USAR stock rises after unveiling $1.2B rare earth manufacturing hub

USA Rare Earth shares (USAR) rose more than 4% on Tuesday after the company announced plans to build a $1.2 billion magnet manufacturing and refined metals facility in South Carolina.

The project will expand domestic rare earth production capacity as the United States seeks to reduce reliance on Chinese supply chains.

The company said it has selected Cherokee County, South Carolina, as the location for the new operation, which will be built at Bailey Industrial Park in Blacksburg.

At the time of writing, USA Rare Earth stock was up about 4.79% at $30.84.

South Carolina facility to expand production capacity

USA Rare Earth said the new facility will play a key role in its strategy to build a fully integrated domestic rare earth supply chain.

The Blacksburg operation is expected to produce 6,400 metric tons per year of sintered neodymium-iron-boron (NdFeB) rare earth magnets and 5,000 metric tons per year of strip-cast metals and alloys.

Once combined with the company's existing magnet and refined metals operation in Stillwater, Oklahoma, USA Rare Earth expects total domestic production capacity to reach 10,000 metric tons annually for both magnets and heavy rare earth strip-cast metals and alloys.

Engineering work and equipment procurement for the South Carolina site are already underway.

The company said site work is expected to begin in the coming months, with commissioning targeted to start in 2028.

The project is also expected to create approximately 490 high-skill, high-wage jobs in the region.

“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,” said Barbara Humpton, Chief Executive Officer at USA Rare Earth.

South Carolina Governor Henry McMaster also welcomed the investment.

"USA Rare Earth's $1.2 billion investment and the creation of approximately 490 new jobs will have a significant impact on Cherokee County,” McMaster said.

Focus on strategic industries

According to the company, magnets and refined metals produced at the facility will support a range of industries that increasingly depend on secure supplies of rare earth materials.

These include aerospace, defense, semiconductors, artificial intelligence, medical technology, energy, and advanced manufacturing.

USA Rare Earth added that it has secured a confirmed energy supply from Duke Energy for the facility. 

Rare earth materials are essential components in electric vehicles, wind turbines, oil refining equipment, defense systems, semiconductor manufacturing, and medical imaging technologies.

The company said the new South Carolina operation will complement its broader mine-to-magnet strategy, strengthening domestic manufacturing capabilities across the rare earth value chain.

Pentagon policy boosts demand for US production

The investment comes as policymakers push to strengthen domestic rare earth supply chains amid concerns about dependence on China.

The US Department of Defense is set to ban Chinese-origin sintered NdFeB magnets in defense applications beginning in January 2027, increasing demand for domestic production capacity.

China currently controls roughly 90% of global processed rare earth minerals and magnet production, making supply chain diversification a strategic priority for the United States and its allies.

USA Rare Earth is also backed by a $1.6 billion debt-and-equity funding package from the US government to support development of another facility in Texas.

However, the company has faced scrutiny from some lawmakers who have raised concerns about the structure of the funding arrangement and its implications.

With the South Carolina project now moving forward, USA Rare Earth is positioning itself to capitalize on growing demand for domestically produced rare earth magnets and metals as industries and governments seek more secure supply chains.

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