Mining and manufacturing company USA Rare Earth and Arnold Magnetic Technologies, which produces high-performance magnets and precision components, announced a mutual sales and distribution agreement March 23. Under the non-exclusive partnership, USA Rare Earth will offer Arnold’s finished permanent magnets produced from samarium-cobalt (SmCO) and neodymium-iron-boron (NdFeB). Arnold will offer USA Rare Earth’s processed and refined NdFeB feedstock and finished magnets.

Rare earth permanent magnets are essential components of semiconductors and the technologies required to manufacture them. These materials also are needed for radar systems, missile systems, fighter jet guidance systems and other critical applications.

However, supply chains for these materials are highly concentrated outside of the United States, primarily in China. The U.S. government has identified this as a national security concern, prompting the Trump administration to launch a $12 billion critical mineral stockpile to help reduce U.S. dependence on other countries in this area.

The agreement between USA Rare Earth and Arnold Magnetic Technologies “strengthens a U.S.-aligned supply chain for the aerospace, defense, semiconductor, and advanced technology industries by connecting processed materials with domestic capabilities to generate finished, compliance-ready magnet solutions,” USA Rare Earth said in the news release.

The agreement supports USA Rare Earth’s overall “integrated mine-to-magnet strategy,” the company said. This strategy involves utilizing one of the nation’s richest known deposits of heavy rare earth elements at Round Top Mountain in Texas. It also involves rare earth processing and separation, metal-making through the company’s Less Common Metals subsidiary and magnet manufacturing in the U.S.

Arnold Magnetic Technologies said in a statement that by pairing its magnet manufacturing capabilities with USA Rare Earth’s domestic NdFeB processing and refining, the partnership “advances a more resilient American supply chain, from refined material through finished magnet products.”

“This collaboration directly supports ongoing U.S. policy initiatives and trade measures aimed at strengthening domestic production of rare earth magnets, reducing dependence on foreign suppliers, and mitigating national security risks linked to critical mineral imports,” it said.

Some of these policy initiatives have come under criticism. For example, the U.S. Department of Commerce recently announced a non-binding letter of intent to provide up to $277 million in direct funding and up to $1.3 billion in a senior secured loan to USA Rare Earth under the CHIPS and Science Act. The proposed funding will support two projects in Texas and Oklahoma with estimated capital investments totaling $3.3 billion.

Rep. Zoe Lofgren, D-Calif., ranking member on the House Science, Space, and Technology Committee, wrote a letter to Commerce Secretary Howard Lutnick saying the terms of the government’s equity agreement are “highly concerning” and “deeply strange.” “Most notably... DOC will keep its full equity stake in the company even if the government subsequently backs out of the deal and withdraws its entire investment,” Lofgren said in the letter. She also alleged a conflict of interest because the agreement requires raising private capital, an effort that will be led by Cantor Fitzgerald, a firm controlled by Lutnick’s sons.

Logfren said the USA Rare earth investment is one of “at least 10” federal equity stake agreements the Trump administration has reached with private companies across multiple sectors since July 2025.

“Federal equity stakes distort the free market, warp capital investments, provide preferential treatment to certain favored companies, and open new avenues for corruption,” she said. “They are a terrible idea, plain and simple.”

By: DocMemory
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