USA Rare Earth (USAR) on June 3 announced that it has executed definitive agreements with the US Department of Commerce to unlock nearly $1.6 billion in funding under the CHIPS Act, comprising $277 million in federal funding and up to $1.3 billion in senior secured loans tied to project milestones. Together with a previously announced $1.5 billion private capital raise and earlier financings, this brings the company’s available capital to roughly $3.5 billion.

The day before, USAR said it is investing $1.2 billion in a metallization and sintered magnet plant in Blacksburg, South Carolina, which will be its third US build alongside existing facilities in Stillwater, Oklahoma and Wheat Ridge, Colorado.

The Blacksburg plant is designed to produce 6,400 tonnes per annum of sintered NdFeB magnets and 5,000 tonnes per annum of metals and alloy, which together with planned expansions in Stillwater would lift the company’s total US capacity to 10,000 tonnes per annum for both magnets and alloys (refer to the Adamas Magnet Factory Database). Engineering and equipment procurement are already underway, with site work due to begin in the coming months and commissioning targeted for 2028.

At the start of June, USAR also announced plans to invest more than €175 million ($204 million) in France through 2030 to expand metal, alloy and potential magnet production around Lacq in southwest France, an area that is quickly emerging as a European rare earth hub.

The French build‑out is structured around co‑locating its Less Common Metals subsidiary’s 3,750 tonnes per annum metal and alloy output with Carester’s Caremag 1,600 tonne per annum separation plant which is due for commissioning in late 2026. In April, USAR committed about €40 million for an equity stake in Carester alongside InfraVia Capital Partners.

The creation of an integrated European midstream platform is also underpinned by French C3IV program support covering up to 45% of eligible equipment and up to ~€130 million for real estate and infrastructure. Apart from expanding the Lacq facilities, the additional capital will also be used to develop a potential NdFeB magnet plant in France for which USAR said it is assessing multiple French locations.

In another busy month for USAR, the company announced in late May that its Oklahoma magnet plant began Phase 1a shipments and that its early stage Round Top HREE project, billed as a billion-tonne resource needing $1.4 billion to build, secured a $14.2 million grant from the Texas Semiconductor Innovation Fund.

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Adamas take:

Coming so soon after its $2.8 billion bid for Serra Verde in Brazil, which operates the continent’s only producing ionic-clay mine, the fresh capital committed to midstream capacity in France and funding for its US mine and magnet ambitions make USA Rare Earth’s plans to build a vertically integrated, multi-jurisdiction rare earth giant hard to ignore. 

At the same time, USAR’s mine to magnet and global diversification strategy is complicated by regulatory and legal overhangs.

USAR became the subject of an MP Materials lawsuit filed late‑May in Texas which accuses the company of misappropriating NdFeB magnet grain boundary diffusion formulations via a former MP engineer and passing trade secrets onto third‑party firm FOM Technologies. The complaint also attacks USAR’s track record on project milestones and questions the robustness of the Round Top resource claims. USAR has publicly rejected the allegations and pledged to defend itself.

Brazil’s antitrust regulator, Cade, in May also launched a formal investigation into the Serra Verde deal. Cade’s review will examine not only the change of control at Serra Verde but also the long‑term offtake arrangement backed by US government‑linked funding. The deal is also being challenged in Brazil’s highest court by a group of lawmakers over national security concerns and constitutional protections over strategic mineral assets.

Cade’s probe into the 15‑year Nd, Pr, Dy and Tb offtake structure and the possibility of complications in advancing Round Top to production could turn out to be non‑trivial risks to the timing and flexibility of upstream feed into Lacq and its US facilities, and we expect French counterparties to track both the Brazilian outcome and any IP‑related injunctions closely before locking in multi‑year magnet deals.

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