DLA Contract Advances Domestic Production of Critical Rare Earth Metals for Defense
The Defense Logistics Agency has awarded a contract to Terves LLC under topic DLA212-004 to scale next-generation metallothermal processes for samarium and gadolinium metals. PMT Critical Metals, a wholly-owned subsidiary of REalloys, acquired 100% of the rare-earth assets of Terves LLC and Powdermet Inc. on March 31, 2025. The company believes this DLA award strengthens proprietary technology now held by REalloys and supports expansion of domestic production at a time when the Department of War continues to identify rare earth supply security as a strategic vulnerability.
This contract advances REalloys’ direct samarium and gadolinium metallothermal processing platform including revolutionary zero-waste rare earth metallization technology. It positions the company as a first-mover in re-establishing U.S. commercial-scale production of these metals, capabilities that do not currently exist domestically. Global supply of these metals remains almost entirely offshore, leaving U.S. defense and industrial users exposed to geopolitical risk, long lead times, and price volatility.
As the nation’s combat logistics support agency, the DLA manages the global supply chain for the Department of War, NASA, and numerous other government agencies. Through its DLA Strategic Materials division, the agency also manages the National Defense Stockpile, charged with securing domestic sources of rare earths to decrease reliance on foreign supply chains. The company believes the contract will advance REalloys’ gadolinium metallization capability while adding direct samarium metal production from mixed rare earth feedstocks, addressing a long-standing bottleneck in U.S. samarium supply.
Samarium and gadolinium metals are essential inputs for high-temperature samarium-cobalt permanent magnets, precision guidance systems, aerospace and radar applications, advanced optics, and other defense and dual-use technologies that require materials capable of operating in extreme thermal and radiation environments. Samarium-cobalt magnets are the only magnetic material capable of withstanding the extreme heat of fighter jet engines and the supersonic friction of precision-guided munitions, while gadolinium is essential for both stealth radar technology and the safety control rods in nuclear reactors.
REalloys’ approach differs from conventional rare earth processing, which typically relies on large, capital-intensive solvent extraction plants. Instead, the company is developing a modular, semi-continuous processing architecture that enables direct reduction of Samarium-Europium-Gadolinium feedstocks into high-purity metals. Gadolinium metal is produced through low-temperature, zero-waste metallothermal reduction, including in alloyed forms such as Gadolinium-Cobalt. The DLA contract will allow REalloys to scale this process while completing full plant designs covering both wet chemistry and reduction-to-metal operations.
A central deliverable of the contract terms is the engineering design for a 300 ton/year production facility built around modular reactors that can be rapidly deployed, replicated, and scaled to meet both steady-state and surge demand from the Department of War and commercial markets. REalloys has filed a provisional patent covering its direct reduction of SEG feedstocks and the zero-waste metallization process, underscoring the proprietary nature of the platform. By eliminating the need for large solvent extraction facilities and enabling direct recycling of all byproducts, the company aims to significantly reduce capital requirements, cut production costs by up to 50%, shorten deployment timelines, and enable distributed domestic production aligned with U.S. defense and industrial policy priorities.
The United States has been 100% dependent on offshore sources for the separated metal forms of these elements, creating a single point of failure for national security. The company believes the DLA contract directly addresses this vulnerability by validating and scaling REalloys’ ability to produce these metals domestically, effectively closing a strategic gap in the supply chain for materials that have no substitute in extreme environments. By establishing a sovereign source for these high-heat and neutron-absorbing metals, REalloys is securing foundational components required for the next generation of American aerospace, defense, and energy independence.
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