Investment Opportunities in Rare Earth Mining
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 09 2026
0mins
Should l Buy USAR?
Source: NASDAQ.COM
- Government Support: The U.S. government plans to invest $1.6 billion in USA Rare Earth, significantly reducing risks associated with the Round Top project and enhancing its competitiveness in the rare earth market, likely attracting more investor interest.
- Production Capacity Expansion: MP Materials aims to commission a new heavy rare-earth separation facility at Mountain Pass by mid-2026, diversifying its product offerings while securing over $500 million in funding through a partnership with the Department of Defense, strengthening its market position.
- Deep-Sea Mining Prospects: TMC The Metals Company has partnered with Korea Zinc to harvest polymetallic nodules from the seafloor, which is expected to boost production of copper and nickel, addressing a projected 50% increase in demand and enhancing its competitiveness in the metals market.
- Strong Market Demand: With rising political interest in securing critical mineral supplies, companies like USA Rare Earth and MP Materials are gaining investor attention, which is expected to yield substantial returns for long-term investors.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy USAR?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on USAR
Wall Street analysts forecast USAR stock price to rise
5 Analyst Rating
5 Buy
0 Hold
0 Sell
Strong Buy
Current: 18.200
Low
15.00
Averages
22.75
High
28.00
Current: 18.200
Low
15.00
Averages
22.75
High
28.00
About USAR
USA Rare Earth, Inc. is a supplier of sintered neo magnets and other rare earth metals. The Company is engaged in developing a NdFeB magnet manufacturing plant in Stillwater, Oklahoma, and intends to establish domestic rare earth and critical minerals supply, extraction, and processing capabilities to both supply its magnet manufacturing plant and market surplus materials to third parties. It is focused on developing domestic rare earth production that offers sustainable and secure domestic supply of materials critical to key industries. Its vertically integrated approach consists of sourcing rare earth elements (REEs), in addition to other critical minerals such as gallium, to producing finished NdFeB magnets. The Company serve a variety of industries, such as defense, robotics, electric vehicles, wind power, appliances, cordless tools and computing and semiconductors. The Company owns, Less Common Metals Ltd., which is a scaled ex-China rare earth metal and alloy manufacturer.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
USA Rare Earth Secures $1.6 Billion Investment from U.S. Government
- Government Investment Support: The U.S. government has announced a $1.6 billion funding package for USA Rare Earth, including a $1.3 billion loan and $277 million in federal grants, aimed at reducing dependence on Chinese rare earths and enhancing the company's market position.
- Production Capacity Enhancement: USA Rare Earth plans to launch its Stillwater manufacturing facility in the first half of 2026, producing neodymium iron boron magnets for high-growth sectors like defense and aerospace, with an expected output of over 10,000 metric tons by 2029 to meet the increasing U.S. demand.
- Full Supply Chain Control: By advancing the Round Top project, the company anticipates achieving full control over its metal-to-magnet supply chain by 2028, granting it a first-mover advantage in the U.S. market, improving margins, and mitigating risks associated with third-party suppliers.
- Long-term Revenue Expectations: If all goes according to plan, the company forecasts annual revenues of approximately $2.6 billion and EBITDA of $1.2 billion by 2030, and while currently pre-revenue, government support will reduce investment risks and provide the necessary funding for commercialization.
See More
International Stocks Outperform U.S. Markets: Is It Time to Increase Your Overseas Investments?
U.S. Stock Performance: The S&P 500 has had a challenging year, remaining flat due to high valuations, concentration in certain indices, and a weaker dollar.
Foreign Equities Outperforming: The iShares MSCI ACWI ex U.S. ETF has outperformed the State Street SPDR S&P 500 ETF Trust by eight percentage points in 2025 and continues to lead by over seven points this year.
Shift in Market Dynamics: This marks a significant shift after nearly two decades of U.S. stock market dominance, raising questions about the sustainability of this trend.
Investment Professionals' Perspectives: Investment professionals are being surveyed on whether they will continue to allocate more resources to foreign markets amidst these changes.
See More
U.S. Advances Critical Minerals Price Floor System
- Market Stabilization Mechanism: U.S. Under Secretary of State Jacob Helberg stated that the new pricing mechanism aims to stabilize markets by unlocking private investment, expected to roll out through the Pax Silica program, although specific implementation details remain unclear.
- Strengthened International Cooperation: The U.S. has reached agreements with the European Union, Japan, and Mexico to introduce price floor policies to address supply chain vulnerabilities, demonstrating U.S. leadership in global critical mineral supply chains.
- Positive Stock Market Reaction: Following the announcement, rare earth mining companies such as United States Antimony Corp (UAMY), MP Materials (MP), and USA Rare Earth Inc. (USAR) gained over 2% in pre-market trading, reflecting market optimism regarding the new policy.
- Divergent Investor Sentiment: Despite the stock price increase, retail investor sentiment on Stocktwits leaned bearish, indicating cautious attitudes towards long-term prospects, although some users expressed optimism about the sector's future.
See More
USA Rare Earth Secures Major Funding for Domestic Supply Chain
- Funding Support: USA Rare Earth has entered a non-binding agreement with the U.S. Department of Commerce for up to $1.6 billion in funding, which includes $1.3 billion in senior secured loans and $277 million in direct funding, significantly bolstering its mine-to-magnet business development.
- Project Progress: The manufacturing facility in Oklahoma will produce neodymium iron boron magnets essential for electric vehicle motors and wind turbines, with operations expected to commence in early 2026; analysts project revenues of $50 million in 2023 and $281 million by 2027.
- Acquisition Strategy: USA Rare Earth acquired UK-based Less Common Metals for $100 million in cash and 6.74 million shares, securing the feedstock needed for its Stillwater facility and reducing reliance on Chinese sources, thereby enhancing its competitive position.
- Market Outlook: With the U.S. focusing on critical minerals, USA Rare Earth is well-positioned to benefit from the domestication of supply chains; despite currently having no commercial operations, its future growth potential is attracting aggressive investors.
See More
Investment Risks Intensify for USA Rare Earth Stocks
- Market Dominance: China currently controls nearly 70% of the global rare earth supply, creating significant dependency risks for the U.S. in high-tech sectors, particularly defense and aerospace, prompting the government to expedite investments in domestic production.
- Major Investment Plans: USA Rare Earth is developing a massive deposit in Texas and constructing a processing facility in Oklahoma, targeting daily extraction of 40,000 metric tons of rare earth and critical minerals by 2030 to meet the needs of the government and defense contractors.
- Shareholder Dilution Risk: The U.S. government received 16.1 million shares and 17.6 million warrants as part of the deal, which, while enhancing USA Rare Earth's survival odds, dilutes existing shareholders, with total shares potentially increasing by 75%.
- Negative Market Reaction: Despite the funding deals improving long-term success prospects, the stock has fallen over 25% since the announcements due to the misalignment of government and shareholder interests, leaving the current market cap at $4.2 billion without any revenue generation yet.
See More
USA Rare Earth Aims to Localize Magnet Production
- Rare Earth Resource Advantage: USA Rare Earth controls the Round Top Mountain in Texas, which contains 15 rare earth metals and significant lithium deposits; if successfully developed, it could greatly enhance U.S. self-sufficiency in the rare earth supply chain.
- Government Investment Support: The Trump administration announced a $1.6 billion deal in 2026 to acquire a 10% stake in USA Rare Earth, with funds allocated for developing the Round Top mine and a magnet manufacturing facility in Oklahoma, highlighting the government's commitment to domestic production.
- Market Competition Challenges: Despite federal backing, USA Rare Earth faces high costs for mine construction and manufacturing while contending with China's dominance in the global permanent magnet market, which poses significant competitive risks.
- Investment Risk Advisory: While the company has long-term potential, the numerous uncertainties involved suggest that investors should proceed with caution, and conservative investors might be better served by considering rare earth-focused metal exchange-traded funds (ETFs) to mitigate risk.
See More
USA Rare Earth Secures $1.6 Billion Investment from U.S. Government
- Government Investment Support: The U.S. government has announced a $1.6 billion funding package for USA Rare Earth, including a $1.3 billion loan and $277 million in federal grants, aimed at reducing dependence on Chinese rare earths and enhancing the company's market position.
- Production Capacity Enhancement: USA Rare Earth plans to launch its Stillwater manufacturing facility in the first half of 2026, producing neodymium iron boron magnets for high-growth sectors like defense and aerospace, with an expected output of over 10,000 metric tons by 2029 to meet the increasing U.S. demand.
- Full Supply Chain Control: By advancing the Round Top project, the company anticipates achieving full control over its metal-to-magnet supply chain by 2028, granting it a first-mover advantage in the U.S. market, improving margins, and mitigating risks associated with third-party suppliers.
- Long-term Revenue Expectations: If all goes according to plan, the company forecasts annual revenues of approximately $2.6 billion and EBITDA of $1.2 billion by 2030, and while currently pre-revenue, government support will reduce investment risks and provide the necessary funding for commercialization.
See More
International Stocks Outperform U.S. Markets: Is It Time to Increase Your Overseas Investments?
U.S. Stock Performance: The S&P 500 has had a challenging year, remaining flat due to high valuations, concentration in certain indices, and a weaker dollar.
Foreign Equities Outperforming: The iShares MSCI ACWI ex U.S. ETF has outperformed the State Street SPDR S&P 500 ETF Trust by eight percentage points in 2025 and continues to lead by over seven points this year.
Shift in Market Dynamics: This marks a significant shift after nearly two decades of U.S. stock market dominance, raising questions about the sustainability of this trend.
Investment Professionals' Perspectives: Investment professionals are being surveyed on whether they will continue to allocate more resources to foreign markets amidst these changes.
See More
U.S. Advances Critical Minerals Price Floor System
- Market Stabilization Mechanism: U.S. Under Secretary of State Jacob Helberg stated that the new pricing mechanism aims to stabilize markets by unlocking private investment, expected to roll out through the Pax Silica program, although specific implementation details remain unclear.
- Strengthened International Cooperation: The U.S. has reached agreements with the European Union, Japan, and Mexico to introduce price floor policies to address supply chain vulnerabilities, demonstrating U.S. leadership in global critical mineral supply chains.
- Positive Stock Market Reaction: Following the announcement, rare earth mining companies such as United States Antimony Corp (UAMY), MP Materials (MP), and USA Rare Earth Inc. (USAR) gained over 2% in pre-market trading, reflecting market optimism regarding the new policy.
- Divergent Investor Sentiment: Despite the stock price increase, retail investor sentiment on Stocktwits leaned bearish, indicating cautious attitudes towards long-term prospects, although some users expressed optimism about the sector's future.
See More
USA Rare Earth Secures Major Funding for Domestic Supply Chain
- Funding Support: USA Rare Earth has entered a non-binding agreement with the U.S. Department of Commerce for up to $1.6 billion in funding, which includes $1.3 billion in senior secured loans and $277 million in direct funding, significantly bolstering its mine-to-magnet business development.
- Project Progress: The manufacturing facility in Oklahoma will produce neodymium iron boron magnets essential for electric vehicle motors and wind turbines, with operations expected to commence in early 2026; analysts project revenues of $50 million in 2023 and $281 million by 2027.
- Acquisition Strategy: USA Rare Earth acquired UK-based Less Common Metals for $100 million in cash and 6.74 million shares, securing the feedstock needed for its Stillwater facility and reducing reliance on Chinese sources, thereby enhancing its competitive position.
- Market Outlook: With the U.S. focusing on critical minerals, USA Rare Earth is well-positioned to benefit from the domestication of supply chains; despite currently having no commercial operations, its future growth potential is attracting aggressive investors.
See More
Investment Risks Intensify for USA Rare Earth Stocks
- Market Dominance: China currently controls nearly 70% of the global rare earth supply, creating significant dependency risks for the U.S. in high-tech sectors, particularly defense and aerospace, prompting the government to expedite investments in domestic production.
- Major Investment Plans: USA Rare Earth is developing a massive deposit in Texas and constructing a processing facility in Oklahoma, targeting daily extraction of 40,000 metric tons of rare earth and critical minerals by 2030 to meet the needs of the government and defense contractors.
- Shareholder Dilution Risk: The U.S. government received 16.1 million shares and 17.6 million warrants as part of the deal, which, while enhancing USA Rare Earth's survival odds, dilutes existing shareholders, with total shares potentially increasing by 75%.
- Negative Market Reaction: Despite the funding deals improving long-term success prospects, the stock has fallen over 25% since the announcements due to the misalignment of government and shareholder interests, leaving the current market cap at $4.2 billion without any revenue generation yet.
See More
USA Rare Earth Aims to Localize Magnet Production
- Rare Earth Resource Advantage: USA Rare Earth controls the Round Top Mountain in Texas, which contains 15 rare earth metals and significant lithium deposits; if successfully developed, it could greatly enhance U.S. self-sufficiency in the rare earth supply chain.
- Government Investment Support: The Trump administration announced a $1.6 billion deal in 2026 to acquire a 10% stake in USA Rare Earth, with funds allocated for developing the Round Top mine and a magnet manufacturing facility in Oklahoma, highlighting the government's commitment to domestic production.
- Market Competition Challenges: Despite federal backing, USA Rare Earth faces high costs for mine construction and manufacturing while contending with China's dominance in the global permanent magnet market, which poses significant competitive risks.
- Investment Risk Advisory: While the company has long-term potential, the numerous uncertainties involved suggest that investors should proceed with caution, and conservative investors might be better served by considering rare earth-focused metal exchange-traded funds (ETFs) to mitigate risk.
See More
