---
title: Construction Begins on a $1.2 Billion US Rare-Earth Magnet Plant Still Years From Rivaling China
description: USA Rare Earth broke ground on a $1.2 billion magnet plant in South Carolina, a step toward US rare-earth independence still years from rivaling China.
author: Darie Nani (Editor-in-Chief)
date: 2026-09-12T09:50:11.703Z
updated: 2026-09-12T09:50:11.711Z
canonical: https://www.sovereignmagazine.com/article/us-rare-earth-magnet-plant-south-carolina-china
image: https://cdn.nanimediahouse.com/usa-rare-earth-blacksburg-plant-287491.jpg
categories: Business
content_type: Analysis
region: United States
publication: Sovereign Magazine
schema_type: Article
---

USA Rare Earth broke ground on September 9 on a rare-earth magnet and metal factory in Blacksburg, South Carolina, a $1.2 billion plant the company says will produce the permanent magnets inside electric-vehicle motors, wind turbines and guided weapons. Almost all of those magnets come from China. The groundbreaking is the first physical step in a federal effort to change that, though one plant shifts the balance only so far.

## Inside the Blacksburg Plant

The site sits on about 124 acres at the Bailey Industrial Park, with roughly 800,000 square feet of planned floor space, according to USA Rare Earth. The company says the plant will produce 6,400 metric tons a year of sintered NdFeB magnets, the neodymium-iron-boron type used in high-torque motors, plus about 5,000 metric tons a year of strip-cast rare-earth metal and alloy. It puts the workforce at about 490 manufacturing jobs and targets commissioning in 2028.

USA Rare Earth already runs a smaller magnet plant in Stillwater, Oklahoma, and trades on Nasdaq as USAR after listing through a SPAC merger in March 2025. The company received $19.3 million from the US Department of Energy's Critical Materials Innovation program toward the domestic supply push. It is still early-stage and pre-revenue at commercial scale, with trailing revenue around $13 million.

## The Output Gap With China Is Wide

China produces roughly 240,000 metric tons of permanent magnets a year and controls an estimated 94% of global sintered NdFeB output. In 2025 Beijing [imposed export controls](https://www.csis.org/analysis/rare-earth-export-restrictions-one-year-later) on rare-earth materials, a move that sharpened Washington's interest in domestic capacity.

Set against that, the Blacksburg plant is one piece of a small base. By 2028, USA Rare Earth's planned 6,400 metric tons plus MP Materials' expanded US capacity of about 10,000 metric tons would total roughly 16,400 metric tons a year, about 7% of China's current output, according to figures compiled by Rare Earth Exchanges. US magnet demand is growing about 17% a year and is projected at 20,000 to 25,000 metric tons by 2030, which means even both plants running would not cover domestic need.

## Federal Subsidies Fill the Cost Gap

US producers face a cost disadvantage the market alone does not close. Chinese producers operate at roughly half the cost of American ones, and Washington has stepped in to hold the floor. The Defense Department agreed a [price floor of about $110 a kilogram](https://www.resources.org/common-resources/can-price-floors-fix-americas-rare-earth-problem/), against roughly $60 a kilogram on the China-set market, and signed a 10-year purchase agreement with MP Materials, according to Resources for the Future. That structure is what makes new US magnet output bankable at present prices.

## The Feedstock Still Runs Through China

A magnet plant needs refined rare-earth material to feed it, and that is the part the US has not yet solved. Both USA Rare Earth and MP Materials still depend on Chinese-licensed feedstock exports or on alternatives that remain untested at scale. USA Rare Earth points to its Round Top deposit in West Texas as a future domestic source, with production targeted around 2028, though the deposit is not expected to reach full output until about 2030. Analysts put meaningful US independence in the mid-2030s at the earliest, which places the Blacksburg groundbreaking near the start of a shift measured in years rather than at the moment the plant opens.

More on the company is at [usare.com](https://usare.com).

## FAQ

**Q: Does the US produce its own rare-earth magnets?**
Only in small amounts today. Most sintered NdFeB magnets used in the US are imported, and domestic output is a fraction of demand. New capacity coming online over the rest of the decade is meant to raise that share.

**Q: What are NdFeB (neodymium) magnets used for?**
Neodymium-iron-boron magnets are the strongest widely produced permanent magnets, which makes them standard in electric-vehicle drive motors, wind-turbine generators, hard drives, industrial robots, and defense hardware such as guided missiles and radar systems.

**Q: Why does the US depend on China for rare earths?**
China dominates not just mining but the refining and magnet-making steps, and it produces at roughly half the cost of US operations. That processing and manufacturing chokepoint, rather than raw ore alone, is why American supply chains still route through China.