USA Rare Earth: A French Fancy?

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Now, listen closely. There’s this company, USA Rare Earth (USAR +8.99%), a wee little sprout of a business trying to coax rare-earthy bits and bobs out of the ground and turn them into magnets. A tricky business, magnets. And today, well, today their shares did a little jig, leaping about 10% by lunchtime. Quite a fuss for a company that, let’s be honest, has been paddling upstream against a rather strong current.

They’ve announced they’re building a factory in France – Lacq, to be precise. A proper factory, mind you, capable of churning out 3,750 metric tons of metal and alloys each year. It’s going to be plonked right next door to another factory, Carester SAS, which is already gearing up to squish and squeeze rare-earth oxides. They expect that one to be ready by 2026. A bit like building Lego, really – one piece connecting to another. Though considerably more expensive, of course.

A Spot of French Generosity

The way it works, you see, is that Carester grabs the raw stuff from the miners, gives it a good old polish, and then shuffles it next door to USA Rare Earth’s LCM bit for turning into proper, powerful magnets. And here’s the truly scrumptious part: the French government is paying. Not a little bit, either. They’re offering to cover up to 45% of the cost of all the shiny new equipment, and a whopping €130 million ($152.6 million) for the land itself. They might even pay the wages! It’s like handing a sweet shop to a child and saying, “Help yourself!”

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A Worthy Investment, or a Fool’s Errand?

Now, the total cost of this grand scheme remains a bit of a mystery. But what’s clear is that the French are awfully keen to foot the bill. Why? Because they want to be the first in Europe to make these rare-earth magnets, and they’re tired of relying on China for their magnetic needs. It’s a bit like a baker deciding to grow his own wheat – a bit of independence is a good thing, wouldn’t you agree?

I still have my reservations about USA Rare Earth, mind you. The forecasts suggest they’ll be losing money for years – all the way to 2030, in fact. A long time to be in the red! But this French windfall is undoubtedly good news. It’s a bit like giving a poorly little plant a generous dose of fertilizer – it might just give it the boost it needs to bloom. Though, let’s be honest, it still needs a lot of sunshine and a hefty dose of luck. And perhaps a very, very patient gardener.

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2026-01-20 20:42