The global race for rare earth elements is speeding up, and Oklahoma’s USA Rare Earth is in it

STILLWATER, Okla. –

USA Rare Earth CEO Barbara Humpton sat down one-on-one with News On 6’s Katie Eastman to talk about the company’s goal to ramp up production as geopolitical tensions rise with China, the world’s top miner of rare earth elements.

Hampton: USA Rare Earth is the global leader in rare earths. We are building a company that covers every link in the value chain from the mine all the way to the magnet.

Humpton: We focused on magnets here in Stillwater. Imagine this: metal comes in, and it goes through an entire process that produces a magnet that can be used in any number of applications.

Humpton: People may not know that magnets are in everything they use throughout the day. Think about getting in your car. The seat belt has a magnet in it. The mirror has a magnet in it. As they pick up their phone to check on their navigation, that has magnets in it.

Automotive is a big part. But aerospace and defense is significant. So is health care. By the way, if you’ve been in an MRI, you know that is magnetic.

Humpton: Yeah. There’s no two ways about it. This next couple of years will be very difficult across all the industries we’re serving, which is why we are sprinting to get this done.

Humpton: Yeah. First things first. We had recognized long ago that the important action for us to take was to seek non-China supplies for everything we would need in this value chain. When you look, walk through our facility, you’re going to see equipment that’s been sourced outside of China. You’ll see the use of reagents that are coming from sources outside of China, and wherever possible, domestic U.S.

So we were already on a path to make ourselves self-reliant, resilient. Now that this announcement has been made, I think it sends a very clear signal. China is serious about this. So are we.

Humpton: We have a plan right now that we have everything we need to execute. The critical thing right now is for us to execute at speed. And so we do a really rigorous risk management assessment for every potential risk that’s coming down the road at us. What are five different ways we could overcome it? And what I find is the team is very resilient, very active in finding ways under, over, around and through impediments.

Humpton: Yeah, geopolitics is a huge factor for business everywhere. And I think maybe nowhere more stark than in the heavy, rare earth space. The heavy rare earths and the critical metals and alloys and the magnets that are in the backbone of the economy. When we outsourced all of that to China decades ago, no one could foresee a future where China would use that as leverage.

We say fool me once, shame on you. Fool me twice, shame on me. We have to take action now.

Humpton: Yes. Within the last year, as this company came to market and we were aware that the U.S. government was working on a response to this challenge, we raised our hand and stepped forward and said, here’s what we’re building. If we can be helpful in this fight, we want to be. The U.S. government did deep due diligence to take a look at what we had, the direction we were headed, and what they said is we would like to help you go faster and build bigger.

And that’s what the investment of the U.S. government is about. Now, the interesting thing about the way they structured this, the American taxpayer doesn’t contribute a single dime until we have actually built what we’re promising to build. We’ll build a bit. When we reach a milestone, the government would say, oh, hey, we can help backfill some of the expense of that.

So the American taxpayer is assured that their money is only used when real things are accomplished.

Humpton: Where we are right now is we have done what’s called commissioning. We have shown that our first production line performs as specified, performs as required, and we have real production material that’s running through, and it is producing the magnets that are ready to be used in qualification with customers. That’s production. But when people ask me, okay, so but when does your first dollar of revenue coming through?

Not until we’ve proven those capabilities to those end customers and they actually place orders for actual deliveries, stay tuned for that. We’re getting close.

Humpton: This is an interesting thing. We’re not talking about specific customer names. And it’s interesting that we have customers who don’t want to be cut off from other suppliers. They don’t want it to be known that they’re working with this whippersnapper U.S. company. And that’s fine. We’re perfectly willing to keep that news confidential. But what we’re doing is working, if I were to characterize it, I would tell you, think about aerospace and defense, think about large agricultural, think about communications systems. We are truly preparing materials for the backbone of the economy.

Humpton: But maybe the coolest part of the story. It turns out that for decades, the world has known that there’s a deposit in Round Top Mountain in Sierra Blanca, Texas, that is rich in heavy rare earths. We have the mining rights, and we’re working rapidly on the mine plan so that we can bring that mine into use.

Once we get there, and we’re a couple of years away from that, we’ll have domestic heavy rare earths to complement domestic light rare earths coming from another company. We’ll have the processing right here in the U.S.; we’ll have the metal making and the magnet making the full value chain here available to U.S. businesses.

Humpton: It can be. And this is the brilliant part about having both light and heavy rare earths right here in the continental United States. We will have all of those aspects. Maybe a bigger question is, what about the rest of the world? We’re committed to the idea of “glocal,” the idea that we’re being a global innovator, but we’re working with regions all around the world.

Humpton: This has been absolutely critically important to our plan. And as we build our accelerated mine plan, what we’ve done is we’ve partnered with experts in environmental and safety and health to make sure that when we implement and design right from the start is going to be sustainable.

We’ve been working with experts in environmental health safety, you know, that there are regulatory agencies who keep a sharp eye when things that we would build in the United States; we’re compliant with all of that.

And by designing things in from the get-go, turns out you don’t have to be an environmental hazard. There are techniques and technologies that help us do this in a way that is going to be healthy and safe for everyone.

Humpton: Stillwater ought to be proud that they are home to this magnet manufacturing plant. This is where we’re going to create material that will assure the resilience of the American economy. But closer to home, they should be excited about the jobs that are available now. We have hundreds of folks here who are building their careers. Maybe they’re starting as machinists, maybe they’re starting as technicians, maybe they’re doing maintenance work.

Maybe they’re stocking the cafeteria. Right. It doesn’t matter. There are jobs to be done that are going to help the economy overall and help with global security.