USA Rare Earth Inc. announced on April 30, 2025, that it has secured $75 million through a private investment in public equity (PIPE) from an unnamed institutional investor. The funding will support the continued buildout of its newly opened rare earth magnet manufacturing facility in Stillwater, Oklahoma, and will also provide working capital and operational funding.
Facility and Production Goals
The Stillwater facility, named the “Innovation Lab,” spans 310,000 square feet and officially opened in March 2025. It has already produced its first batch of sintered rare earth magnets and is designed to replicate the entire magnet production process within the United States. USA Rare Earth plans to begin commercial-scale operations in 2026, after delivering prototype batches to customers.
At full capacity, the facility is expected to produce approximately 5,000 tonnes of magnets per year. These magnets are essential to the defense industry, electric vehicle manufacturing, wind energy systems, and a variety of high-tech consumer electronics.
CEO Statement and Strategic Impact
CEO Joshua Ballard emphasized the strategic importance of the investment, stating that the $75 million commitment fully funds the capital expenditures required for the first phase of magnet production. He noted the deal arrives at a critical moment for strengthening domestic capabilities in rare earth magnet manufacturing—an industry dominated globally by foreign producers.
Vertical Integration and Resource Security
As part of its long-term strategy, USA Rare Earth also controls the Round Top deposit in West Texas, one of the largest sources of critical minerals in North America. The deposit contains valuable heavy rare earth elements such as dysprosium and terbium, as well as gallium, beryllium, and lithium. This allows the company to operate a vertically integrated supply chain, from raw materials to finished magnets, entirely within the United States.
Investment Terms and Market Response
The PIPE investment includes the issuance of approximately 8.55 million shares of common stock and associated warrants with a strike price of $7.00 per share. A special meeting of shareholders will be held to approve the issuance.
Despite the strategic nature of the deal, USA Rare Earth’s stock dropped nearly 20% following the announcement, a decline likely attributed to concerns about shareholder dilution and the challenges associated with scaling production in a competitive international market.