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Thursday's Bonus Story USA Rare Earth: As Losses Rise, Operational Progress Matters MoreWritten by Leo Miller. Publication Date: 4/1/2026. 
Key Points - As China wields massive control over the rare earth elements market, USA Rare Earth is working to bolster America's supply chain.
- The small company has ambitious goals, targeting over $2.5 billion in revenue by 2030.
- Despite widening losses, the firm's progress on operational and funding efforts is far more important long-term.
- Special Report: Elon Musk: This Could Turn $100 into $100,000
USA Rare Earth (NASDAQ: USAR) is a small company working to solve a big problem: the United States' reliance on China for rare earth elements (REEs). Currently, mining company MP Materials (NYSE: MP) is the only U.S. firm producing and processing REEs at scale and the only U.S. company making permanent magnets—vital products that use REEs. Excitement around REE companies helped USA Rare Earth's shares rise roughly 150% over the past 52 weeks. Still, the basic materials stock is one of the market's most volatile names and is now down well over 50% from its highs. The company recently reported earnings: its adjusted loss per share widened from 15 cents to 19 cents, causing the firm to miss estimates by a meaningful margin. For an early-stage company like USAR, however, near-term revenue and earnings don't tell the whole story. USAR's primary objective is to become a fully integrated, U.S.-based mine-to-magnet producer. Evaluating the operational progress toward that goal gives investors a clearer picture of what to expect going forward. Why Building up REE Magnets Is a Strategic Priority for the U.S. Government The U.S. government views REEs—and the permanent magnets made from them—as critical to both economic and national security. Technologies ranging from consumer electronics and electric vehicles to clean energy infrastructure and defense systems all rely on these magnets. China currently dominates the REE supply chain and has used that dominance as a geopolitical lever. Overall, China controls roughly 60% of worldwide REE mines, 90% of processing, and 94% of permanent magnet production. That strategic threat is why the U.S. Department of Defense invested $400 million in MP Materials and guaranteed MP a $110/kg price floor on Neodymium-Praseodymium (NdPr) oxide. Producers refine REEs to create NdPr oxide, which is then used to make magnets. In September 2025, that price floor was about 86% above the market price MP received, underscoring the government's support for domestic capability. With that context, here's how USAR's strategy is progressing. USAR's Site Development and Funding Gain Steam USAR highlighted several developments in its earnings report that indicate forward momentum. Its Round Top deposit in Texas is the company's most valuable asset and contains a significant concentration of REEs. Notably, USAR is now targeting commissioning and commercial production at Round Top in late 2028, two years ahead of its previous schedule. The firm acquired Less Common Metals (LCM) in November 2025, which will support key manufacturing steps for eventual magnet production and provided USAR with some revenue after a year with none. Sales were still small—$1.64 million—but because the acquisition closed in late November, that figure likely represents only about a month of revenue. Sales in 2026 should be materially larger, and LCM's strategic role in the mine-to-magnet plan is more important than its near-term revenue contribution. USAR has also commissioned its Stillwater magnet production site in Oklahoma and expects to begin fulfilling customer orders for permanent magnets in Q2 2026. Funding is another positive. The company raised $1.5 billion in gross proceeds from a private stock offering and expects to sign an agreement with the Department of Commerce in April that would provide access to an additional $1.6 billion—most of which would likely be structured as a loan. Combined with $360 million in cash and equivalents on hand and potential support from the French government, USAR could have nearly $3.5 billion available. That would bring the company closer to the roughly $4.1 billion estimated to build out its full mine-to-magnet platform. USAR: High Upside Potential With Substantial Risks USAR is targeting $2.6 billion in revenue in 2030 and $900 million in free cash flow. With a market capitalization near $3.3 billion today, successful execution could make the current valuation look inexpensive. But the plan carries meaningful risks. The Department of Commerce funding is not guaranteed; if the deal collapses, USAR would face a large financing shortfall. Actual project costs could exceed current estimates, and construction or mining setbacks could delay large-scale revenue generation. Still, efforts to diversify the REE supply chain are strategically important. USAR's Round Top deposit is notably rich in heavy REEs, which are required by many advanced technologies and typically command much higher prices than the light REEs in which MP specializes. Overall, USAR is a high-risk, high-reward investment that requires significant conviction from investors considering a stake. | 
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