$1.95B in conditional loans, none closed: Pentagon capital office backs battery anodes, scandium and magnets

The money: loans, equity and grants

The Aug. 7 package uses three different tools, and they behave differently.

OSC loans. The three conditional commitments are:

• Sila Nanotechnologies, $1.4 billion. The loan, paired with outside equity, would expand production of silicon-carbon battery anodes and build a lithium-ion cell manufacturing facility ^[1]. It is the largest single item announced Friday.
• Sunrise Energy Metals, $400 million. The money would build out the Syerston scandium project in New South Wales, Australia, from mine through metallization and additive manufacturing ^[2].
• Niron Magnetics, $150 million. OSC financing, alongside private capital, would help build a $605 million plant in Sartell, Minnesota, able to make up to 1,500 tons a year of rare earth-free permanent magnets ^[3].

Each release says the borrower must still complete “customary additional steps” before financial close, including financial, legal and technical requirements ^{[1, 2, 3]}. Sunrise, the only borrower whose terms are public, laid them out on Aug. 10. The commitment letter proposes a 25-year facility, drawn in phases, with each disbursement conditioned on project milestones, the company putting in specified amounts of equity and its receipt of binding offtake agreements ^[7]. The company states plainly that the letter “does not constitute an offer, agreement or binding commitment to provide financing” ^[7].

The department says that across fiscal 2026, OSC has committed more than $8.4 billion in debt financing and mobilized more than $17.8 billion in total public and private capital ^[1, 3].

Industrial base equity. The bauxite deal runs through a different office. The Economic Defense Unit and the Office of the Assistant Secretary of War for Industrial Base Policy are putting $85.5 million of Industrial Base Analysis and Sustainment (IBAS) money into Strategic Bauxite USA as equity, with $64.5 million more from private investors ^[4]. The State Department separately funded infrastructure tied to the project ^[4].

Workforce awards. The Office of the Under Secretary for Acquisition and Sustainment listed three proposed awards: $32.7 million to the Colorado School of Mines, $25 million to a South Dakota School of Mines consortium that includes the University of Kentucky and Missouri S&T, and $23.6 million to Johns Hopkins University ^[5]. CNBC put the administration’s total for the day at $3 billion, including $58 million in Export-Import Bank financing for Westwater Resources, Global Advanced Metals and 5E Advanced Materials ^[6].

Where does OSC’s lending capacity come from?

From the 2025 reconciliation law. Public Law 119-21, signed July 4, 2025, appropriated $500 million to the “Department of Defense Credit Program Account” for OSC’s capital assistance program aimed at critical minerals and related industries, and another $1 billion to the same account for the program generally ^[8]. Both amounts stay available until Sept. 30, 2029, and each provision caps the loan principal it can support at $100 billion ^[8]. The same law provided $5 billion for critical-minerals investments through the Industrial Base Fund, $3.3 billion for Industrial Base Fund grants and purchase commitments, $2 billion for the National Defense Stockpile and $20 million for the OSC workforce ^[8].

That structure explains how a small appropriation backs large commitments. The appropriated dollars cover the subsidy cost of a loan, not its face value ^[8].

The programs: what the inputs feed

Batteries. The department ties Sila’s anodes and cells to satellite operations, unmanned aerial systems and munitions ^[1]. Under Secretary of War for Research and Engineering Emil Michael called the commitment part of a push to “secure the critical batteries that the Joint Force requires” ^[1].

Scandium. The department says no primary mine-source of scandium exists anywhere, and that foreign competitors account for about 80% of mining production and nearly all processing ^[2]. OSC’s Asad Akram tied Sunrise’s deposit to “enhanced capabilities of modern fighter aircraft” ^[2]. Sunrise plans an initial 60 tonnes a year of high-purity scandium oxide over a 32-year operating life, is studying an expansion to 180 tonnes, and is targeting first production in the second half of 2028 ^[7]. As part of its talks with OSC, the company added scandium metal refining capacity in the United States to the project scope ^[7]. The department gets a right of first offer on Sunrise’s output ^[2].

Sunrise is not the only scandium play with a defense customer. CNBC noted that NioCorp, which attended the roundtable, is building a scandium mine to supply Lockheed Martin ^[6].

Magnets. Niron makes permanent magnets from iron and nitrogen rather than rare earths, and recently finished a two-year Department of Energy pilot that produced 1 to 2 tons a year ^[3]. The Sartell plant would take that to as much as 1,500 tons ^[3]. For suppliers of motors, actuators and guidance hardware, the question is qualification: whether rare earth-free magnets can be designed into defense programs.

Refractory bauxite. The Strategic Bauxite money will buy and expand the First Bauxite mine in Guyana, build calcination capacity, and contribute to a follow-on brown-fused alumina plant in the United States ^[4]. The department says most U.S. refractory-grade bauxite now comes from China or Chinese-owned entities, and that the project, once fully operating, should meet all U.S. military demand for brown-fused alumina ^[4]. The material goes into heat shields, thermal barriers and turbine engines for missiles, rockets, aircraft and space systems ^[4].

Workforce. The Colorado award funds a critical minerals innovation and commercialization hub for pilot-scale work and materials qualification; the Johns Hopkins award funds a recycling hub with AGILEWorks aimed at integration into existing defense platforms ^[5].

The politics

The administration framed the day around the Iran war. CNBC reported that the five-month conflict has used large numbers of precision-guided missiles and air-defense interceptors, that officials and lawmakers warn replenishment could take years, and that the administration disputes reports of major shortages ^[6]. Interior Secretary Doug Burgum, Secretary of State Marco Rubio and Commerce Secretary Howard Lutnick attended ^[6].

OSC director David A. Lorch, who is also a senior adviser to Deputy Secretary of War Steve Feinberg, delivered the lead quote in each loan release ^{[1, 2, 3]}. Michael credited lawmakers for the money: “Congress provided the necessary resources, and OSC is aggressively executing that mandate” ^[2]. Michael Cadenazzi, the department’s top industrial base policy official, said the bauxite deal keeps “critical materials in the western hemisphere” in supply chains that protect the United States and its allies ^[4].

Canberra welcomed the Sunrise loan on Aug. 8. Resources Minister Madeleine King said Syerston “hosts the world’s largest and highest-grade known scandium resource,” according to CNBC ^[6]. Sunrise chairman Robert Friedland tied the financing to the U.S.-Australia critical minerals partnership ^[7].

The next pool of money is a live question on Capitol Hill. The House’s fiscal 2027 budget resolution would let the Armed Services Committee write reconciliation changes adding no more than $60 billion to deficits over 10 years ^[9], a figure this site has reported falls far short of the Pentagon’s ask (earlier coverage). The resolution does not say how much, if any, would go to industrial base lending.

Next milestone

House committees owe reconciliation text to the Budget Committee by Sept. 11, 2026 ^[9]. Sunrise expects to finish capital estimates during August and to put a final investment decision to its board in the second half of 2026 ^[7]. OSC says it is doing “active due diligence” on more scandium deals ^[2]. The OSC appropriations in the 2025 law expire Sept. 30, 2029 ^[8]. No closing date has been given for the Sila or Niron loans ^[1, 3].