USA Rare Earth Invests $1.2 Billion in South Carolina Magnet Factory Backed by CHIPS Act Funding

USA Rare Earth will invest $1.2 billion to build a major rare-earth magnet and refined-metals factory in Blacksburg, South Carolina, creating 490 jobs and expanding U.S. domestic magnet production. The project is supported by up to $1.6 billion in CHIPS Act funding, making the U.S. government one of the company’s largest shareholders. 

Why This Investment Matters for U.S. Manufacturing

USA Rare Earth’s new South Carolina facility represents one of the largest U.S. investments in rare-earth magnet production, a sector overwhelmingly dominated by China. The plant will produce neodymium-iron-boron (NdFeB) permanent magnets essential for defense, aerospace, EVs, semiconductors, AI systems, and clean-energy technologies. The project strengthens America’s “mine-to-magnet” supply chain and reduces reliance on foreign suppliers. 

The facility will complement the company’s existing Stillwater, Oklahoma magnet plant, forming the centerpiece of a fully integrated value chain spanning mining, separation, metal production, and magnet manufacturing across the U.S., U.K., Europe, and Brazil. 

Key Details About the $1.2 Billion Magnet Factory

The Blacksburg plant will be located in Bailey Industrial Park and is expected to begin commissioning in 2028. It will produce 6,400 metric tons of NdFeB magnets and 5,000 metric tons of strip-cast metal and alloy annually. Combined with the Stillwater expansion, USA Rare Earth expects total U.S. capacity to reach 10,000 tpa of magnets and 10,000 tpa of heavy rare-earth alloys. 

The facility will perform electrolysis, metallothermic reduction, strip casting, jet milling, sintering, heat treatment, machining, and coating, enabling full-scale domestic production of advanced magnet materials. 

CHIPS Act Funding and Government Partnership

USA Rare Earth has secured agreements for up to $1.6 billion in CHIPS Act funding for the Blacksburg facility and related projects. In exchange, the U.S. government will receive 16.1 million shares, making it one of the company’s largest stakeholders. Company leadership calls this “the largest partnership of its kind in our industry,” enabling the only global platform spanning mining, processing, alloying, and magnet manufacturing. 

Economic Impact on South Carolina and the U.S. Industrial Base

The project will create 490 high-skill, high-wage jobs and reinforce South Carolina’s position as a leader in advanced manufacturing. State officials highlight the region’s strong workforce, infrastructure, and proximity to the I-85 manufacturing corridor as key advantages. 

For the U.S., the investment strengthens national security by ensuring a secure, traceable supply of rare-earth magnets critical components for defense systems, aerospace platforms, and next-generation technologies. 

Key Takeaways

• USA Rare Earth is investing $1.2B in a new South Carolina magnet factory.
• The project will create 490 advanced manufacturing jobs.
• The U.S. government is providing up to $1.6B in CHIPS Act funding and will become a major shareholder.
• The facility will produce 6,400 tpa of NdFeB magnets and 5,000 tpa of rare-earth alloys.
• The project strengthens America’s domestic rare-earth supply chain and reduces reliance on China.

FAQ

What will the new USA Rare Earth factory produce?

It will manufacture NdFeB permanent magnets and refined rare-earth metals used in defense, aerospace, EVs, semiconductors, AI, and clean-energy systems. 

How many jobs will the project create?

The Blacksburg facility will create approximately 490 high-skill jobs in South Carolina. 

How is the CHIPS Act involved?

USA Rare Earth will receive up to $1.6B in CHIPS Act funding, making the U.S. government one of its largest shareholders. 

Why is this project important for U.S. national security?

Rare-earth magnets are essential for defense systems, and the U.S. currently relies heavily on foreign suppliers. This project builds a secure domestic supply chain.