U.S. Army Tapped Domestic Firm for Drone Magnets
The selection of Vulcan Elements signals a push to secure local supply chains for drone manufacturing.
Updated on Sept. 23, 2026 in Manufacturing
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The U.S. Army has selected North Carolina-based Vulcan Elements to supply rare earth magnets for its SkyFoundry drone initiative. The program aims to manufacture one million small drones annually while reducing reliance on foreign components.
Why it matters
The move aims to insulate domestic production from geopolitical supply risks following Chinese export restrictions on rare earth materials and drone parts. This pivot shifts the competitive landscape for manufacturers reliant on international raw materials.
The planned Benson, North Carolina plant aims for 10,000 metric tons of annual magnet capacity, a scale-up intended to support national production alongside the 51,000 metric tons of rare earth oxide produced domestically in 2025.
The players
Vulcan Elements
A North Carolina-based manufacturer specializing in the production of rare earth magnets for defense and industrial applications.
U.S. Army
The primary branch of the U.S. military responsible for overseeing the SkyFoundry drone procurement and production initiative.
Ucore
A rare earth elements processing company slated to supply material inputs for domestic magnet production beginning in 2027.
ReElement Technologies
A processing and recovery firm that holds an offtake agreement with Vulcan Elements to support magnet manufacturing.
The details
Vulcan Elements currently produces neodymium iron boron magnets at a facility in Durham, North Carolina, and is constructing a larger plant in Benson. To secure its supply chain, the firm maintains an offtake agreement with ReElement Technologies and a memorandum of understanding with Ucore. These partnerships are designed to establish a domestic pipeline for materials, anticipating that Ucore will begin supplying Louisiana-sourced material in 2027.
Timeline
2025: The Durham magnet facility opened and U.S. mines produced 51,000 metric tons of oxide.
April 2025: China mandated new licenses for rare earth material exports.
August 2026: China implemented stricter export reviews on drones and key components to the U.S.
September 23, 2026: The U.S. Army selected Vulcan Elements for the SkyFoundry program.
2027: Ucore is expected to begin supplying material from Louisiana.
Market Landscape
This initiative follows a pattern of domestic industrial policy responses aimed at mitigating the impact of Chinese export restrictions on critical components. The pivot highlights the increasing necessity for defense contractors to build regionalized supply chains.
Operators in the defense and electronics sectors should monitor domestic capacity expansions as a signal for potential supplier shifts. Managers must assess their vulnerability to international export controls on rare earth materials and consider multi-sourcing strategies with domestic vendors.
The takeaway
The transition to domestic magnet production highlights a broader push to decouple defense supply chains from foreign regulatory volatility. Operators should audit their material sourcing agreements to identify dependencies that could be interrupted by future export controls.
What happens next
Ucore is scheduled to begin supplying material for the program in 2027.
Further reading
For more on shifts in the domestic production sector, see our coverage of Manufacturing.
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