USA Rare Earth (Nasdaq: USAR) announced Tuesday it will invest $1.2 billion in a new magnet manufacturing and refined metals operation in Cherokee County, South Carolina.
The project is expected to significantly expand domestic production capacity for sintered neodymium-iron-boron (NdFeB) permanent magnets and the refined rare earth metals from which they are made, the company said.
Located in the Bailey Industrial Park in Blacksburg, the build will be the company’s third in the US – it also has a facility in Stillwater, Oklahoma, which commissioned its first commercial production line in March, and a separation and processing facility in Wheat Ridge, Colorado.
USA Rare Earth is betting on vertically integrated operations stretching from mining to magnet production will help position it as a cornerstone supplier to aerospace, defence, semiconductors, energy and data centre industries.
The Stillwater and Blacksburg operations will form the magnet manufacturing centerpiece of USA Rare Earth’s integrated, mine to magnet value chain, which spans the Round Top heavy rare earth mining and processing project in Sierra Blanca, Texas, and the planned acquisition of the Serra Verde mining and processing operation in Goiás, Brazil; the LCM metal and alloy facility in Cheshire, United Kingdom; and a planned metallization and alloy facility in Lacq, France.
Once online, the Blacksburg facility is targeting production capacity of 6,400 metric tons per annum (tpa) of NdFeB rare earth magnets and 5,000 tpa of strip-cast, metal and alloy. Combined with the planned expansion at the company’s Stillwater facility, USAR expects total domestic production capacity to reach 10,000 tpa of NdFeB rare earth magnets and 10,000 tpa of heavy rare earth strip-cast, metal and alloy.
Engineering work and equipment procurement for the Blacksburg facility is underway, with site work expected to commence in the coming months and commissioning targeted to begin in 2028, the company said.
“Cherokee County is the next critical link in the rare earth and magnet value chain we’re building across the United States, the United Kingdom, Europe and around the globe,” USA Rare Earth CEO Barbara Humpton said in a news release.
“South Carolina offered the workforce, the infrastructure and the partners we needed to move quickly. With this investment, we’re bringing home the advanced manufacturing capabilities that America and its allies depend on, from the factory floor to the front lines,” Humpton said.
China dominates the global rare earth market, controlling the vast majority of extraction, processing, and manufacturing. Western governments consider this monopoly a significant national security and supply chain risk, and are actively subsidizing alternative projects to counter it.
In May, the U.S. Department of Energy selected USA Rare Earth to receive up to $19.3 million for a pilot rare earth processing project aimed at boosting domestic supply chains.
Under scrutiny
Brazil’s antitrust watchdog has opened an investigation into the proposed Serra Verde buy, which would give USA Rare Earth control of Brazil’s only producing rare earth mine. The operation, which entered commercial production two years ago, is one of the few outside China capable of large-scale heavy rare earth production. Serra Verde has said the mine could account for half of global ex-China heavy rare earth output by next year.
USAR has also faced scrutiny from U.S. lawmakers, who say the structure of Washington’s investment could give the government “highly concerning” leverage over the company while also boosting U.S. Commerce Secretary Howard Lutnick’s family-run investment firm.
The Commerce Department’s CHIPS Program Office in January signed a non-binding letter of intent to provide up to $1.58 billion in funding to USA Rare Earth — including a $277 million grant and a $1.3 billion loan — in exchange for an equity stake of between 8% and 16%.
Last week, rival rare earth miner MP Materials (NYSE: MP) filed a lawsuit against USAR alleging that its rare earth mining rival stole its proprietary magnet technology through an ex-employee.
USA Rare Earth denied the allegations, saying MP’s lawsuit “has misrepresented our company, our culture, and our people,” and that it would defend itself against the claims and respond “appropriately.”
