Highlights
- USAR purchases Less Common Metals for $100M, expanding rare earth metals production capabilities in the UK.
- Acquisition fills critical midstream supply chain gap and supports US efforts to rebuild domestic rare earth manufacturing.
- Strategic move aims to compete with China's rare earth dominance by developing end-to-end rare earth metal processing.
USA Rare Earth, Inc. (Nasdaq: USAR) announced (opens in a new tab) a landmark acquisition on September 29, 2025: the purchase of the UK’s Less Common Metals (opens in a new tab) (LCM), the only established ex-China producer of rare earth metals and alloys at scale. The $100 million cash-plus-stock deal, paired with a $125 million equity raise, cements USAR’s ambition to become the first true mine-to-magnet player outside of China (GlobeNewswire, Sept. 29, 2025).
Outgoing CEO Joshua Ballard interviewed with Rare Earth Exchanges (opens in a new tab) (REEx), emphasizing the mid-market focus, mine to magnet.
LCM is a United Kingdom-based manufacturer of specialized rare earth metals and both cast and strip cast alloys. According to the USAR press entry, LCM holds a unique position as the only proven ex-China producer of both light and heavy rare earth permanent magnet metals and alloys at scale at its 67,000 square foot production facility in Cheshire, UK. It also benefits from an established supply of raw materials outside of China. Metals and alloys produced include Samarium, Samarium Cobalt, Neodymium, Praseodymium, Dysprosium, Terbium, Yttrium, Gadolinium, and other critical rare earth metals and metal alloys. LCM is one of the few companies capable of processing metal oxide feedstocks from both mined and recycled sources.
Why It Matters
LCM brings proven capability in Samarium, NdPr, Dysprosium, Terbium, and Samarium Cobalt alloys—all essential to defense, EVs, and industrial magnets. This fills a critical midstream gap in USAR’s supply chain and supports its Oklahoma magnet facility buildout. Importantly, LCM also processes recycled oxides, giving USAR sustainability and feedstock security advantages.
The deal positions USAR uniquely against MP Materials and Lynas Rare Earths, both of which face midstream bottlenecks. For U.S. policymakers, this marks progress toward rebuilding domestic supply chains hollowed out since the 1990s.
Critical Questions
Yet key investor questions remain unanswered:
- Can USAR integrate LCM’s 30+ years of expertise without execution slippage?
- Will UK/EU regulatory hurdles delay synergy capture?
- How reliant will USAR remain on third-party feedstock until Round Top (Texas) reaches commercial scale?
- Most importantly: can USAR compete on cost against China’s state-backed incumbents?
- Can USAR refining technology scale out?
Stock Performance & Fundamentals
CEO Joshua Ballard—departing alongside this deal—touts USAR as one of the best-performing de-SPACs, up 60% year-to-date versus flat Nasdaq. Fundamentally, the equity raise bolsters liquidity (~$300m raised in 2025), though capital intensity for mine, metal, and magnet buildout remains high. Technically, USAR stock trades above key moving averages with momentum intact; however, resistance near the $18–20 range could limit near-term upside absent execution milestones.
Objective Critique
REEx’s assessment: This deal is strategically correct. Midstream capability is the linchpin for U.S. independence. The lack of midstream scalability keeps many up at night in the West. Still, investors should weigh execution risk, dilution potential, and competitive cost pressures. If integration succeeds, USAR gains a unique Western moat. If not, the “historic” moment risks overpromising. USAR still must validate the model at scale in the mid-market.
Bottom Line
For retail investors, this acquisition is both visionary and high-risk—the kind of binary bet that defines the rare earth sector. Watch execution, cash burn, and customer offtake traction closely.
Source: GlobeNewswire, Sept. 29, 2025; CEO Joshua Ballard statement via LinkedIn.
©!-- /wp:paragraph -->
The points mentioned in your ‘Critical Questions’ section above were (in my opinion) spot on.
The main hurdle is the regulatory approval by UK/EU and what kind of roadblocks may need to be overcome. It may take President Trump’s administration to get to the original agreement between USARE & LCM. Any updates on this area will be greatly appreciated.
Thank-you.