The U.S. government signed a $725 million conditional loan commitment on Thursday with Energy Fuels to boost domestic processing of rare earth elements, part of its efforts to reduce reliance on China.

Shares of Energy Fuels surged 9.25% in morning trading on Thursday in New York.

Energy Fuels, which specializes in ⁠uranium production, will expand its operations into rare-earth separation and metallization, which is crucial for the production ⁠of permanent magnets, the U.S. Department of War's Office of Strategic Capital said in a release.

The company's increased production of rare-earth oxides "will directly support permanent magnet facilities across the broader U.S. industrial base and improve supply chains for other specialty defense and industrial products," the OSC said.

Over the last year, several countries, including ⁠the U.S., have stepped up investments in rare-earth mining ⁠and ⁠processing following China's move to curb exports of rare-earth magnets.

Such magnets are used to make motors in electric vehicles, wind turbines, hard disk drives, and medical devices such as MRI machines.

Energy Fuels must fulfill financial, legal, technical, and other due diligence requirements as part of the conditional loan agreement, the OSC said, without elaborating.