The United States is decisively leading a true global race to secure rare earths, strategic materials essential for the energy transition, defense, and consumer electronics.
At the center of this acceleration, writes the Financial Times, which dedicates an extensive report to the topic, is USA Rare Earth, an American company that in less than a year has closed four significant deals and is preparing to invest over 3 billion dollars to build an integrated “mine-to-magnet” supply chain.
Washington, with Trump’s return to the White House, has multiplied efforts to reduce dependence on Beijing by providing massive funding, price guarantees, and direct support.
The result is a hot market, with high valuations, new investors attracted to the sector, and a clear awareness: only a few major Western players, starting with the Americans, will be able to prevail in this decisive geopolitical game.
Breaking the Chinese Chain
Rare earths today represent one of the most critical points in the global supply chain. These elements are essential for producing permanent magnets used in electric vehicles, wind turbines, fighter jets, and smartphones.
For years, the West, and particularly the United States, has been heavily dependent on China, which controls almost the entire supply chain. This strategic vulnerability has pushed Washington to intervene with increasing force, supporting the development of an autonomous alternative supply chain.
Since Trump’s return to the presidency, the American government has announced $18.6 billion in committed and potential funds for critical minerals, with the vast majority allocated specifically to rare earths.
Minimum price guarantees, multi-year purchase agreements, and direct funding are creating a protected segment of the market, aiming to shield Western producers from dumping practices that have hindered investments in past years.
USA Rare Earth: from revenue-less startup to key player
Until recently, USA Rare Earth was a loss-making company without significant revenues. Today it has become one of the most dynamic and ambitious names in the sector.
Led by CEO Barbara Humpton, the company has completed four major deals in less than twelve months, raising about $2 billion from private investors.
Among the most significant deals are the purchase of Less Common Metals (LCM) in the UK for $217 million, integration with Texas Mineral Resources Corporation for the development of a Texas mine, acquisition of Serra Verde in Brazil for $2.8 billion, and a 12.5% stake in the French company Carester.
At the same time, USA Rare Earth has secured $1.6 billion in conditional government funding to build a magnet factory in Oklahoma.
Building an integrated supply chain
The West still lacks a fully integrated model like the dominant one in China.
The process is complex: from raw ore to oxides, then metal alloys, and finally magnets. For years, the lack of sufficient capital prevented simultaneous development of mines, separation plants, and magnet factories.
Today the picture is rapidly changing. Billion-dollar investments, once unthinkable, have become the norm. With the acquisition of LCM, USA Rare Earth has gained its first revenues and prestigious clients, including the German magnet manufacturer Vacuumschmelze, while maintaining a protective barrier to safeguard the intellectual property of other clients.
Energy Fuels, another American company, is also exploring acquisitions both upstream and downstream in the chain, confirming widespread interest in vertical integration.
A hot market
Analysts describe a sector with rapidly rising valuations that provide companies with ammunition for new deals, even without large cash outlays.
Valuations are based not only on current profitability but especially on strategic value in the geopolitical context.
According to Oskar Lewnowski of Orion Resource Partners, those who move decisively first will secure the largest share of the market. Once the Western supply chain reaches sufficient capacity to meet growing demand, space for other players will drastically shrink.
Rebecca Campbell of White & Case speaks of two successive phases: first a series of vertical integrations, then a wave of consolidations once demand is saturated.
The Serra Verde case
The acquisition of Serra Verde exemplifies the new era.
The Brazilian mine, one of the few capable of producing heavy rare earths outside China, has signed an agreement with the US government: a significant share of the initial production will be purchased at a guaranteed minimum price for fifteen years through a special vehicle funded by public and private funds.
Thras Moraitis, CEO of Serra Verde, emphasized how the deal has significantly reduced risks and allowed the company to join a larger group, leveraging the advantage of being first.
For USA Rare Earth, the agreement accelerates the path to profitability and helps meet the necessary conditions to fully access government funding.
Few big winners
The landscape remains competitive and selective. Many projects led by smaller companies vary in quality, while final demand, although growing, is not unlimited.
Concerns about a possible Chinese oversupply have not entirely disappeared, but strong US government support is changing the rules of the game.
As David Abraham notes, USA Rare Earth aims to become indispensable by linking different segments of the supply chain and reducing risks for the West’s future.
Experts agree on one point: those who scale first, with solid balance sheets and effective vertical integration, will have a decisive advantage.
On the chessboard, few important pieces remain. Sooner or later, they will be distributed among three or four major contenders capable of truly competing.
