USA Rare Earth (USAR 6.21%) stock, one of a handful of start-up companies attempting to jump-start rare-earth oxide mining and rare-earth magnet manufacturing in the United States, soared 10% through 12:20 p.m. ET Tuesday.
USA Rare Earth announced earlier in the day that its Less Common Metals Europe SAS subsidiary will develop a 3,750 metric ton per annum (mtpa) metal and alloy production facility in Lacq, France. The new facility will be co-located with an existing Carester SAS 1,600 mtpa Caremag oxide processing facility in Lacq, which is scheduled for commissioning in late 2026.
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Details, please
The way this seems to work is that Carester will receive rare-earth oxide from miners and process it, then shuttle it next door to LCM for production as rare-earth metal and alloy magnets.
The French government plans to subsidize the project, covering the cost of "up to 45% of all eligible equipment" as well as covering up to €130 million ($152.6 million) for the cost of the real estate. The government may even pay for hiring and training of the employees needed to work at the new plant!
NASDAQ: USAR
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Is USA Rare Earth stock a buy?
It's not clear what the total cost of building the new facility will be. What is clear is that the French government seems willing to bear much of the cost -- which means USA Rare Earth will not need to -- in the interests of building "Europe's first metal-making platform" for rare-earth magnets, and reducing the Continent's dependence upon China for rare-earth magnet supply.
While I still have reservations about USA Rare Earth stock (which forecasts for it to keep losing money until at least 2030, how could I not?), today's announcement is clearly great news for USA Rare Earth.
