Will USA Rare Earth's Arnold Partnership Enhance Rare-Earth Supply Chains?

USA Rare Earth, Inc. USAR has entered into a mutual sales and distribution agreement with Arnold Magnetic Technologies Corp. Arnold is a subsidiary of Westport, CT-based Compass Diversified CODI. The partnership aims to strengthen the U.S. supply chain for rare earth magnets used in critical industries.

Per the deal, both companies can sell each other’s products. USA Rare Earth will distribute Arnold’s finished magnets made from samarium-cobalt (SmCo) and neodymium-iron-boron (NdFeB). On the other hand, Arnold will provide USA Rare Earth’s processed NdFeB materials and finished magnets. Each company will be accountable for the quality and liabilities associated with its products.

This collaboration improves access to domestically produced, high-performance magnets for sectors like aerospace, defense, semiconductors and advanced technologies. By combining USA Rare Earth’s material processing and magnet production with Arnold’s engineering and manufacturing expertise, the customers will benefit from a wider range of reliable, US-made solutions.

The deal also supports efforts to reduce reliance on foreign rare earth supply chains, which are currently highly concentrated outside the United States. The agreement strengthens domestic capabilities and aligns with U.S. national security and industrial policy goals.

Notable Partnerships of USAR’s Peers

Among its major peers, MP Materials Corp. MP recently formed a joint venture with the U.S. Department of War and Saudi Arabia’s mining company (Maaden) to build a rare-earth refinery in Saudi Arabia. MP Materials will use its technical expertise to process rare-earth materials for the US, Saudi Arabia and allied manufacturing and defense industries. MP Materials’ joint venture will strengthen global supply chains, expand its refining capacity and support U.S.-Saudi economic ties.

In August 2025, USAR’s peer, Energy Fuels Inc. UUUU, signed an MOU with Vulcan Elements to supply rare earth oxides for US-based magnet production. Per the deal, Energy Fuels will provide NdPr and Dy oxides to Vulcan from its White Mesa Mill in Utah for quality verification and future long-term supply. Energy Fuels is producing high-purity, ex-China rare earth oxides at a commercial scale, supporting a domestic rare earth magnet supply chain.

USAR’s Price Performance, Valuation & Estimates

Shares of USAR have gained 19.7% in the past three months compared with the industry’s growth of 3.1%.

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From a valuation standpoint, USAR is trading at a forward price-to-earnings ratio of negative 52.01X against the industry’s average of 12.87X. USA Rare Earth has a Value Score of F.

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The Zacks Consensus Estimate for USAR’s 2026 earnings has increased over the past 60 days.

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The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Compass Diversified Holdings (CODI): Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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