Department of War Strategic Capital Commits $1.8 B to Critical Materials and Battery Production
Strategic Funding Commitments
The Department of War’s Office of Strategic Capital has executed two landmark conditional loan agreements to fortify domestic capacity in critical materials and advanced energy storage. A $400 million commitment to Sunrise Energy Metals Limited will accelerate scandium mining and processing, while a $1.4 billion agreement with Sila Nanotechnologies, Inc. will expand high-performance battery anode production for defense and civilian sectors.
Key Terms of Agreements
- $400 million conditional loan commitment with Sunrise Energy Metals Limited to increase scandium ore extraction, processing infrastructure, and downstream alloy manufacturing capabilities.
- $1.4 billion conditional loan commitment with Sila Nanotechnologies, Inc. to scale production of silicon-dominant anode materials essential for next-generation lithium-ion and solid-state batteries.
Projected Financial Impact
These combined investments totalling $1.8 billion are expected to generate significant economic and security returns. Expansion of the U.S. scandium supply chain will reduce reliance on foreign sources, support high-strength aerospace alloys, and enable fuel cell innovations. Scaling battery material production addresses critical supply bottlenecks for electric vehicles, grid storage, and military applications.
Broader Strategic Outlook
OSC’s use of conditional loan instruments aligns with the Department’s mandate to secure national defense supply chains. Performance-based milestones embedded in the agreements will mitigate risk and ensure accountability. These transactions complement ongoing efforts to mobilize private capital in sectors crucial to defense readiness, technology leadership, and the transition to a clean energy economy.
Next Steps
OSC will monitor progress through quarterly reviews and technical oversight, ensuring projects meet workforce development and domestic supply chain objectives. Pending regulatory approvals, disbursements will commence in Q4 FY2026, with full operational capacity projected by the end of 2028.