Episode summary
The Tiny Magnet Maker That Attracted $1.6 Billion From Lutnick | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 12 min · Hosts: Carol Massar, Tim Stenovec · Guests: Joe Deaux
Summary
USA Rare Earth has gone from a $464 million public company in March 2025 to a market value just shy of $5.8 billion after a $1.6 billion Commerce Department commitment and a concurrent $1.5 billion private placement. Joe Deaux says the bigger question is not the political controversy around Howard Lutnick and Cantor Fitzgerald, but whether the company’s assets can actually support the promised U.S. magnet supply chain.
Deaux describes a portfolio that includes the Roundtop deposit in Texas, a magnet plant in Stillwater, Oklahoma, a metalization company in the United Kingdom, processing technology in France, and a Brazilian rare earth mine. He says people familiar with the assets have long questioned the Texas deposit and raised serious concerns about the Brazilian project’s ability to separate clay from rock.
He argues the financing itself underscores the risk: about $50 million in fees were generated on the private deal, while no Commerce Department money has yet been disbursed because milestones have not been met. The episode frames USA Rare Earth as part of a broader pattern of government-backed industrial policy where due diligence, project quality, and eventual taxpayer exposure remain unresolved.
Key takeaways
- Joe Deaux says USA Rare Earth’s valuation jump was driven by a $1.6 billion Commerce Department commitment and a $1.5 billion private placement, not by proven operating results.
- Deaux says the company’s assets span Texas, Oklahoma, the U.K., France and Brazil, complicating its original pitch as a domestic mine-to-magnet solution.
- He says people familiar with the Roundtop deposit and the Brazilian mine have raised major processing doubts, including trouble separating clay from rock.
- The Commerce Department has not yet sent any money because USA Rare Earth has not met the required milestones, Deaux says.
- Deaux says the private placement produced about $50 million in fees, highlighting how much capital has already been raised around the government promise.
Notable quotes
“Okay. Uh they have a mine deposit in Roundtop, which is outside of El Paso, Texas, 75 miles or so”
“They now also have a metalization company in the United Kingdom and a processing technology that they've bought into in France”
“they cannot separate the clay from the rock”
“Not all of them will work out, but the one or few that do means it's worth all the money and all the time”
How the episode opens
Bloomberg Audio Studios podcasts, radio news. — You're listening to Bloomberg Business Week with Carol Masser and Tim Stenc on Bloomberg Radio. Rare Earth and Critical Minerals. — Got to go there. — We got to go there. It brings us to the company USA Rare Earth. It's run by Barbara Humpton, someone whom we've spoken to quite a bit. That was back when she was CEO of Seammen's USA. When USA Rare Earth went public back in March of 2025, now she's CEO of this company. Okay. It had a market value of just $464 million. Now it's got a market cap just shy of $5.8 billion. Big
Difference. — Thanks in part to the 1.6 billion it's gotten from Commerce Department Secretary Howard Lutnik. USA Rare and its unproven assets are the subject of a Bloomberg News investigation by Joe Doe. He's Bloomberg News senior reporter for corporate and economic statecraftraft. He joins us here in the Bloomberg interactive brokers studio. Congratulations on this story. It's a great piece. I encourage everybody to check it out. Uh I before we get into some of the numbers here, yeah,
The assets that that USA Rareear has, — Uh what are they? — Okay. — And what is available now for them to actually mine?
Okay. Uh they have a mine deposit in Roundtop, which is outside of El Paso, Texas, 75 miles or so. They have a mag magnet manufacturing plant in Stillwater, Oklahoma that's still getting up to scale.
They now also have a metalization company in the United Kingdom and a processing technology that they've bought into in France. And then uh they now have a Brazilian rare earth mine um which we get into the story that they're still trying to figure that out.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- rare earth magnets
- government funding
- conflicts of interest
- supply chain china
- private fundraising
Companies and tickers mentioned
- USA Rare Earth Inc.
- Cantor Fitzgerald
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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