USA Rare Earth Shares Jump on New Rare-Earth Supply Agreement

USA Rare Earth (USAR) closed +24.6% on Thursday after announcing a strategic supply agreement that strengthens the rare-earth value chain outside China. Its newly acquired subsidiary, Less Common Metals (LCM), will supply high-quality rare-earth materials to Solvay and Arnold Magnetic Technologies, a Compass Diversified (CODI) company, for use in advanced permanent magnets.

Key Details of the Agreement

LCM will provide high-purity rare-earth metals and alloys to Solvay (SVYSF, SLVYY) and Arnold.
The materials will support Arnold’s production of advanced permanent magnets, critical components for EVs, defense systems, and high-performance electronics.
Financial terms of the deal were not disclosed.

Strategic Importance of the Deal

Fortifying a Non-China Rare-Earth Supply Chain

The collaboration arrives weeks after USA Rare Earth completed its $100M acquisition of Less Common Metals, giving it control of the only proven ex-China producer capable of making both light and heavy rare-earth permanent magnet metals at scale.

Barbara Humpton, CEO of USA Rare Earth, emphasized that the partnership represents:

Strengthening of Western rare-earth production capacity
Increasing resilience of the magnet-materials supply chain
Reducing reliance on Chinese processing capabilities

Government Support Adds Momentum

Investor enthusiasm grew further after a Trump administration official stated the U.S. government intends to take more equity stakes in critical minerals companies, signaling deeper federal commitment to domestic mineral security.

Market Reaction

USA Rare Earth (USAR) shares surged 24.6% and extended gains throughout the day.
The announcement highlights increasing investor confidence in Western rare-earth expansion efforts amid rising geopolitical and supply-chain tensions.