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USA Rare Earth: As Losses Rise, Operational Progress Matters MoreWritten by Leo Miller. Article Posted: 4/1/2026. 
Key Points
- As China wields massive control over the rare earth elements market, USA Rare Earth is working to bolster America's supply chain.
- The small company has ambitious goals, targeting over $2.5 billion in revenue by 2030.
- Despite widening losses, the firm's progress on operational and funding efforts is far more important long-term.
- Special Report: ATLX: Small-Cap Miner with Big-Time Potential
USA Rare Earth (NASDAQ: USAR) is a small company working to solve a big problem: the United States' reliance on China for rare earth elements (REEs). Currently, mining companyMP Materials (NYSE: MP) is the only U.S. firm producing and processing REEs at scale. It is also the only U.S. company making permanent magnets, the vital products manufactured using REEs. Excitement around REE companies helped USA Rare Earth’s shares rise roughly 150% over the past 52 weeks. Still, the basic materials stock is among the market’s most volatile names and is now more than 50% below its highs.
The company recently reported earnings. Its adjusted loss per share widened from $0.15 to $0.19, causing the firm to miss estimates by a meaningful margin. However, for an early-stage company like USAR, revenue and earnings don’t tell the whole story. USAR’s primary objective is to become a fully integrated mine-to-magnet producer in the United States. By examining the operational progress the firm has made, investors can better gauge what to expect going forward. Why Building up REE Magnets Is a Strategic Priority for the U.S. GovernmentThe U.S. government has recognized that REEs—and the permanent magnets made from them—are critical to both economic and national security. Technologies from consumer electronics and electric vehicles to clean-energy infrastructure and defense systems rely on permanent magnets. China dominates this industry and has used that influence to affect prices and geopolitics. Overall, China controls around 60% of worldwide REE mines, 90% of processing, and 94% of permanent magnet production. This is why the U.S. Department of Defense invested $400 million in MP Materials and helped secure a $110/kg price floor on Neodymium-Praseodymium (NdPr) oxide for MP. Producers refine REEs to create NdPr oxide, which is then used to make magnets. In September 2025, that price floor was 86% higher than the market price MP received, illustrating the extent of government support. With that context, let’s review how USAR’s strategy is progressing. USAR’s Site Development and Funding Gain SteamUSAR highlighted several developments in its earnings report that indicate forward momentum. Its Round Top deposit in Texas is the company’s most valuable asset and contains a significant concentration of REEs. Notably, USAR is now targeting commissioning and commercial production at Round Top in late 2028—two years ahead of its previous schedule. The firm acquired Less Common Metals (LCM) in November 2025, which supports important manufacturing steps for eventual magnet production. The acquisition also allowed USAR to generate revenue after having no sales in 2024, because LCM had existing customer relationships. Sales were still small at $1.64 million, but the late-November timing suggests those figures likely reflect roughly a month of revenue. Sales in 2026 should be meaningfully larger. More importantly, LCM’s strategic role in supporting USAR’s long-term mine-to-magnet ambitions outweighs its near-term revenue contribution. USAR has also commissioned its Stillwater magnet production site in Oklahoma. The company expects this facility will enable it to begin fulfilling customer orders for permanent magnets in Q2 2026. Funding is another area where USAR has made progress. The company generated gross proceeds of $1.5 billion from a private stock offering and expects to sign an agreement with the Department of Commerce in April to access an additional $1.6 billion in funding. Most of the Department of Commerce support would be provided as a loan, however, so it is not strictly grant funding. Combined with $360 million in cash and equivalents and proposed support from the French government, USAR could have nearly $3.5 billion available. That would put the company within reach of the roughly $4.1 billion estimated to build out its mine-to-magnet platform. USAR: High Upside Potential With Substantial RisksUSAR is targeting $2.6 billion in revenue in 2030 and $900 million in free cash flow. With a market capitalization near $3.3 billion today, achieving those targets would make the current valuation look inexpensive. That said, the plan faces significant risks. Department of Commerce funding is not guaranteed; if the deal falls through, it would leave a large hole in USAR’s financing. Project costs could exceed current estimates, and construction or mining setbacks could delay large-scale revenue generation. Still, the strategic need to diversify the REE supply chain is a major tailwind for USAR. Its Round Top deposit is particularly rich in heavy REEs, which are required by highly advanced technologies and typically command much higher prices than the light REEs that MP specializes in. Overall, USAR is a high-risk, high-reward investment. It may appeal to investors with strong conviction in its mine-to-magnet strategy, but it requires careful consideration of the funding and execution risks involved. . |
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