Ucore Rare Metals Inc. (TSXV: UCU; WKN A2QJQ4) announces a significant step forward in the development of supply chains for critical raw materials in North America: The Canadian government has offered the company conditional support of up to CAD 36.3 million for the construction of a processing plant in Kingston, Ontario! What makes this project unique is that the plant will focus exclusively on refining the rare earth elements samarium (Sm) and gadolinium (Gd) – two elements that are now not only on China’s export control lists, but are also playing an increasingly important role in the Western defense and high-tech industries.
Ucore Becomes Central to Canada’s Raw Materials Strategy
The funds come from two sources: up to CAD 26.3 million from Natural Resources Canada (NRCan) as part of the Global Partnerships Initiative and an additional CAD 10 million from FedDev Ontario. Formally, the commitment is subject to due diligence, program requirements, and a final contribution agreement – but politically, Ottawa is sending a clear signal: Canada not only wants to extract raw materials but also establish midstream processing capacities for rare earths in the country.
This is exactly where Ucore comes in. The company plans to build the first dedicated North American production line for samarium and gadolinium oxides in Kingston. These oxides are the necessary precursors for the production of samarium-cobalt (SmCo) magnets, which are used wherever conditions are hot, compact, or safety-critical – for example, in radar and guidance systems, in aviation, in medical technology, or in nuclear applications. With the new plant, Ucore is addressing precisely the gap that Canadian and US authorities have been pointing out for some time: it is not so much a lack of raw materials, but rather a lack of reliable, allied midstream capacities.
Why Samarium and Gadolinium are Now at the Top of the Agenda
The timing is no coincidence. In 2025, China extended its export controls to several rare earths, including Sm and Gd, as well as technology-related magnetic goods. At the same time, stricter procurement rules are taking effect in the US: According to DFARS 225.7018 – “Restriction on the Acquisition of Certain Magnets, Tantalum, and Tungsten” – from January 1, 2027 on, SmCo magnets for US defense programs must be completely free of “covered countries” – i.e., from the mine to the oxide, metal, and alloy to the finished magnet. This means that anyone who wants to deliver in 2027 must now establish qualified, non-Chinese sources.
Ucore is positioning Kingston to fill this gap. The company also emphasizes that the plant will be based on its proprietary RapidSX™-technology – a separation process designed for the separation and purification of rare earths that is faster and more environmentally friendly than the processes used primarily in China. This means that Ucore can not only process primary concentrates but also, through a cooperation with the Australian company Metallium for example, integrate recycling and tailings streams in the future, which will further increase security of supply.
Supplement to the US Project: Two Lines, one Goal
The project will also be exciting in conjunction with Ucore’s already known US activities. In Louisiana, the company is building the Louisiana Strategic Metals Complex (SMC) with a total of $22.4 million in support from the US Department of Defense, so far. The focus there is on heavy rare earths for NdFeB magnet grades (keywords: dysprosium, terbium). Kingston will now serve the Sm/Gd track. This means that Ucore will cover two particularly sensitive magnet value chains in the future: NdFeB for high-performance e-mobility and electronics, and SmCo for high-temperature and defense applications.
This setup is attractive to both politicians and the industry: it ensures technological diversification, reduces dependence on a single process or supplier country, and enables Canadian and US procurers to test and qualify compliant supply chains at an early stag
Next Steps for Ucore and What the Market Will Observe
Even if the announcement is clear, several points remain critical for execution – and will be closely monitored by industry and investors:
- Final Funding Agreement: The currently communicated CAD 36.3 million are conditional. Planning certainty will only arise with a signed Contributions Agreement.
- Permits in Ontario: The federal government has indicated accelerated processing, nevertheless environmental, site, and community requirements must be met.
- Feedstock Security: Ucore explicitly speaks of a “Pathway to Samarium and Gadolinium Security.” It will be crucial to reliably combine raw materials from allied jurisdictions (e.g., Australia) and recycling paths – and to reproducibly process these streams in RapidSX™.
- Customer Qualification: The actual success will depend on how quickly Ucore can bring Sm and Gd oxides into the specification windows of major magnet suppliers and develop binding off-take agreements from them.
Conclusion: Canada’s government openly states its goal: The Canadian government has openly stated its goal: to anchor critical minerals in allied supply chains in order to make its own industry—from clean energy to defense—more independent. With Kingston, Ucore has the opportunity to become a highly visible building block of this strategy.
