USA Rare Earth Acquisition Boosts Domestic EV Supply Chain

USA Rare Earth's acquisition of Less Common Metals could be an important step in securing a domestic US supply chain for rare earth metals, crucial components in the permanent magnets that power EVs.

The move addresses growing concerns among car manufacturers and governments about the West's reliance on China for these essential materials.

The deal has been described by USA Rare Earth (USAR) CEO Barbara Humpton as “the missing link in America’s rare earth supply chain”.

Less Common Metals (LCM) is the only commercial-scale producer of rare earth metals and alloys outside of China.

This acquisition accelerates USAR's strategy to create a fully integrated 'mine-to-magnet' pipeline within the United States.

A critical link for EV magnet production

The urgency to establish alternative rare earth supply chains is being fuelled by the exponential growth of the EV market.

Permanent magnets are a fundamental component in EV motors and many other systems within the vehicles.

Speaking on just her second day as CEO of USAR, Barbara explained the strategic importance of the acquisition.

“This deal secures the missing link in America’s rare earth supply chain – metal- and alloy-making and strip-casting – and significantly accelerates USAR’s mine-to-magnet strategy,” Barbara stated.

“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.”

Permanent magnets, as Barbara noted, “power the world”. Their application in the automotive sector is extensive.

“Everything from aerospace to defence, to automotive to the consumer electronics that we use [...] anything that moves is taking advantage of permanent magnets to create that motion,” she said.

To produce these magnets, manufacturers require strip casts, which serve as the feedstock. According to Barbara: “It turns out LCM is that scaled supplier outside of China.”

Geopolitical tensions and supply chain reliability

The global scramble for rare earth elements has been intensified by geopolitical friction.

Earlier this year, China announced it would be cutting off its supply of rare earths for magnets to the US and its allies, sending a shockwave through industries dependent on them, including EV manufacturing.

“We all got a wake-up call this year,” Barbara commented.

“There has been globalisation which has driven so much manufacturing overseas. 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 Western EV makers, the primary concern is not necessarily price but the stability and security of their supply chains.

The USAR strategy focuses on providing a dependable alternative to Chinese sources.

“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 explained.

By bringing LCM into its fold, USAR can now combine its upstream mining operations with LCM’s specialised midstream capabilities in metal-making and alloy-making.

US industrial strategy and domestic production

The acquisition aligns with a broader push by the US government to onshore critical supply chains.

The Trump Administration has acquired stakes in several key mining and technology companies as part of a strategy to reduce dependence on other global markets.

These investments include:

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

This government-level support creates a favourable environment for companies like USAR to build out domestic capabilities.

“We are in close communication with the Administration. We applaud what the Trump Administration has done in order to make investments in this area,” Barbara said.

In a statement on LinkedIn, USAR reinforced the significance of the move.

The company wrote, “This acquisition is a key step in delivering on our vision: building the nation’s first end-to-end mine-to-magnets supply chain, creating jobs, encouraging industrial revival, and strengthening the US.”