June 2 (Reuters) – USA Rare Earth said on Tuesday it will invest $1.2 billion to build a magnet manufacturing and rare earth metals facility in South Carolina, as it expands domestic production capacity.
Shares of the company rose 5.9% to $31.1 in morning trade.
Rare earths are a group of elements used in electric vehicles, medical equipment, oil refining, wind turbines and defense.
• The plant in Cherokee County is expected to produce 6,400 tonnes per year of neodymium-iron-boron (NdFeB) magnets and 5,000 tonnes of rare earth metals and alloys, with commissioning targeted to begin in 2028.
• USA Rare Earth said site work is expected to begin in the coming months.
• The facility will complement the company’s existing magnet plant in Oklahoma, as it aims to build total domestic capacity of 10,000 tonnes per year of magnets and metals.
• The company said the magnets and metals will support industries such as defense, aerospace, semiconductors, AI and energy that rely on secure rare earth supply chains.
• The investment comes as the United States seeks to reduce reliance on China for rare earth materials. USA Rare Earth is backed by the U.S. government through a $1.6 billion debt-and-equity funding package to develop another facility in Texas.
• However, the company has faced scrutiny from U.S. lawmakers, who say the structure of the funding package could give the government “highly concerning” leverage over the company while also boosting U.S. Commerce Secretary Howard Lutnick’s family-run investment firm.
(Reporting by Varun Sahay in Bengaluru; Editing by Devika Syamnath)
Comments