Energy Fuels Secures Pentagon Loan for Rare Earth Push as Uranium Output Hits Target Early

Energy Fuels shares surge 8% after US Department of Defense backs rare earth and uranium expansion with $725 million loan to counter China's mineral dominance.

The US Department of Defense has thrown its weight behind Energy Fuels with a conditional $725 million loan, sending shares in the rare earth and uranium producer up more than 8% on Thursday to €14.44. The financing from the Office of Strategic Capital signals Washington’s determination to break China’s stranglehold on critical mineral processing.

The 20-year loan is earmarked for two specific projects: expanding processing infrastructure at the White Mesa Mill in Utah — America’s only conventional uranium mill — and building a new metals and alloys plant for rare earths. Energy Fuels already processes monazite at the site into oxides such as neodymium-praseodymium, dysprosium and terbium, materials essential for permanent magnets used in electric vehicles, robotics, defence and clean energy.

The Pentagon’s backing comes as Energy Fuels delivers on another front. The company expects to reach its annual uranium production target by June 30, churning out around 1.6 million pounds of U3O8 — the low end of its 1.5 to 2.5 million pound guidance. The current processing run at White Mesa will wrap up by the end of June, after which the mill will be retooled for rare earth separation work beginning in July.

That retooling marks a decisive step into heavy rare earths. Commercial production of samarium, europium, gadolinium, terbium and dysprosium is slated to begin between late 2027 and early 2028. Phase two envisions annual capacity of roughly 6,300 tonnes of neodymium-praseodymium oxide, along with 80 tonnes of terbium oxide and 288 tonnes of dysprosium oxide. Critically, the mill is designed to handle uranium and rare earths simultaneously — not as an either-or proposition.

Cost advantages are already apparent. Uranium processing costs have fallen to historically low levels of between $9 and $12 per pound, giving margins a significant boost. Meanwhile, long-term uranium contract prices are trading above spot prices, a clear signal that utilities are paying premiums for assured supply in a tightening market.

CEO Ross Bhappu underscored the strategic rationale behind the Pentagon loan, saying it strengthens national security and creates transparent supply chains. Energy Fuels sees itself on a path to becoming a linchpin of the Western rare earth supply chain, a goal that now has the financial backing of the US government.

Despite the positive headlines, the stock still sits 37.9% below its 52-week high of €23.24 reached in January. Yet the year-to-date gain stands at an impressive 187%. The relative strength index of 48.8 suggests the shares are neither overbought nor oversold, leaving room for further upside if the loan closes.

Analysts view the Pentagon commitment as a long-term catalyst, though they caution that the deal remains subject to customary conditions including further due diligence and final contract signing. If those hurdles are cleared, Energy Fuels will have both the funding and the operational momentum to press deeper into rare earths while keeping its uranium engine running.