U.S. Rare Earths Kicks Off Domestic Magnet Manufacturing

USA Rare Earth begins full-scale magnet production in Oklahoma, aiming to build a domestic supply chain for defense and EVs with a $1.6B government funding package.

USA Rare Earth has initiated full-scale magnet manufacturing operations at its facility in Stillwater, Oklahoma. This launch marks the commencement of the first large-scale U.S. production of neodymium-iron-boron permanent magnets, critical components for defense and electric vehicle industries. Initial customer shipments are scheduled to begin within the current second quarter of 2026.

Building a Domestic Supply Chain

The primary objective of this expansion is to fortify the domestic supply chain for critical minerals, a market currently dominated by China. The magnets engineered in Oklahoma are designed for high-temperature applications across several sectors, including aerospace, data centers, and healthcare. To accelerate its market reach, USA Rare Earth has entered into a strategic distribution partnership with Arnold Magnetic Technologies, allowing both firms to enhance their respective product portfolios.

Onsite, more than 100 employees manage the complete production process, from powder manufacturing to final magnetization. The company plans a rapid ramp-up of the Stillwater plant. The initial phase targets an annual production capacity of 600 tons by the conclusion of the fourth quarter in 2026. A subsequent expansion phase, slated for completion in the first quarter of 2027, is expected to double that output to 1,200 tons per year.

Financial Backing for Strategic Growth

The company’s fourth-quarter 2025 results, featuring $1.64 million in revenue, signaled the start of its commercial phase. While it reported an adjusted loss of $0.19 per share, its long-term financing appears robust. USA Rare Earth is currently finalizing an agreement with the U.S. Department of Commerce for a funding package worth up to $1.6 billion. This package comprises $277 million in direct federal funds and a $1.3 billion secured loan under the CHIPS Act.

Scaling to the targeted 1,200-ton capacity by early 2027 is viewed as essential for offsetting high operational costs with increased revenue. The final confirmation of the billion-dollar government funding is considered the financial cornerstone for building out this segment of the U.S. critical minerals value chain.