TLDR
- USA Rare Earth’s newly acquired subsidiary Less Common Metals signed a supply agreement with Solvay and Arnold Magnetic Technologies to provide ex-China rare-earth metals and alloys
- USAR stock jumped 16% on Thursday following the partnership announcement
- The deal strengthens an American-European supply chain for aerospace, defense, automotive, and energy industries
- USAR completed its $100 million acquisition of LCM on November 18, gaining access to high-grade neodymium and praseodymium alloys
- The company expects to commission its Stillwater magnet manufacturing facility in Oklahoma in Q1 2026
USA Rare Earth Inc. (USAR) shares climbed 16% on Thursday. The move came after the company announced a new supply agreement through its recently acquired subsidiary.
Less Common Metals signed a deal with Solvay and Arnold Magnetic Technologies. Arnold is a subsidiary of Compass Diversified Holdings (CODI), which saw its stock rise 3%.
Under the agreement, the U.K.-based LCM will supply Arnold with ex-China rare-earth metals and alloys. These materials are used for advanced permanent magnet production.
The partnership targets key industries including aerospace, defense, automotive, and energy. The goal is to build a more stable American-European supply chain.
CEO Barbara Humpton called the deal an example of rebuilding strength outside of China’s dominance. She emphasized the importance of secure sourcing between trusted partners.
Recent Acquisition Fuels Growth
USAR closed its acquisition of LCM on November 18. The deal involved $100 million in cash and 6.74 million shares of USAR common stock.
The transaction was first announced in September. It gives USAR access to critical materials for magnet production.
LCM brings high-grade neodymium and praseodymium alloys to the table. These NdPr alloys are essential components for making powerful magnets.
The company also gains strip cast materials through the acquisition. These are key inputs for the manufacturing process.
Oklahoma Facility On Track
USAR is moving forward with its Stillwater magnet manufacturing facility in Oklahoma. The plant is scheduled to begin operations in the first quarter of 2026.
The facility will become one of the first large-scale U.S. producers of Neodymium Iron Boron magnets. These magnets are crucial for various high-tech applications.
The new supply agreement with Arnold solves a major piece of the production puzzle. Having a reliable feedstock of raw materials removes a key obstacle.
The market reaction suggests investors are looking past recent earnings challenges. The company’s CFO previously noted that magnet demand is locked in through 2033.
Current demand outstrips available capacity. This creates a favorable environment for new producers entering the market.
The Arnold deal represents a concrete step toward full commercial production. It connects USAR’s upstream materials access with downstream manufacturing capabilities.
Compass Diversified Holdings, Arnold’s parent company, saw positive movement in its stock price on the news. The partnership appears beneficial for both parties involved.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
