metallization capability that bridges Canadian oxide production with U.S. magnet manufacturing—a critical link that's never existed at scale in the West." He noted the facility will feature AI-enabled process optimization and full compliance with Title 50 defense sourcing requirements.
Mike Crabtree, President and CEO of the Saskatchewan Research Council, highlighted the partnership's significance in creating "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 business and technology leaders, this development represents a significant shift in global rare earth supply chains, reducing Western dependence on Chinese processing capabilities. The establishment of a zero-China nexus supply chain for heavy rare earth metals addresses national security vulnerabilities while creating new opportunities in advanced manufacturing and defense sectors. As the 2027 procurement restrictions approach, this facility positions North American companies to meet defense and industrial requirements without reliance on non-allied nations.
