USA Rare Earth and Solvay sign rare earth supply deal to secure Samarium metal for Permag production

USA Rare Earth, Inc., through its newly acquired subsidiary Less Common Metals, expanded its foothold in the global magnet materials market by entering a strategic supply agreement with Solvay to deliver Samarium-based rare earth metals for Permag’s magnet assembly operations. The company described the collaboration as a multiyear alignment designed to stabilize Samarium availability outside China while reinforcing the “mine-to-magnet” strategy USA Rare Earth has been promoting across its U.S. and European footprint. The deal arrives at a pivotal moment for the rare earth sector, where geopolitical pressure, industrial reshoring policies, and accelerating demand for high-temperature magnet materials are shaping investment across the entire supply chain.

The agreement establishes a coordinated flow from Solvay’s separation technologies to Less Common Metals’ metallization capabilities and ultimately to Permag’s magnet manufacturing lines. USA Rare Earth indicated that the term of the agreement spans roughly three to five years and enables Permag to lock in a predictable supply of Samarium oxide feedstock converted into metal and alloy products. Industry observers viewed this alignment as a critical step in reducing exposure to China’s long-standing dominance in rare earth processing, an issue repeatedly raised by governments and manufacturers as energy transition and defense-related demand continues to rise.

The announcement follows USA Rare Earth’s recent completion of its purchase of Less Common Metals, which closed on November 18, 2025, positioning the company as an integrated materials supplier with both European and U.S. operations. Less Common Metals will also provide alloy feedstock for USA Rare Earth’s Stillwater, Oklahoma magnet facility expected to begin commissioning in the first quarter of 2026. The company framed the vertically connected structure as a differentiator at a time when policymakers are prioritizing domestic manufacturing capacity and downstream resilience, particularly for Samarium-Cobalt magnets used in aerospace, defense systems, and high-temperature industrial environments.

Why the USA Rare Earth–Solvay collaboration is being viewed as a strategic shift in rare earth metal security and supply-chain resilience

Market analysts noted that the rare earth segment continues to face concentrated supply dynamics that incentivize long-term agreements of this kind. Solvay remains one of the few non-Chinese groups capable of industrial-scale separation of mixed rare earth oxides, a capability that has been historically challenging to establish due to environmental, technical, and economic hurdles. By adding Solvay’s separation output to Less Common Metals’ metallization stream, the companies are effectively building an independent Samarium pathway that parallels ongoing Western efforts to diversify risk.

Sources familiar with the negotiations said Solvay expects increased U.S. and allied government support for non-Chinese rare earth initiatives and that the company considers magnet materials a priority focus. Solvay’s rare earth programs extend across both the U.S. and Europe, and reports in mid-November suggested the company has been evaluating new processing capacity to meet rising demand for Samarium, Neodymium, Dysprosium, and other strategic elements.

For Permag, the deal offers predictable access to Samarium metal at a time when OEMs and Tier 1 suppliers are reevaluating procurement strategies. Permag’s customer portfolio spans European and global segments, and the company depends on high-temperature magnets for critical assemblies where performance stability is essential. Supply predictability remains one of the most influential factors that manufacturers weigh when assessing production planning or facility expansions, especially as lead times for rare earth metals can fluctuate based on export policy changes, refinery disruptions, or shifts in global spot markets.

The structure of the agreement allows USA Rare Earth to position itself as a more complete supplier capable of spanning mining, separation partnerships, metallization, alloy production, and magnet manufacturing. With the Stillwater facility preparing for commissioning, the company aims to establish a stable feedstock pipeline that reduces reliance on imported intermediates. People close to industrial procurement teams have emphasized that vertical integration plays a growing role in contract negotiations, enabling companies to signal reliability to defense agencies, aerospace primes, and OEMs navigating increasingly scrutinized supply networks.

How investor sentiment and market performance around USA Rare Earth reflect expectations for vertically integrated magnet production in North America

USA Rare Earth shares (Nasdaq: USAR) recently traded around 12.44 USD with intraday volatility driven partly by the announcement and partly by broader market factors affecting critical-minerals equities. The stock experienced modest pressure on the day of the release, though trading desks familiar with the sector suggested that early volatility often accompanies companies in ramp-up stages, particularly before revenue from new facilities begins flowing. Market participants pointed out that the deal does not immediately translate to revenue recognition but strengthens the company’s forward commercial prospects.

Sentiment across the rare earth space has been influenced by higher-than-usual geopolitical uncertainty, mixed global manufacturing data, and ongoing efforts by Western governments to fast-track non-Chinese supply chains. Analysts who track industrial materials equities noted that investors continue to differentiate companies based on execution capability rather than long-term ambition alone. USA Rare Earth’s positioning improved following the LCM acquisition, and the new agreement with Solvay provides an additional indicator that supply-chain partners view the integrated model as credible.

Some institutional investors described the agreement as a de-risking event because it demonstrates that third-party manufacturers are willing to rely on USA Rare Earth’s subsidiary for critical materials. Others remain focused on delivery milestones at the Stillwater facility, including equipment installation, test-run performance, and initial shipment timelines. Given that magnet facilities can require specialized metallurgical controls, commissioning success will remain a key factor in determining whether the company can shift from development-stage valuations toward production-stage multiples. Broader sector sentiment has been improving as well, with several global OEMs signaling increased demand for Samarium-Cobalt magnets for extreme-temperature applications where neodymium-based magnets are less suitable.

Why the success of this long-term Samarium supply agreement will depend on operational execution and downstream demand dynamics across multiple industries

Industry specialists highlighted that while the agreement strengthens Samarium availability for Permag, several dependencies remain that could shape operational outcomes. Solvay must maintain consistent oxide production and deliverables across its separation facilities, an effort that involves both feedstock availability and processing throughput. Less Common Metals must successfully manage metallization capacity increases while synchronizing its output with the Stillwater plant’s alloy requirements. In addition, USA Rare Earth must continue building the Stillwater line to full operational readiness while meeting regulatory, workforce, and supply-chain obligations.

Downstream demand will remain a decisive force, particularly in aerospace and defense procurement cycles, renewable energy programs, and industrial automation markets where magnet performance is tightly linked to system reliability. Samarium-Cobalt magnets occupy an essential niche in high-temperature conditions where performance degradation is unacceptable. With electric propulsion, advanced avionics, radar systems, satellites, and industrial robotics showing sustained growth, Samarium demand is expected to maintain an upward trajectory, though macro conditions may influence short-term purchasing cycles.

Some analysts have suggested that Western rare earth companies could benefit from a period in which governments accelerate financial and regulatory support for securing critical minerals. Should this trend continue, companies like USA Rare Earth may receive additional incentives for domestic manufacturing, which could improve margin visibility and capital access over the next several years. Nevertheless, competition from recyclers, new separation technologies, and emerging global producers remains part of the long-term landscape.

What industry participants will monitor next as USA Rare Earth, Solvay, and Permag begin implementing the multiyear Samarium supply program

Over the next several quarters, attention will center on the execution timeline for all three entities connected to the agreement. Updates from Solvay regarding separation output and oxide delivery schedules will be particularly important to manufacturers monitoring raw-material availability. Less Common Metals will be evaluated on its metallization efficiency, product purity, and ability to transition from pilot quantities to scaled commercial volumes. Industry watchers expect USA Rare Earth to provide periodic commissioning updates for the Stillwater magnet plant, especially as customers typically rely on confirmation of equipment readiness before entering multi-year purchasing commitments.

Permag is likely to monitor cost stability, production yields, and long-term competitiveness as Samarium supply becomes more predictable. Stakeholders in Europe’s defense, aerospace, and specialty industrial sectors may also watch for further announcements tied to Permag’s production scaling. If the arrangement operates as intended, it could signal that Western rare earth supply chains are beginning to mature into more stable and diversified networks capable of supporting next-generation technologies.

Overall, the agreement between USA Rare Earth’s subsidiary Less Common Metals and Solvay represents a meaningful attempt to reshape Samarium supply for Western magnet manufacturers. It brings together upstream and midstream capabilities that have historically been fragmented across continents and aligns them with downstream industrial needs at a moment when supply-chain resilience has become a global priority. The next phase of execution will determine how much competitive advantage this collaboration ultimately delivers to USA Rare Earth, and whether it can serve as a model for additional rare earth alignments expected to emerge across the coming year.