USA Rare Earth Inc. (NASDAQ: USAR) saw its stock soar 5.20% in Tuesday's pre-market trading following the announcement of a new partnership aimed at securing a domestic rare earth magnet supply chain. The company signed a memorandum of understanding (MOU) with The StudBuddy®, a manufacturer of magnetic stud finder tools, marking a significant step towards USA Rare Earth's goal of establishing a U.S.-based rare earth element magnet production supply chain.

The partnership underscores both companies' commitment to domestic manufacturing and production. Under the proposed agreement, USA Rare Earth plans to supply approximately 20 metric tons of finished sintered neodymium magnets annually to StudBuddy. This collaboration comes on the heels of USA Rare Earth's recent commissioning of its Innovations Lab in Stillwater, Oklahoma, further demonstrating the company's progress in bringing rare earth magnet production back to the United States.

USA Rare Earth is currently constructing a 310,000 square foot rare earth sintered neo magnet manufacturing facility in Stillwater, Oklahoma. The company also controls mining rights to the Round Top Mountain rare earth and critical minerals deposit in West Texas. With this vertically integrated approach, USA Rare Earth is positioning itself as a key player in the critical tech minerals industry, serving various sectors including defense, automotive, and consumer electronics. The positive market reaction suggests investors are optimistic about the company's strategy and its potential impact on the domestic rare earth supply chain.