Solcoa raises $75m to scale US rare earth metal production ahead of defence deadline

The financing will support a Nevada plant designed to produce 500 tonnes of rare earth metals annually, as US defence sourcing restrictions are set to expand from January 2027.

Solcoa Industries has secured USD 75 million to expand rare earth metal production in the United States, targeting a supply-chain bottleneck that is becoming increasingly important for defence manufacturers. The company said the funding will support construction and commissioning of its Solcoa One plant in Nevada, which is planned to begin operating in July 2027 with annual capacity of 500 tonnes.

The financing includes USD 45 million in equity led by Bain Capital Ventures, with participation from Gigascale Capital, Long Journey, Felicis, Dylan Field and other investors from the defence and technology sectors. A further USD 30 million comes from debt and equipment financing anchored by J.P. Morgan.

Solcoa said the funds will also support expanded reactor manufacturing at its Alameda, California, facility, alongside growth in its engineering and research teams.

Rare earth metalmaking faces supply-chain pressure

Rare earth metals are used to produce high-performance magnets found in electric vehicles, robotics and defence systems. However, converting refined rare earth oxides into metal, a process known as metallisation, remains a key bottleneck in the supply chain.

Solcoa said China controls 95 per cent of global metallisation capacity, while conventional production methods are expensive, hazardous and difficult to permit.

The company’s expansion comes ahead of a US defence sourcing deadline. Under DFARS 252.225-7052, defence contractors are already restricted from purchasing samarium-cobalt and neodymium-iron-boron magnets produced in China, Russia, Iran or North Korea. From January 1, 2027, the restriction is set to extend to magnets containing rare earths mined, refined, separated, melted or produced in those countries.

The rule increases the importance of securing compliant supplies of rare earth metals, the material stage used in high-performance magnet production.

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Solcoa targets commercial-scale output

Founded in 2025, Solcoa develops halide-free chemistries and modular reactors for rare earth metal production. The company said its process is faster, uses less energy and costs less than conventional molten-salt electrolysis. It also claims its process produces no harmful emissions, including fluoride gases and perfluorocarbons associated with legacy methods.

Solcoa said its reactors can be manufactured in Alameda within weeks, allowing capacity to be added in increments rather than through the construction of a single conventional facility.

The company has grown from a laboratory-scale research reactor to producing more than 10 tonnes of magnet-grade metal annually in under a year. It currently produces neodymium-praseodymium (NdPr) and samarium metal, and said it is already shipping material from Alameda ahead of the 2027 deadline.

Solcoa One is expected to increase annual production to 500 tonnes. The company estimates that its planned NdPr output could supply magnets for up to one million electric vehicles.

“You will not beat China by copying China. The last time America invented a fundamentally new way to make a primary metal was with titanium in the 1940s, and that breakthrough built an entire industry,” said Hooman Reza Nezhad, CEO of Solcoa Industries. “We believe rare earths are the foundation of America's next great industrial era, and we intend to win on the merits of superior American technology”, he added. 

Investors point to domestic supply needs

Investors backing the financing said the company’s technology and planned scale could help address the shortage of rare earth metalmaking capacity outside China.

“Solcoa is already producing rare earth metal at 10 tonnes a year, with a process clean enough to run right here in Alameda, something legacy metallization never could. In just one year, the team has validated a genuinely novel process and chemistry, and they're scaling fast toward commercially meaningful tonnage,” said Mike Schroepfer, former CTO of Meta and Founding Partner of Gigascale Capital.

Alysaa Co, Partner at Bain Capital Ventures said, “American manufacturers have had no real alternative to a Chinese-controlled supply chain for the metal inside every high-performance magnet, and the 2027 defense deadline makes that a today problem. Solcoa closes that gap with a process invented and proven on U.S. soil, at a scale that actually matters.”

James Detweiler, General Partner at Felicis also added, “Western production of magnet-grade rare earth metals rounds to zero, posing an urgent and growing threat to domestic technology and defense industries. Solcoa is the only company attacking this problem with innovation and scale. We're proud to back Hooman and his team as they build the metals company America needs.”

The company’s planned Nevada facility is expected to become one of the Western world’s largest rare earth metallisation operations. Its stated July 2027 start date would place the plant’s planned ramp-up after the January 2027 US defence sourcing deadline, while Solcoa says it is already supplying metal from its Alameda operation.

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