As Western defense agencies scramble to secure supplies of metals critical for weapons systems, Ucore Rare Metals Inc. is accelerating plans for a new facility dedicated to producing two of the most urgently needed materials: samarium and gadolinium.

The company announced today it is moving forward with engineering and commercial planning for a first-of-its-kind rare earth processing plant, which will use its proprietary RapidSX™ technology to separate these vital elements. The project is being advanced with conditional backing from the Government of Canada for up to C$36.3 million.

While not household names, samarium and gadolinium are essential components in modern defense technology.

Samarium is a key ingredient in samarium-cobalt (SmCo) permanent magnets, which are valued for their ability to perform under extreme heat and stress. These magnets are found in the guidance systems of precision missiles, the actuators that control flight surfaces on jets like the F-35, and critical radar and sonar equipment. Gadolinium, also now subject to export controls, is used in various electronic and nuclear applications.

The problem, according to Ucore, is not a lack of mined materials, but a critical bottleneck in the middle of the supply chain: refining and separation.

Currently, the vast majority of the world's capacity to separate rare earths into usable oxides is controlled by China. This has created a vulnerability for Western defense contractors, a risk highlighted by China’s recent export licensing controls on certain rare earth elements.

The situation is becoming more acute as the U.S. Department of Defense is actively seeking to boost domestic production of these materials, and new procurement rules are tightening the screws.

Starting January 1, 2027, U.S. defense contractors will be required to comply with stricter sourcing regulations (DFARS) that will cover the entire supply chain for samarium-cobalt magnets. This means any magnet used in a U.S. weapons platform must be traceable to materials processed outside of covered nations, creating a hard deadline for industry to find new, secure sources.

"We're seeing a compliance cliff approaching in 2027," said Pat Ryan, Chairman and CEO of Ucore. "Defense programs don't fail at the mine; they fail at these choke points in the supply chain. Samarium and gadolinium are exactly that kind of choke point right now. Contractors are being pushed to qualify new, Western-aligned sources, and we are advancing a dedicated pathway to meet that timeline."

Ucore's strategy is to rebuild this missing "midstream" capacity in North America. The company’s RapidSX™ technology, which is being engineered to operate without relying on Chinese-sourced equipment or intellectual property, is central to this plan.

The company is currently refining its commercial processes at its Kingston, Ontario facility. Engineers are running tests on various feedstocks, including ionic clays, to optimize the separation of samarium and gadolinium and finalize the design for the new production line.

This work is running in parallel with Ucore's larger project to build the Louisiana Strategic Metals Complex (SMC).

Since the project was first announced, Ucore has seen a significant increase in interest from defense and aerospace companies seeking qualification data and timelines, as the industry races to secure its supply chains ahead of the 2027 deadline and in response to ongoing global supply pressures.