USA Rare Earth: A Mostly Harmless Venture?

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USA Rare Earth (USAR 4.21%). The name itself suggests a certain… scarcity. As if rare earths were, well, common enough to misplace regularly. They’re not, of course. Which is precisely the point. This company is attempting to build a business around things the planet doesn’t readily offer up. A noble, if slightly improbable, undertaking. They currently process these materials – turning lumps of geological awkwardness into magnets and other useful bits – but that’s merely the prelude. Think of it as the warm-up act for a full-scale planetary resource extraction symphony.

Currently, revenues trickle in from European processing – a legacy acquisition, Less Common Metals. Perfectly named, you’ll agree. They anticipate a US facility in 2026, adding another revenue stream. But the real game, the grand ambition, is a mine. A mine that promises to yield a remarkable 15 of the 17 rare-earth elements. (The other two, presumably, are exceptionally shy, or have excellent lawyers.) And, as a bonus, potentially gallium and beryllium – materials critical for everything from smartphones (which, let’s face it, run the world) to national defense (which attempts to keep the world from falling apart). A full package, indeed. From digging stuff out of the ground to making things that blink and beep.

USA Rare Earth Just Received a Substantial… Encouragement

The US government, in a move that could be interpreted as either strategic foresight or a desperate attempt to diversify supply chains, has invested a considerable sum in USA Rare Earth. 16.1 million shares and a $1.3 billion loan. Which is a lot of money. Enough money, one suspects, to buy a small country. Or, at least, a very large number of shovels. This investment, naturally, solidifies the path forward. It’s always easier to build a mine when someone else is footing the bill. Though one must wonder if the government accountants fully appreciate the sheer geological improbability of finding enough rare earths to justify the expenditure. (It’s a bit like searching for a specific grain of sand on a particularly large beach, only with more paperwork.)

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Commercial operation is now projected for 2028. Which, in mining terms, is practically tomorrow. However, “commercial operation” is a phrase that should be approached with a healthy dose of skepticism. It doesn’t mean the mine is actually producing at full capacity. It merely means they’ve managed to get the conveyor belts moving. Reaching full capacity could take several more years. (Think of it like launching a rocket: getting it off the ground is only about 10% of the problem. The other 90% involves not exploding.)

Where Will USA Rare Earth Be in Five Years?

In roughly five years, USA Rare Earth could have its business fully up and running. A monumental achievement, assuming everything goes according to plan. (A big assumption, given the inherent unpredictability of geology, government regulations, and the general laws of physics.) The U.S. government’s support is, of course, a significant advantage. However, there’s likely to be a considerable amount of red ink between now and then. Building a mine is an expensive undertaking. And not the kind of expense that’s easily offset by selling magnets.

The target is clear. But most investors would be wise to remain on the sidelines until USA Rare Earth demonstrates more concrete progress. This is a long-term opportunity, after all. No need to rush into a situation that could, quite literally, go underground. (And not in a good way.) It’s a bit like waiting for the perfect moment to invest in a spaceship manufacturer. Exciting, perhaps. But best to see if the rocket actually flies first.

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2026-02-11 18:42