USA Rare (USAR) Earth Falls 12.7% as Govt Picks Foreign Firm for New Deal

Company Overview - USA Rare Earth, Inc. (NASDAQ:USAR) experienced a significant drop in share prices, falling by 12.73% to $14.87, reflecting broader market trends and industry declines [1][3] - The company is currently developing a mine site in Sierra Blanca, Texas, and a magnet production facility in Stillwater, Oklahoma [5] Government Actions - The Trump administration formed a joint venture with US-based strategic investors, acquiring a 10% stake in Korea Zinc for $2 billion and a 40% ownership in a $7.4 billion mineral smelter in Tennessee [2] - This decision to partner with a non-US-based firm for zinc production negatively impacted investor sentiment towards USA Rare Earth, which had been seeking government support for its own projects [3][4] Industry Context - The new zinc production site is expected to produce 540,000 tons of zinc minerals annually, highlighting the competitive landscape in the rare earth minerals sector [3] - USA Rare Earth had been in discussions with the US government for potential partnerships, especially after the government’s investments in other companies like Lithium Americas and MP Materials [4]