US Strikes Back at China's Rare Earth Monopoly With Oklahoma Magnet Plant Launch

USA Rare Earth Inc., listed on Nasdaq as USAR, announced on March 26, 2026 the successful commissioning of Phase 1a of its commercial magnet production line at the Stillwater facility in Oklahoma. The milestone enables the company to begin fulfilling customer orders for sintered neodymium-iron-boron permanent magnets during the second quarter of 2026, marking a pivotal step in the US effort to rebuild domestic rare earth magnet manufacturing capacity.

The 310,000-square-foot Stillwater site, known as the Innovation Lab, first opened in March 2025 and had already produced an initial batch of sintered magnets earlier that year. Phase 1a is expected to ramp to a run rate capacity of 600 metric tons per year by the end of the fourth quarter of 2026. Combined with the upcoming Phase 1b line, total active capacity at Stillwater should reach 1,200 metric tons annually in the first quarter of 2027, with long-term plans targeting nearly 5,000 metric tons per year across four production lines.

Commissioning is a critical validation step for any manufacturing line, confirming that the multi-step process can produce commercial-grade permanent magnets at scale. At Stillwater, production starts with rare earth and metallic elements being transformed into a fine powder, which is then jet-milled to particles of 3 to 5 microns in an oxygen-restricted environment. The powder is wet-pressed into large blocks, then machined, coated, and magnetized to create high-grade permanent magnets. These components are essential to aerospace and defense systems, semiconductors, energy infrastructure, data centers, and numerous industrial applications. More than 100 employees currently work at the facility.

The plant is part of a broader strategy to establish a fully integrated mine-to-magnet supply chain within the United States. USA Rare Earth controls the Round Top deposit in West Texas, which contains heavy rare earths including dysprosium, terbium, and gallium. The mine is targeted for production start in late 2028. In January 2026, USA Rare Earth signed a non-binding agreement for $1.6 billion in funding from the Department of Commerce under the CHIPS and Science Act program, structured as $277 million in direct funding in exchange for a minority equity stake, plus a $1.3 billion senior secured loan. The company also acquired UK-based Less Common Metals to strengthen its metal-making and alloy capabilities.

This development arrives against a backdrop of mounting US concern over China's near-total control of the rare earth supply chain. China produces roughly 70 percent of global rare earth mining output and more than 90 percent of refining and magnet production. In April 2025, Beijing imposed export controls on several rare earth elements in response to US tariffs, followed by additional restrictions requiring overseas shippers of products containing even small amounts of certain rare earths to hold export licenses. The measures have triggered a wave of investment and federal support for domestic alternatives across the sector.

Other US initiatives running in parallel include MP Materials, which received a $400 million Pentagon equity investment in July 2025 alongside $1 billion in funding from JPMorgan and Goldman Sachs for a new magnet plant in Texas. Noveon Magnetics began commercial sales of rare earth magnets from its Texas facility in 2023 and has signed supply agreements with General Motors and ABB. Aclara Resources plans a $277 million heavy rare earth separation plant in Louisiana with completion targeted by end of 2027. Niron Magnetics in Minnesota is developing rare earth-free iron nitride permanent magnets and has partnered with Moog for defense applications.

Despite these efforts, industry analysts estimate that significantly reducing Western reliance on China will take at least five years of concerted effort, with full supply chain independence potentially requiring a decade or more. The Stillwater plant represents a meaningful but partial step in addressing a strategic vulnerability that spans the electric vehicle, defense, semiconductor, wind energy, robotics, and consumer electronics sectors.