USA Rare Earth Soars, To Build Plant In France With Government Support

USA Rare Earth (USAR), a US-based (duh) rare earth miner, refiner and processor, which for much of the past year lived in MP Minerals’ shadow amid expectations that it too will receive government generosity, surged on Tuesday on news that it will build a facility in Lacq, France, capable of producing 3,750 metric tons per year of rare earth metals and alloys; and while it will finally get government funding, the source is not the US but the French government, which doesn’t matter: in a time when China is cracking down on all rare earth exports, anyone who can provide alternatives will benefit no matter where they are located. 

The USAR facility, which will be developed through the company’s European subsidiary, Less Common Metals Europe, will be co-located with Carester SAS’s 1,600-metric-ton-per-year Caremag rare earth oxide processing facility, which is scheduled for commissioning in late 2026.

Together, the sites are expected to establish an integrated supply chain for rare earth processing, metal and alloy production in Europe, USA Rare Earth said Tuesday.

But the reason why the stock is surging is because the French government has approved direct tax credits for the project under its C3IV program, covering up to 45% of eligible equipment costs and up to 130 million euros ($151.4 million) for real estate, and is also considering support for hiring and training programs. From the press release:

The French government has committed to address multiple aspects of LCM Europe’s capital and operating requirements. LCM Europe was approved for direct credits under the C3IV program of up to 45% of all eligible equipment and up to a total of €130m for real estate. The French government is also interested in providing support for hiring and training programs to bolster talent development and skills building at LCM Europe’s new facility.

USA Rare Earth said the project will strengthen its integrated rare earth value chain and support the development of a secure transatlantic supply chain.

“The development of an integrated rare earth processing and metal-making platform in France enhances USAR’s integrated rare earth value chain, to the benefit of the United States and our allies,” said Barbara Humpton, Chief Executive Officer of USAR. “We are proud to establish Europe’s first metal-making platform, which will accelerate the realization of a secure, sustainable transatlantic rare earth value chain.”

USAR stock soared 11% on the news, a rare gainer in a market dominated by selling.