USA Rare Earth invests in French partner to challenge China's 85% market grip

USA Rare Earth is partnering with French processing specialist Carester to build a rare-earth supply chain outside of China, which currently dominates an estimated 85 percent of global processing. The deal provides USA Rare Earth with access to oxide output from a new French facility starting in 2026.

"This transaction advances and enhances USA Rare Earth’s integrated rare earth value chain, to the benefit of the United States and its allies and partners,” USA Rare Earth CEO Barbara Humpton said in a news release. “We are proud to join this team with a view to establish Europe’s first rare earth oxide and metal-making platform."

The partnership gives USA Rare Earth access to Carester’s future oxide output from its plant in Lacq, France, for its own planned metal-making facility. In return, Carester will receive access to feedstock from USA Rare Earth’s Round Top heavy rare earth and critical minerals mine in Texas. The Lacq facility is scheduled to begin operations in late 2026.

The move is critical for Western nations aiming to reduce their dependency on China for materials essential to high-tech applications, including electric vehicle motors and defense systems. This alliance follows efforts by other Western companies, like industry leader MP Materials, to build a fully independent supply chain from mine to magnet.

China has previously used its dominant position in rare earths during trade disputes, creating supply chain risks for U.S. manufacturing. The development of a transatlantic value chain is a multi-stage process involving mining, ore processing, metal and alloy creation, and finally magnet production.

USA Rare Earth is a newer entrant in the sector and its Round Top mine is not yet in commercial production. The company's stock (USAR) was down 0.5 percent to $16.69 following the announcement. This compares to MP Materials (MP), the largest rare-earth company in the Western Hemisphere, which operates its own mining, processing, and magnet-making facilities.

This article is for informational purposes only and does not constitute investment advice.