USA Rare Earth Extracts Critical Dysprosium From Scrap
USA Rare Earth (NASDAQ:USAR) successfully extracted commercial-grade dysprosium and neodymium-praseodymium (NdPr) oxides from recycled magnet scrap at its Colorado facility on Tuesday (July 14).
Operating out of its Wheat Ridge demonstration plant, the company announced it had processed scrap from its own magnet manufacturing facility in Stillwater, Oklahoma into high-purity rare earth oxides.
USA Rare Earth will ship the newly produced oxides to Less Common Metals (LCM), its UK-based subsidiary, for qualification and conversion into rare earth metals and strip cast. LCM will subsequently supply the material back to USA Rare Earth’s permanent magnet manufacturing facilities in the US.
Dysprosium separation remains notoriously difficult at a commercial scale, leaving China with a virtual monopoly on the heavy rare earth element.
Manufacturers require dysprosium to help permanent magnets retain performance and coercivity at the extreme temperatures generated by aerospace components, defense systems, and electric vehicle motors.
The production milestone follows a massive capital injection from the federal government. Last month, USA Rare Earth signed definitive agreements with the US Department of Commerce to access up to US$1.6 billion under the CHIPS Act.
The package includes US$277 million in direct federal funding and US$1.3 billion in senior secured loan capacity. Combined with private capital, the company has secured approximately US$3.5 billion to execute its business plan.
“Today marks the moment we move from intent to execution alongside the United States Government,” CEO Barbara Humpton said regarding the definitive agreements.
Yet, the breakneck race to build an independent US rare earth sector has triggered fierce domestic infighting.
USA Rare Earth is currently embroiled in a lawsuit from MP Materials (NYSE:MP), America’s largest rare-earth miner. The plaintiff-company alleges USA Rare Earth executed a “raiding mission” to hire at least eight key employees and steal confidential trade secrets.
The dispute centers on grain boundary diffusion, a highly sensitive technique that applies heavy rare earths to magnets to increase heat resistance without sacrificing magnetic strength.
Scientists at MP Materials worked for years out of a small industrial space dubbed “The Garage” to develop the technique. MP Materials claims former engineer Kevin Elkins took its proprietary formula to USA Rare Earth and is seeking at least US$5 million in damages.
USA Rare Earth firmly denies the allegations, arguing the technology is readily ascertainable through independent development and reverse engineering.
The legal friction threatens to distract the industry exactly as Beijing flexes its market dominance. In late June, China slapped targeted export controls on both MP Materials and USA Rare Earth, directly prohibiting individuals and organizations from transferring Chinese-origin dual-use items to the firms.
Washington continues to push for rapid commercialization to counter Beijing. USA Rare Earth targets 2028 for commercial production at its Round Top heavy rare earth deposit in Texas, which will ultimately feed its planned 10,000-ton-per-year magnet operations.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
