Solcoa Industries has raised $75 million to build a commercial rare earth metalmaking plant in California, aiming to reduce the US reliance on China for materials used in electric vehicles, robotics, and defense systems.

The financing will support construction of Solcoa One, a facility planned to begin operations in July 2027 with an annual production capacity of 500 tonnes of rare earth metals. The company says the plant will be among the largest rare earth metallization operations in the Western world.

The funding includes $45 million in equity led by Bain Capital Ventures, with participation from Gigascale Capital, Long Journey, Felicis and other investors. Another $30 million comes from debt and equipment financing anchored by JPMorgan.

Rare earth metals are used to manufacture high-performance permanent magnets that help power electric vehicles, industrial robots, wind turbines and defense equipment. However, converting refined rare earth oxides into usable metals, a process known as metallization, remains a major bottleneck in the global supply chain.

According to Solcoa, China controls approximately 95% of global rare earth metallization capacity. The company says conventional metalmaking methods are expensive, hazardous and difficult to permit, limiting the development of production facilities elsewhere.

The issue is particularly significant for US defense suppliers. Under the Defense Federal Acquisition Regulation Supplement, restrictions already prohibit certain contractors from purchasing samarium-cobalt and neodymium-iron-boron magnets produced in China, Russia, Iran or North Korea.

Beginning January 1, 2027, the restrictions are scheduled to extend to magnets containing rare earth materials mined, refined, separated, melted, or produced in those countries.

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