USA Rare Earth brings forward commercial production plans by two years

[Ben Graham]

USA Rare Earth (Nasdaq: USAR) will bring forward the planned commercialization of its Round Top project in Texas by two years, with first production targeted for late 2028, the company said on Wednesday.

Round Top is the richest known deposit of heavy rare earth elements, which are crucial to high-performance permanent magnets used in high-tech applications such as electric vehicles, wind turbines and defense systems. It is also the largest US source of gallium and beryllium.

The decision to accelerate the Round Top timeline, said USAR, follows promising results of solvent-extraction (SX) pilot work that has allowed its Hydromet demonstration facility in Colorado to begin operations in early 2026.

Parallel-process approach

According to the company, the Hydromet facility will operate five SX circuits continuously for 2,000 to 4,000 hours to generate the operational data required to proceed with commercial plant design. These circuits will target heavy rare earth elements, particularly dysprosium (Dy) and terbium (Tb), while also extracting additional critical minerals including hafnium and zirconium.

This novel parallel-process approach is expected to save the company tens of millions of dollars, while enabling USAR to complete its definitive feasibility study (DFS) by early 2027, USAR said, adding that an earlier completion of DFS would allow it to move Round Top into commercial production in late 2028.

“Beginning commercial production at Round Top two years earlier than anticipated would be an exciting milestone made possible by the team’s technical capabilities, process knowledge and ingenuity,” Barbara Humpton, CEO of USA Rare Earth, stated in a press release.

“As global demand for rare earth magnets continues to rise and geopolitical risks escalate, accelerating domestic production is essential for securing the long-term competitiveness of US manufacturing.”

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Shares of USAR, however, dropped on the news, falling as much as 4.3% to $16.56 in New York. Its market capitalization is just over $2.3 billion.

Mine-to-magnet chain

The Round Top project is majority owned and being developed by USAR as part of an integrated mine-to-magnet value chain to build a reliable domestic supply of critical minerals. Other key components of the chain include a 310,000-square-foot magnet manufacturing facility in Stillwater, Oklahoma, and a processing and separation laboratory in Wheat Ridge, Colorado.

The Oklahoma facility, set to enter commercial production in the first half of 2026, would be the largest facility outside China with metal-and-alloy-making and strip-casting capability. At full capacity, it is expected to produce nearly 5,000 tonnes of magnets annually, according to company estimates.

In January, USAR achieved a major production milestone at Round Top by producing the first sample of dysprosium oxide with a purity of 99.1%. The same month, the Oklahoma plant also produced its first batch of sintered magnets.