Key Takeaways:
- USA Rare Earth invests $1.2 billion in South Carolina magnet facility
- Plant targets 6,400 tonnes/year of NdFeB magnets plus 5,000 tonnes of metals
- Commissioning set for 2028 as US reduces reliance on Chinese rare earths
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USA Rare Earth invests $1.2B in South Carolina magnet plant
USA Rare Earth (USAR.O) will invest $1.2 billion to build a magnet manufacturing and rare earth metals facility in Cherokee County, South Carolina, as the US pushes to break China's grip on critical mineral supply chains.
The facility at Bailey Industrial Park in Blacksburg is expected to create about 490 jobs and will complement the company's existing magnet plant in Stillwater, Oklahoma, USA Rare Earth said Tuesday.
Targeting 6,400 tonnes of magnets per year
Once fully operational, the Blacksburg site will 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 metal and alloy. The company's total domestic production capacity is expected to reach 10,000 metric tons per year of each product.
Engineering work and equipment procurement are underway, with site work expected to begin in the coming months. Commissioning is targeted for 2028.
The magnets and metals will support industries including defense, aerospace, semiconductors, artificial intelligence and energy — all of which rely on secure rare earth supply chains currently dominated by China, which controls roughly 60 percent of global rare earth mining and over 85 percent of processing.
Government backing and political scrutiny
USA Rare Earth is backed by a $1.6 billion debt-and-equity funding package from the US government to develop another facility in Texas. The investment has drawn scrutiny from US lawmakers who say the funding structure could give the government leverage over the company while also benefiting Commerce Secretary Howard Lutnick's family-run investment firm, Reuters reported.
Shares of USA Rare Earth rose 5.9 percent to $31.10 in morning trading Tuesday.
The South Carolina investment comes as alternative technologies emerge to reduce reliance on Chinese rare earths. Niron Magnetics is commercializing iron-nitride magnets that use no rare earths, while Germany's ZF Friedrichshafen has developed an EV motor that eliminates magnets entirely. Japan's Daido Steel has produced neodymium magnets free of heavy rare earths, now used by Honda in hybrid vehicle motors.
This article is for informational purposes only and does not constitute investment advice.
[1] Does the World Need Chinese Rare Earths? Not Necessarily, Say These Companies - WSJ[2] USA Rare Earth Selects South Carolina for Magnet Manufacturing Site[3] USA Rare Earth to invest $1.2B, create 490 jobs in SC town west of Charlotte[4] USA Rare Earth to invest $1.2 bln in South Carolina facility to boost domestic supply[5] USA Rare Earth selects South Carolina for $1.2B magnet manufacturing, rare earth metals facility
