Key Highlights

  • USA Rare Earth has begun shipping mixed rare earth carbonate under a 15-year, 100% take-or-pay offtake agreement.
  • The company said its first-stage flowsheet optimization was completed within budget and on schedule.
  • Pricing under the agreement is based on non-China prices, which the company said are 14 to 16 times higher for dysprosium oxide.
  • Payments under the offtake agreement began in November.

USA Rare Earth, Inc. (NASDAQ:USAR) has begun shipping mixed rare earth carbonate, marking the start of commercial-scale deliveries from its Serra Verde subsidiary. The Stillwater, Oklahoma-based company describes itself as the only scaled producer outside Asia of scarce heavy rare earths. The shipments move the company from development toward Revenue generation, and they come under a long-term agreement with a buyer backed by the U.S. government.

The Offtake Agreement

The shipments are being made to US SIIE, LLC, a special purpose vehicle funded by the U.S. government and described as the offtake partner. Payments under the agreement began in November, according to the company.

The company said the product meets all quality acceptance specifications required under the agreement. Pricing is based on non-China prices, and the company cited recent non-China prices for dysprosium oxide at 14 to 16 times the China price, and for terbium oxide at 6 to 9 times the China price.

Production Progress

The company said Stage 1 of its flowsheet optimization and expansion program was completed and commissioned within budget and on time. Commercial-scale production has restarted, and ramp-up volumes and product quality are being delivered as planned. Those milestones are the operational basis for the shipments, and they mark a transition from the construction phase to the delivery of contracted product.

Mixed rare earth carbonate contains several elements used in NdFeB magnets, which are used in electric motors, wind turbines and defense applications.

Outlook and Open Questions

The offtake agreement provides a contractual anchor, but the timing and Volume of future shipments will drive the company's financial profile.

Supply outside China has been limited, and buyers have sought long-term contracts to secure feedstock. The company's offtake agreement addresses that need by providing a defined buyer and a pricing structure linked to non-China prices.

Final Word

USA Rare Earth's commercial shipments represent a step from development into delivery under a multi-year contract. The company has completed a planned optimization stage and begun receiving payments, giving the Business a defined revenue pathway.