en.Wedoany.com Reported - USA Rare Earth (Nasdaq: USAR) announced on Tuesday that it will invest $1.2 billion to build a new magnet manufacturing and refined metal plant in Cherokee County, South Carolina. The project is expected to significantly expand domestic capacity for sintered neodymium-iron-boron (NdFeB) permanent magnets and the refined rare earth metals required for their production.

Located at Bailey Industrial Park in Blacksburg, the plant will be USA Rare Earth's third facility in the U.S. It follows a plant in Stillwater, Oklahoma, where the first commercial production line began operations in March, and a separation and processing facility in Wheat Ridge, Colorado. USA Rare Earth is betting on a vertically integrated operation from mining to magnet production, which will help position it as a key supplier to the aerospace, defense, semiconductor, energy, and data center industries.

Operations in Stillwater and Blacksburg will form the core magnet manufacturing segment of USA Rare Earth's "mine-to-magnet" integrated value chain. This value chain encompasses the Round Top heavy rare earth mining and processing project in Sierra Blanca, Texas; a planned acquisition of the Serra Verde mining and processing operation in Goiás, Brazil; the LCM metals and alloys facility in Cheshire, UK; and a planned metallization and alloys facility in Lacq, France.

Once operational, the Blacksburg plant targets an annual capacity of 6,400 metric tons per annum (tpa) of NdFeB rare earth magnets and 5,000 tpa of strip-cast metals and alloys. Combined with the expansion plans for USA Rare Earth's Stillwater facility, the company expects total domestic capacity to reach 10,000 tpa of NdFeB rare earth magnets and 10,000 tpa of heavy rare earth strip-cast metals and alloys. The company stated that engineering work and equipment procurement for the Blacksburg facility are underway, with site work expected to begin in the coming months and production targeted for 2028.

"Cherokee County is the next critical link in the rare earth and magnet value chain we are building across the U.S., UK, Europe, and globally," said Barbara Humpton, CEO of USA Rare Earth, in a press release. "South Carolina offers the talent, infrastructure, and partners we need to move quickly. With this investment, we are bringing back to the U.S. the advanced manufacturing capabilities that America and its allies rely on, from the factory floor to the front line."

China dominates the global rare earth market, controlling the vast majority of mining, processing, and manufacturing. Western governments view this monopoly as a significant national security and supply chain risk and are actively subsidizing alternative projects to counter it. In May, the U.S. Department of Energy selected USA Rare Earth for up to $19.3 million in funding for a rare earth pilot project aimed at boosting the domestic supply chain.

Brazil's antitrust regulator has opened an investigation into the proposed acquisition of Serra Verde, which would give USA Rare Earth control over Brazil's only producing rare earth mine. The mine entered commercial production two years ago and is one of the few projects outside of China capable of producing heavy rare earths at scale. Serra Verde has stated that by next year, the mine could account for half of global heavy rare earth production outside of China.

USA Rare Earth is also facing scrutiny from U.S. lawmakers, who say Washington's investment structure could give the government "highly concerning" influence over the company while also benefiting an investment firm run by the family of U.S. Commerce Secretary Howard Lutnick. In January, the Commerce Department's CHIPS Program Office signed a non-binding letter of intent to provide up to $1.58 billion in funding—including $277 million in grants and $1.3 billion in loans—to USA Rare Earth in exchange for an 8% to 16% equity stake.

Last week, rival rare earth miner MP Materials (NYSE: MP) filed a lawsuit against USA Rare Earth, alleging it stole proprietary magnet technology through a former employee. USA Rare Earth denied the allegations, stating that MP's lawsuit "misrepresents our company, our culture, and our employees," and said it would defend against the claims and respond "appropriately."

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