USA Rare Earth Falls 5% Despite $1.55B Government-Backed Funding, United States Antimony Drops 9%

David Moadel

Mon, August 24, 2026 at 7:37 PM GMT+3 5 min read

Quick Read

USAR slid 5% despite $1.55B in government-backed funding satisfying a key merger condition; UAMY dropped 9% with no company-specific catalyst.
MP fell 4% while REMX dropped just 2%, flagging today's selloff as small-cap risk rotation inside a still-intact rare earth bid.
Serra Verde's Pela Ema mine is the only site outside Asia commercially producing all four magnetic rare earths, with over $1B already invested.
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Something is definitely going on with critical-mineral stocks today. USA Rare Earth (NASDAQ:USAR) stock is down 5% to $18.26 in Monday midday trading, even after the company cleared a major closing condition for its Serra Verde acquisition with heavy U.S. government backing. United States Antimony (NYSE:UAMY) shares are falling harder, down 9% to $5.02, with no company-specific announcement of their own.

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The VanEck Rare Earth and Strategic Metals ETF (NYSEARCA:REMX) is down 2% to $79.38, absorbing a fraction of the drawdown the individual names are taking. That gap identifies today as small-cap risk-shedding inside the critical minerals theme rather than a repricing of rare earths.

Peers are moving in sympathy. MP Materials (NYSE:MP) stock is down 4% to $57.51, while Critical Metals (NASDAQ:CRML) stock is down 4% to $6.83. The pattern lines up with beta, not headlines.

$1.55B Government Backstop Clears a Key Merger Condition

USA Rare Earth announced this morning it completed the upsized $1.55 billion capitalization of the special purpose vehicle that will purchase 100% of Phase 1 rare earth production from Serra Verde Group. The U.S. Department of War committed $750 million, an increase of $250 million over the $500 million originally contemplated, under an agreement carrying both a take-or-pay arrangement and floor prices. That structure de-risks the offtake economics on Pela Ema output for the vehicle.

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A Tier-1 institutional bank delivered a commitment letter for a senior secured revolving credit facility of up to $500 million for working capital, and the U.S. government entered a forward purchase contract for not less than $300 million of rare earth products over five years. Executive Chairman Michael Blitzer stated, "We appreciate the strategic support and upsized funding commitment of the U.S. government and are proud to continue our strong partnership to build a secure and resilient rare earth supply chain." The capitalization satisfies one of the closing conditions for the Serra Verde merger, with USA Rare Earth stockholders voting on the transaction at a special meeting on August 28.

Size and Volatility, Not Fundamentals

USA Rare Earth is the only name in the group with a company-specific development today, and its shares are still lower. That points at positioning rather than news. United States Antimony stock is falling hardest with no fresh disclosure, while MP Materials shares, from the largest company by market capitalization, are dropping less than the smaller names.

Today's moves track size and volatility rather than fundamentals. USA Rare Earth stock was up 62% year to date through Friday's close, MP Materials stock was up 19%, United States Antimony stock was up 9%, and Critical Metals stock was up 2%. The biggest year-to-date gainer is giving back the most today, consistent with profit-taking after a strong summer run. A 2% REMX move against 4% to 9% moves in the four U.S. listings implies overseas rare earth producers held up better than domestic ones, an inversion of the normal government-support trade that has driven the U.S. names this year.

Serra Verde Would Give USAR a Unique Asset

On closing, USA Rare Earth would own the Pela Ema mine in Goiás, indicated as the only ionic clay rare earth mine in commercial production outside Asia and the only mine outside Asia commercially producing all four magnetic rare earths. The combined business would operate across the United States, the United Kingdom, and Brazil.

More than $1 billion has been invested in Serra Verde to date, giving USA Rare Earth a mature asset base to inherit rather than a greenfield build-out. The company is separately targeting 600 metric tons per annum of magnet manufacturing capacity at its Stillwater, Oklahoma facility by the fourth quarter of 2026, tying the upstream feedstock secured by today's financing to downstream magnet output.

What Investors Should Watch Next

The August 28 shareholder vote is the next hard catalyst for USA Rare Earth. Investors should keep an eye on the stock for signs the merger arithmetic is being reassessed as the vote result and remaining closing conditions come into view. Analyst target prices for USAR still sit at $37.38, well above today's tape.

Given USAR's 2.58 beta and the sharp year-to-date gain, investors should size positions to accommodate daily swings of this magnitude around vote and closing headlines. For those sitting on outsized gains, trimming into strength rather than adding on weakness is the more defensive posture, particularly with the entire critical minerals complex trading heavy. If the REMX fund holds its shallower decline while the small caps stabilize, today reads as position rotation inside a still-intact rare earth bid.