USA Rare Earth Wins Up to $19.3M DOE Backing for Colorado Facility

USA Rare Earth secured up to $19.3 million from the DOE to build a rare earth oxide demonstration facility in Colorado. The Silicon Review reports on the domestic supply chain push and the Round Top project.

USA Rare Earth has been awarded up to $19.3 million by the US Department of Energy to support the design and construction of a rare earth oxide demonstration facility at its Colorado campus. The funding will be used to produce sintered rare earth permanent magnets for advanced automotive and clean energy applications.

The rare earth minerals project is part of a broader federal push to secure domestic supply chains for critical materials. The company's Round Top project in West Texas, a heavy rare earth deposit, is scheduled to start production in late 2027.

The demonstration facility at USA Rare Earth's Wheat Ridge, Colorado campus will combine rare earth oxide feedstocks from various global sources to produce sintered magnets. This capability will allow the company to provide a steady supply of magnets for advanced technologies while it continues to develop its Round Top mine.

The rare earth elements produced at the facility are essential for electric vehicles, wind turbines, defense systems, and medical devices. Permanent magnets made from neodymium, praseodymium, dysprosium, and terbium cannot be easily substituted, and China currently controls 92 percent of global refining capacity.

The DOE funding builds on a previous 2.5 million grant to USA Rare Earth in 2024 for a magnet recycling feasibility study. The company is also matching the federal contribution with its own investment, bringing the total project value to over 38 million.

The Colorado facility is expected to create 50 direct jobs and support an additional 200 indirect jobs in the region. Construction is slated to begin in the third quarter of 2026, with initial magnet production targeted for mid-2027.

The project aligns with the Biden administration's Defense Production Act Title III investments, which have allocated over $200 million to establish a domestic rare earth magnet supply chain since 2022.

The Silicon Review's analysis indicates that USA Rare Earth's DOE award represents a small but critical piece of the larger puzzle to break China's rare earth monopoly. The demonstration facility will not replace Chinese supply but will prove that domestic production is technically and economically viable.

Q: How much funding did USA Rare Earth receive from the Department of Energy?
A: USA Rare Earth was awarded up to $19.3 million from the DOE to support design and construction of a rare earth oxide demonstration facility in Colorado.

Q: Where is USA Rare Earth's Round Top project located?
A: The Round Top project is located in West Texas and is a heavy rare earth deposit scheduled to start production in late 2027.

Q: What will the Colorado demonstration facility produce?
A: The facility will produce sintered rare earth permanent magnets for advanced automotive and clean energy applications, using oxide feedstocks from various global sources.

Q: What rare earth minerals are essential for permanent magnets?
A: Permanent magnets require neodymium, praseodymium, dysprosium, and terbium. China currently controls 92 percent of global refining capacity for these critical minerals.

Q: How many jobs will the Colorado facility create?
A: The facility is expected to create 50 direct jobs and support an additional 200 indirect jobs in the region.

Q: When will initial magnet production begin at the Colorado facility?
A: Construction is slated to begin in the third quarter of 2026, with initial magnet production targeted for mid-2027.