New York, Jan 21, 2026, 12:39 PM ET — Regular session
- USA Rare Earth shares swung sharply, slipping about 2% after earlier climbing.
- Company announced that France will support a new rare earth metals and alloys plant through tax credits
- Investors are focused on funding terms, permits, and execution risks as the project shifts from planning to construction
Shares of USA Rare Earth, Inc. (USAR) slipped 1.6% to $18.90 in midday trading Wednesday, after climbing as much as 12% earlier in the session. Meanwhile, fellow rare earth player MP Materials dropped 6.6% amid a wider retreat in U.S.-listed rare earth stocks.
Volatility lingered in a niche market linked to industrial policy and supply concerns. Rare earths, essential for permanent magnets in electric vehicles, wind turbines, and certain defense systems, drew investor interest. The focus remains on projects aimed at cutting dependence on China.
Concerns over supply remain. According to a Reuters report on Tuesday, Chinese exports of rare earth magnets to Japan dropped 8% in December compared to November, highlighting how trade tensions continue to impact shipments. (Reuters)
USA Rare Earth announced Tuesday that it will build a 3,750 metric-ton-per-year metal and alloy facility in Lacq, France, via its subsidiary Less Common Metals (LCM) Europe SAS. The French government has greenlit direct credits under the C3IV program covering up to 45% of eligible equipment costs and as much as 130 million euros for real estate. The company also noted potential assistance for hiring and training efforts. “We are proud to establish Europe’s first metal-making platform,” CEO Barbara Humpton said. (GlobeNewswire)
C3IV is France’s “Green Industry Investment” tax credit, launched in 2024 to boost industrial spending on clean-tech supply chains. It targets critical raw materials vital for industries like wind turbines and batteries, the French tax authority says. (Gouv)
Tax credits can carry more weight than they might seem. For early-stage industrial projects, investors frequently see government backing as a signal that hurdles like financing, permitting, and customer negotiations could be easier to clear.
There are numerous risks. In its most recent quarterly filing, the company flagged “substantial doubt” over its ability to remain a going concern for the next 12 months, pointing to the urgent need for more capital to carry out its strategy. (SEC)
Wednesday’s reversal highlighted how fast sentiment can flip from “policy tailwind” to “execution risk,” particularly in project-driven stories that aren’t well understood.
Investors will be looking closely to see if the company can convert French backing into a concrete construction and financing schedule. A crucial milestone is Carester’s Caremag oxide plant near Lacq, slated to start operations in late 2026. This facility will be a key part of the larger setup the company is developing around Lacq. (Nasdaq)
