US government to become shareholder in startup dedicated to transforming rare earth elements.

The United States government will become a shareholder in the startup Vulcan Elements, which specializes in processing rare earth elements, the company announced on Monday, March 3, in an attempt by Washington to reduce its dependence on China for these metals.

The company, based in Durham, North Carolina, manufactures powerful magnets for industrial use, made from an alloy that includes neodymium, one of the rare earth metals. These magnets are a crucial component for many high-tech sectors.

Vulcan Elements also plans toprocess rare earth elements at its factory located in the Research Triangle Park industrial park, near Durham.

The operation connects the American government to private investors, who will inject $550 million (R$2.94 billion) into Vulcan Elements' capital, according to a statement.

The United States, in turn, will grant a loan of $620 million (R$3.3 billion) and a grant of $50 million (R$267 million) in exchange for receiving Vulcan stock equivalent to that amount.

The government will also lend $80 million (R$428 million) to ReElement Technologies, another American company dedicated to the production of ready-to-process rare earth elements, which had already signed a supply agreement with Vulcan in August.

“Our investment in Vulcan Elements will accelerate the production in the United States of rare earth-derived magnets for American industry,” said Commerce Secretary Howard Lutnick, quoted in the statement.

In the context of trade tensions with the United States, China has progressively restricted its exports of rare earth elements, of which it controls more than 90% of the world refining market.

After a change of stance in early October, US President Donald Trump threatened to increase tariffs on China by 100%. But finally, both countries reached an agreement last week, which includes the suspension of new restrictions on rare earth elements.