Highlights

• The U.S. Department of War awarded $29.9 million to ElementUS Minerals to build America's first commercial gallium and scandium refining capability.
• This initiative directly challenges China's 95% control over these critical defense materials.
• ElementUS will process bauxite residue at facilities in Louisiana and Texas.
• The project is part of a broader $900 million DPA initiative spanning 17 projects.
• The initiative signals a coordinated industrial rebuild rather than a symbolic gesture.
• While the 'no new mining' narrative offers environmental appeal, investors should note the following:
  • Large-scale bauxite residue processing still requires chemical-intensive separation.
  • Significant tailings management is necessary.
  • Complex permitting is involved.

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How about a $29.9 million signal shot—small money, big message. The U.S. Department of War’s new $29.9 million Defense Production Act (DPA) Title III award to ElementUS Minerals is more than a line item. It’s a strategic declaration: Washington is finally treating gallium and scandium with the seriousness they deserve. The award will fund a demonstration plant in Gramercy, Louisiana, and early-stage development at the company’s Critical Resource Accelerator in Cedar Park, Texas.

For investors across the rare earth and critical minerals sector, this announcement fits into the broader policy push under Executive Order 14241, which explicitly directs agencies to expand domestic critical mineral production.

What Rings True: A Supply Chain Void the U.S. Can No Longer Ignore

Gallium and scandium are legitimate choke points. China controls over 95% of global gallium refining and dominates scandium oxide exports through Russia-adjacent intermediaries, later-stage processing, and integrated aluminum operations. Defense platforms—from missile seekers to hypersonic components—depend on these materials.

The U.S. has zero commercial gallium refining and only lab-scale scandium production, so the administration is correct that domestic capability remains dangerously thin. ElementUS, leveraging millions of tons of bauxite residue from alumina refining, is applying a credible “secondary recovery” model similar to what Europe is piloting in Greece and France. This is grounded in fact.

Where theStory Stretches: The ‘No New Mining’ Halo

The press release sells a soft environmental halo—“cleaning up waste with no additional mining.” That’s technically accurate but incomplete. Processing bauxite residue at scale still demands chemical-intensive separation, large-tailings management, and permitting hurdles. Recovery costs for scandium remain notoriously high, and extraction efficiency from red mud varies dramatically.

This is not misinformation—but it is an optimistic gloss.

What Investors Should Really Watch: The Strategic Chessboard

The most notable piece for Rare Earth Exchanges readers is not the award size but the industrial positioning:

• ElementUS could become the first meaningful U.S. producer of both gallium and scandium, breaking two of Beijing’s most durable monopoly positions.
• This award joins 17 other DPA-funded projects totaling nearly $900 million, signaling a coordinated industrial rebuild rather than a symbolic gesture.
• The use of Ukraine Supplemental Appropriations for domestic mineral capacity signals a bipartisan recognition: critical mineral security is defense security.

The bias?A predictable war-fighting narrative uplift—but the underlyingindustrial facts are sturdy.

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