USA Rare Earth broke ground on $1.2 billion Blacksburg magnet plant on Sept. 9, 2026

Construction starts in South Carolina

The 800,000-square-foot project, which broke ground on Sept. 9, 2026, is planned for a 124-acre site in Cherokee County and is expected to create about 490 high-skill manufacturing jobs, according to a Zacks analysis published by The Globe and Mail. Once operational, the plant is expected to produce 6,400 metric tons a year of sintered NdFeB magnets and 5,000 metric tons a year of strip-cast rare earth metal and alloy, with commissioning targeted for 2028.

Why the plant matters

China controls 70% of rare-earth extraction and 90% of processing, according to research from The Motley Fool. Western nations need to diversify rare-earth and magnet supply for technologies including defense systems, and USA Rare Earth aims to build a mine-to-magnet supply chain spanning mining, processing, separation, alloying and magnet manufacturing.

The U.S. government has committed $1.6 billion to help the company scale up, The Motley Fool reported. USA Rare Earth designates the U.S. government as its core customer, according to nai500, and providing procurement services could reduce supply chain complexity and the number of suppliers government agencies deal with.

Feedstock and existing operations

USA Rare Earth already operates a facility in Stillwater, Oklahoma, where it commissioned its first commercial production line this year, Zacks said. The Stillwater plant makes sintered NdFeB permanent magnets that combine neodymium and praseodymium with dysprosium, terbium, iron and boron, according to The Motley Fool. Zacks said the Blacksburg plant is designed to make the same type of magnet.

USA Rare Earth completed its $2.8 billion acquisition of Brazilian miner Serra Verde on Sept. 4, 2026, The Motley Fool reported. The deal gives it immediate access to upstream feedstock and makes it the only producer of scale for all four magnetic and heavy rare-earth elements outside Asia; without Serra Verde, the company would have to wait years for its Round Top project to come online.

Risks and valuation

Excluding Serra Verde, USA Rare Earth remains essentially a company that has not yet generated revenue, nai500 reported. The company has a market capitalization of about $4 billion and aims for annual EBITDA of about $1.8 billion by 2030. Its operational efficiency is still unproven.

Zacks said USA Rare Earth trades at a forward price-to-sales ratio of 8.07 times, more than five times the industry average of 1.43 times, and carries a Zacks Rank #4 (Sell). The 2026 earnings consensus estimate has declined over the past 60 days, and the stock carries a Value Score of F.

The supply agreement the company signed with the U.S. government provides a price floor guarantee and security, but the stock's success may still depend on whether it can obtain higher prices and achieve sufficient operational efficiency in mining and processing, nai500 reported.

What happens next

The plant is part of management's goal of 10,000 metric tons a year of domestic magnet capacity by 2029, The Motley Fool reported. USA Rare Earth will need to integrate Serra Verde, scale manufacturing and develop Round Top. Zacks said the Blacksburg plant and a planned Stillwater expansion are expected to provide that capacity.