The Defense Logistics Agency (DLA) has awarded a contract to Terves LLC, a subsidiary of REalloys Inc. (NASDAQ: ALOY), to scale domestic production of samarium (Sm) and gadolinium (Gd) metals. This contract addresses a critical national security vulnerability, as the United States currently relies entirely on foreign adversaries for these essential defense metals. REalloys believes the award strengthens its proprietary zero-waste metallothermal technology and supports the expansion of its domestic production platform.
The contract advances REalloys’ direct Sm and Gd metallothermal processing platform, including a revolutionary zero-waste rare earth metallization technology. The company aims to be a first-mover in re-establishing U.S. commercial-scale production of Sm and Gd metals, capabilities that currently do not exist domestically. Global supply of these metals remains almost entirely offshore, exposing U.S. defense and industrial users to geopolitical risk, long lead times, and price volatility.
As the nation’s combat logistics support agency, the DLA manages the global supply chain for the Department of War, NASA, and other government agencies. Through its DLA Strategic Materials division, the DLA also manages the National Defense Stockpile and is charged with securing domestic sources of rare earths to decrease reliance on foreign supply chains. The contract will advance REalloys’ Gd metallization capability while adding direct Sm metal production from mixed rare earth feedstocks, addressing a long-standing bottleneck in U.S. samarium supply. Sm and Gd metals are essential for high-temperature samarium-cobalt permanent magnets, precision guidance systems, aerospace and radar applications, advanced optics, and other defense technologies requiring materials capable of operating in extreme thermal and radiation environments.
REalloys’ approach differs from conventional rare earth processing, which typically relies on large, capital-intensive solvent extraction plants. Instead, the company is developing a modular, semi-continuous processing architecture that enables direct reduction of Samarium-Europium-Gadolinium (SEG) feedstocks into high-purity metals. Gd metal is produced through low-temperature, zero-waste metallothermal reduction, including in alloyed forms such as Gadolinium-Cobalt. This DLA contract will allow REalloys to scale this process while completing full plant designs covering both wet chemistry and reduction-to-metal operations. A central deliverable is the engineering design for a 300 ton/year production facility built around modular reactors that can be rapidly deployed, replicated, and scaled to meet both steady-state and surge demand from the Department of War and commercial markets.
REalloys has filed a provisional patent covering its direct reduction of SEG feedstocks and the zero-waste metallization process, underscoring the proprietary nature of the platform. By eliminating the need for large solvent extraction facilities and directly recycling all byproducts, the company aims to significantly reduce capital requirements, reduce production costs by up to 50%, shorten deployment timelines, and enable distributed domestic production aligned with U.S. defense and industrial policy priorities. Sm and Gd currently serve as the critical “invisible backbone” of the United States’ most advanced defense platforms. In the past, the U.S. has been 100% dependent on offshore sources for the separated metal forms of these elements, creating a single point of failure for national security. The company believes that the DLA contract directly addresses this vulnerability by validating and scaling REalloys’ ability to produce these metals domestically, effectively closing a strategic gap in the supply chain for materials that have no substitute in extreme environments.
Samarium-Cobalt magnets are the only magnetic material capable of withstanding the extreme heat of fighter jet engines and the supersonic friction of precision-guided munitions, while Gadolinium is essential for both stealth radar technology and the safety control rods in nuclear reactors. By establishing a sovereign source for these “high-heat” and “neutron-absorbing” metals, REalloys is securing the foundational components required for the next generation of American aerospace, defense, and energy independence. For more information, visit www.realloys.com.
