I'm Not Buying USA Rare Earth Yet. Here's the 1 Thing I'm Waiting to See.
Axe Cap view
Waiting on USA Rare Earth's Feasibility Study
Political support and a prime deposit make USA Rare Earth tempting, but the project remains too uncertain for now.
Rare earths have attracted a lot of headline attention, especially with the U.S. pushing to onshore critical minerals. USA Rare Earth's Round Top deposit in Texas is certainly impressive – it holds most rare-earth elements and has hooked potential buyers. But here’s the rub: it’s a mining project still years away from proving if it can actually turn a profit. The definitive feasibility study, arriving in early 2027, will shed real light on cost and scalability. Until then, investors betting on USAR are speculating on a promise, not a profit. For South African investors, the local impact is indirect—watch USD/ZAR volatility closely, as stronger dollar support from U.S. strategic minerals can weigh on the rand and domestic sectors exposed to foreign input costs. That said, if the study disappoints, expect the stock to face major downdrafts. this is just our opinion and not financial advice
Avoid buying USAR for now. Wait until after the feasibility study confirms economics before considering entry. In the meantime, monitor USD/ZAR for signals linked to global commodity shifts.
- USAR
- USD/ZAR
- Delays or negative findings in feasibility study
- U.S.-China trade tensions undermining demand
6/10
Despite strong political support for domestic rare-earth production and a recent U.S.-China trade agreement addressing supply chain concerns, analyst Scott Levine remains cautious about USA Rare Earth stock. While the company's Round Top deposit in Texas is promising and has secured 30 potential customers, Levine is waiting for the completion of the definitive feasibility study (expected early 2027) before investing, citing the project's current speculative nature.
Our take is based on reporting first published by The Motley Fool.