Pentagon Awards $4.22M to Rare Earth Salts for Terbium Oxide Production to Strengthen Magnet Supply Chain

The U.S. Department of Defense (DoD) announced a $4.22 million contract to Rare Earth Salts, a company based in Beatrice, Nebraska, to develop and expand the production of terbium oxide from recycled fluorescent light bulbs.

Terbium is a rare earth element critical to the production of magnets used in various defense systems. The funding comes through the Defense Production Act Investment (DPAI) office and supports the National Defense Industrial Strategy's goal of strengthening domestic supply chains.

Dr. Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy, highlighted the strategic importance of this initiative. "This award adds a domestic source for one of the most difficult-to-obtain rare earth elements. Rare Earth Salts' capability will help the United States establish a mine-to-magnet supply chain without reliance on foreign sources of material," she said.

Terbium plays a key role in neodymium iron boron (NdFeB) magnets, providing temperature resilience. These magnets are vital components in numerous defense applications, including aircraft, submarines, and missiles. However, with terbium comprising less than 1% of most rare earth deposits, it is one of the most challenging elements to source.

Rare Earth Salts is one of the few producers of terbium oxide outside of China, and the company uses environmentally conscious recycling processes to recover other valuable rare earth elements such as lanthanum, cerium, europium, and yttrium, all of which have applications in both commercial and defense sectors.

The DPAI office has awarded over 50 contracts in FY2024, amounting to $518.7 million across various programs. These awards are managed by the Office of the Deputy Assistant Secretary of Defense for Industrial Base Resilience's Manufacturing Capability Expansion and Investment Prioritization (MCEIP) directorate.