USA Rare Earth LLC has hired bankers to explore going public in a deal that could value the
strategic minerals company at more than $1 billion, according to a source familiar with the
matter and documents seen by Reuters.
The company, which is developing the Round Top rare earths deposit in Texas, is considering
an initial public offering (IPO) or going public via a special purpose acquisition company
(SPAC), though it does not plan to issue debt, according to the source and documents.
Any offering is expected to raise between $300 million to $500 million, which would be used in
part to finance the Texas mine and processing facility. The company hopes to have it operating
by 2023.
Investors are growing more interested in exposure to rare earths, 17 minerals used to build
weapons and electronics. China is the world’s largest producer and has threatened to stop
exporting these minerals to the United States.
Goldman Sachs Group Inc and BMO are serving as advisors to USA Rare Earths. Company
representatives did not immediately respond to a request for comment.
Goldman also is handling the company’s negotiations with potential customers.
Reviving domestic rare earths production has become a priority in Washington as relations with
China have grown more frayed, and with U.S. lawmakers leery of relying on a rival for critical
defense components.
U.S. President Joe Biden has repeatedly said he wants to boost manufacturing, a goal that likely
would require more domestically-produced minerals. He plans to issue an executive order this
month mandating a review of critical U.S. supply chains, sources separately told Reuters on
Tuesday.
USA Rare Earth rival MP Materials Corp, which controls California’s Mountain Pass mine,
went public last year in a SPAC deal worth nearly $1.5 billion. Its stock price has more than
doubled since its November debut.
