How USAR’s Buyout of Rare Earth Firm Boosts US Manufacturing

The acquisition of Less Common Metals (LCM) by USA Rare Earth (USAR) could prove a key development for manufacturers reliant on a stable supply of rare earth metals and alloys.

The move aims to reduce the United States’ dependence on China for these materials which are vital in the production of high-performance permanent magnets used across numerous industrial sectors.

The deal has been described by USAR Chief Executive Officer Barbara Humpton as “the missing link in America’s rare earth supply chain”.

The acquisition of LCM, the only scaled metal and alloy producer outside of China, accelerates USAR’s mine-to-magnet strategy. This comes at a time of increasing global pressure to secure reliable rare earth supply chains, a need amplified by the growth of AI and the volume of products requiring permanent magnets. For manufacturers, a volatile supply chain for these components can lead to production delays and unpredictable costs.

Securing the magnet supply chain

A vertically integrated supply chain, from mining the raw material to producing the final magnet, offers a potential buffer against geopolitical supply shocks. Speaking on CNBC Overtime, Barbara explained the significance of the acquisition. “This deal secures the missing link in America’s rare earth supply chain – metal- and alloy-making and strip casting – and greatly accelerates USAR’s mine-to-magnet strategy”, she said.

Barbara added: “There is a global imperative now to build a mine-to-magnet supply chain for critical rare earth and the board of USA Rare Earth has this vision and it has been making decisive moves”. According to Barbara, this strategy is set to create a new domestic source for essential materials. “This is truly going to ensure that we have the first domestic supply chain outside of China for heavy rare earth metals, alloys, going all the way to permanent magnets”, she stated.

The role of strip casting in manufacturing

Permanent magnets are fundamental components in a vast range of manufactured goods. According to Barbara, they “power the world”. She explained that these magnets are indispensable in sectors from aerospace and defence to automotive and consumer electronics. “Anything that moves is taking advantage of permanent magnets to drive that motion”, Barbara said.

The feedstock for these magnets is created through a process that produces strip casts, a capability that LCM provides at scale. “It turns out LCM is that scaled supplier outside of China and particularly with access to additional feed stocks for their own work”, Barbara noted. This positions the combined entity to serve a wider market. “LCM has spent 30 years building this critical linchpin capability – the metal making, alloy making, casting and strip casting to provide that feedstock. Bringing our two companies together means that we can provide that capability, but also we can serve the broader market together”, she explained.

Responding to global supply pressures

Geopolitical events have highlighted the vulnerabilities in global supply chains for manufacturers. China’s decision to restrict its supply of rare earths to the US and its allies has created urgency for developing alternative sources. “We all got a wake-up call this year. There has been globalisation which has driven so much manufacturing overseas”, Barbara said. “And when China decided that they would not be providing rare earth for the magnets to the US and our trading partners, that sent a shockwave through the system.”

For manufacturers, the primary concern is not necessarily price competition but supply assurance. “But we don’t need to undercut Beijing on price: what we need to do is deliver a secure and reliable supply of the very magnets that are needed to move the world”, Barbara stated. The US government has also taken steps to strengthen domestic supply chains by acquiring shares in key mining and technology companies including:

• Intel – 10%
• MP Materials – 15%
• Lithium Americas – 5%
• Thacker Pass Mine – an additional 5%.

These investments are part of a broader strategy to foster industrial independence. “Now is the time to invest in this market segment and build the capability”, Barbara said. “We are in close communication with the Administration. We applaud what the Trump Administration has done to make investments in this area”. The acquisition of LCM is presented as a foundational step in rebuilding the US industrial base, aiming to provide manufacturers with a more secure and resilient supply chain for critical components.