Aug 18 (Reuters) - Vulcan Elements, a North

Carolina-based rare earth magnet manufacturer, has agreed to buy

a supply of the critical minerals from ReElement Technologies

that will be sourced outside of China.

The companies, both of which are privately held, declined to

give precise financial terms but said that the price is

"significantly below" the floor of $110 per kilogram that the

U.S. Department of Defense guaranteed to MP Materials ( MP )

last month for the two most popular rare earths.

The contract was signed in mid-July, Vulcan said.

Rare earth oxides are used to make metal that can then be

turned into magnets for use in fighter jets, radar and other

military applications, as well as consumer electronics.

"This pricing will enable Vulcan to be competitive in global

markets," Vulcan CEO John Maslin told Reuters. "We wanted to

make sure the unit economics made sense."

Indiana-based ReElement, which licenses its technology from

Purdue University, will supply Vulcan with "thousands of metric

tons" of rare earth oxides annually for five years beginning in

2026 from outdated electronics or from mine sites, said CEO Mark

Jensen.

ReElement says it can supply the rare earths to Vulcan below

$110 per kilogram because of its use of a processing technique

known as chromatography, which is different than the

industry-standard solvent extraction used by many of its peers.

"We are laser focused on cost," Jensen told Reuters. "We

will see where the market goes, but right now we're focused more

on the market price versus that price floor."

Reuters was first to report last month that the Trump

administration is considering extending that price floor to

other firms, news that was relayed in a close-door Washington

meeting attended by Vulcan, ReElement and others.