USA Rare Earth (USAR) has captured the market’s attention, After federal investments in rare-earth play MP Materials (NYSE: MP) and Lithium Americas (NYSE: LAC) lit a fire under those stocks, traders are keen to get ahead of the next deal. With its stock prices surging following the announcement of a key merger and confirmed discussions with the White House. Investors are taking notice after new CEO Barbara Humpton, formerly of Siemens USA, appeared on CNBC to discuss the company’s direction.
The significant stock movement on Thursday and Friday signals strong investor interest, especially as the U.S. government shows increasing support for domestic rare earth element producers like MP Materials and Lithium Americas. As Humpton noted, “This is a field where it will not be a zero sum game. It’s going to take a lot of players to build out this marketplace.”
A Strategic Merger to Secure the Supply Chain
A major catalyst for this momentum is USA Rare Earth’s recent acquisition of U.K.-based Less Common Metals (LCM) in a $227 million deal. Announced on September 29, the merger is a critical step in the company’s “mine-to-magnet” strategy, which aims to build a complete rare earth supply chain outside of China.
LCM is a significant player, described as the only proven producer of both light and heavy rare earth permanent magnet metals and alloys at scale outside of China. The company also has an established supply of raw materials from non-Chinese sources. This acquisition provides a secure source of materials for USA Rare Earth’s planned magnet production facility in Stillwater, Oklahoma, which is expected to be commissioned in early 2026.
Grant Smith, Chairman of LCM, also revealed that his company recently received a U.S. Department of Defense grant to expand its production of samarium metal. This material is crucial for creating samarium cobalt magnets, which are used in high-temperature applications for key defense systems like the F-35 fighter jet and Tomahawk missiles.
White House Talks and Potential Government Funding
Adding to the excitement, company executives confirmed they are in discussions with the U.S. government. During the merger call, CFO Robert Steele mentioned that USA Rare Earth is exploring opportunities for government support, which could include “a capital source through the combination of loans, grants, and potential other opportunities.”
These talks highlight the strategic importance of developing a domestic rare earth supply chain for both commercial and defense applications. While USA Rare Earth holds mining rights to a heavy rare-earth deposit in Texas, the immediate focus is on processing and magnet production, with the LCM deal providing the necessary feedstock.
Strong Market Performance
The market has responded decisively to these developments. On Friday, USAR stock jumped 16.8% to 26.54, following a 23.4% surge the previous day. This breakout pushed the stock well past its recent buy point of 19.68.
Investment firm Canaccord has taken note, raising its price target for USAR stock from 21 to 22 while maintaining a buy rating. The firm believes the strategic value of the LCM acquisition is currently underappreciated by the market. As USA Rare Earth continues to execute its mine-to-magnet strategy, it is positioning itself as a key player in the global race to secure critical rare earth materials.
The post USA Rare Earth Stock Soars on Merger News and White House Discussions appeared first on PRISM MarketView.
