USA Rare Earth: Digging for Dragons (and Magnets)

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The realm of critical minerals, you see, isn’t about rocks. It’s about leverage. And right now, the Kingdom of the United States is attempting to build a rather large lever, one that doesn’t rely so heavily on the somewhat…insular policies of the Eastern Empire1. Specifically, they’re looking at rare-earth elements – not because they’re ‘rare’ in the grand scheme of things, but because finding them in quantities and concentrations that are economically viable is like trying to herd particularly stubborn gremlins.

USA Rare Earth (USAR 3.30%), a company currently engaged in the ambitious project of turning dirt into…well, magnets, is at the center of this particular drama. It’s a venture that requires a certain amount of faith, a robust risk tolerance, and possibly a small offering to the geological deities. The U.S. government, in a move that suggests either remarkable foresight or a desperate attempt to avoid future trade disputes, has agreed to contribute up to $1.6 billion. Which, in the grand scheme of things, is roughly the cost of a moderately lavish wizard’s tower.

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Securing the Dragon’s Hoard (and a Magnet Factory)

This isn’t simply a handout, mind you. It’s a loan, mostly, a ‘senior secured’ one, which sounds reassuringly solid until you realize that ‘secured’ often means ‘secured against the very thing you’re trying to build.’ The remaining portion is direct funding, a gesture of encouragement, or possibly a preemptive attempt to ensure the company doesn’t simply vanish into the ether. They plan to build a manufacturing facility in Stillwater, Oklahoma, and to coax the bounty from the Round Top mine in Texas. The latter is rich in ‘heavy’ rare-earth elements – dysprosium and terbium – the sort of things that make electric motors hum and missiles…well, missile.2

The timeline, they claim, has been accelerated. They’re now aiming for commercial production by late 2028, two years earlier than previously estimated. This is either a triumph of engineering, a feat of optimistic accounting, or a blatant disregard for the laws of physics. Time, as any seasoned portfolio manager knows, is a particularly unforgiving beast.

In the meantime, they’ve acquired Less Common Metals, a UK-based company specializing in, unsurprisingly, less common metals. This is a smart move. It provides them with a readily available supply of strip cast alloy, the raw material for magnet production. It’s a bit like a knight acquiring a reliable blacksmith before charging into battle. Essential, really.

Ramping Up the Alchemy

Currently, USA Rare Earth is, shall we say, pre-revenue. They’re still in the ‘gathering ingredients’ phase of the alchemical process. Analysts, those optimistic soothsayers, predict $50 million in revenue this year, rising to $281 million in 2027. These projections should be viewed with the same skepticism one reserves for prophecies delivered by pigeons. Still, it’s a direction of travel.

The domestication of these supply chains is, undeniably, a critical issue. The Kingdom of the United States is attempting to reduce its reliance on external sources, a sensible strategy, even if it does involve a considerable amount of risk. USA Rare Earth is one of the companies poised to benefit from this shift, assuming, of course, they can actually turn dirt into magnets.

Right now, this is a story stock. A high-risk, high-reward venture. It’s not for the faint of heart, or those who prefer the predictable comfort of established blue chips. But for aggressive investors willing to wait, and possessing a healthy tolerance for geological uncertainty, it has the potential for substantial upside. Just remember, when investing in the pursuit of dragons…er, magnets…always have a fire extinguisher handy.

1The Eastern Empire, naturally, being a polite euphemism for a certain large nation known for its…unique economic practices.
2One should not underestimate the importance of a well-designed missile. It’s not just about destruction; it’s about aerodynamic elegance. And magnets, naturally, are crucial to the guidance system.

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2026-02-17 21:12