France backs USA Rare Earth plant build with $152M

USA Rare Earth (Nasdaq: USAR), through its Less Common Metals (LCM) subsidiary, plans to build a metal and alloy production facility in France next to an oxide processing facility, supported by up to €130 million ($152.4 million) from the French government. Shares rose. 

Carester, a French provider of separation and recycling technologies is currently building its Caremag 1,600-metric-ton-per-year oxide processing facility in Lacq, southwest France, which is scheduled for commissioning in late 2026. USAR’s proposed facility has a annual capacity of 3,750 metric tons and will be co-located at the Caremag plant.

Together, this platform is to establish a supply chain for rare earth processing, metal and alloy production in Europe, the rare earth developer said in a statement on Tuesday. USA Rare Earth holds the Round Top project in Texas, one of the largest deposits of heavy rare earth elements in the United States. 

Integrated value chain

“The development of an integrated rare earth processing and metal-making platform in France enhances USAR’s integrated rare earth value chain, to the benefit of the United States and our allies,” USAR CEO Barbara Humpton said in a release.

The supply chain deal is one of the latest seeking to pair up rare earths mining with downstream processing, whose costs and technological complexities have proven challenging for many countries outside of China.  

USAR shares jumped to a two-month high on the announcement, in line with its peers, as most rare earth-related stocks have been elevated by recent U.S.-Europe tensions surrounding Greenland. By midday, USAR’s shares traded at about $20 apiece in New York, giving it a market capitalization of over $2.7 billion.

Mine-to-magnet

In the U.S., the company is developing an integrated mine-to-magnet value chain of domestic critical minerals production. This strategy is underpinned by Round Top. Heavy rare earths are used in high-tech applications such as electric vehicles, wind turbines and defence systems.

To support this project, the French government has committed to partly funding the facility build, including credits for up to 45% of all eligible equipment and up to €130 million for real estate, USAR said.

Other key components of the chain include a 28,800-sq.-metre magnet manufacturing plant in Stillwater, Okla., and a processing and separation laboratory in Wheat Ridge, Colo.

A pilot breakthrough in December at USAR’s Hydromet facility in Colorado has allowed the company to bring forward the production timeline at Round Top to 2028, two years earlier than expected.

In addition to Round Top’s deposit of heavy rare earths, it also hosts the largest U.S. source of gallium and beryllium.