The Tiny Magnet Maker That Attracted $1.6 Billion From Lutnick

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Bloomberg Audio Studios, Podcasts, Radio, News.

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You're listening to Bloomberg Businessweek with Carol Massar and Tim Stenovec on Bloomberg Radio.

Tim Stenovec (0:15)

Rare Earths and Critical Minerals.

Carol Massar (0:17)

Got to go there.

Tim Stenovec (0:17)

We got to go there. 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 Siemens USA.

When USA Rare Earth went public back in March of 2025, now she's CEO of this company. It had a market value of just $464 million. Now it's got a market cap just shy of $5.8 billion.

SPEAKER_1 (0:38)

Big difference.

Tim Stenovec (0:39)

Thanks in part to the $1.6 billion it's gotten from Commerce Department Secretary Howard Lutnick. USA Rare Earth and its unproven assets are the subject of the Bloomberg News investigation by Joe Deaux. He's Bloomberg News Senior Reporter for Corporate & Economic Statecraft. 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.

Before we get into some of the numbers here, the assets that USA Rare Earth has, what are they and what is available now for them to actually mine?

Joe Deaux (1:13)

Okay, they have a mine deposit in Round Top, which is outside of El Paso, Texas, 75 miles or so. They have a magnet manufacturing plant in Stillwater, Oklahoma that's still getting up to scale.

They now also have a metallization company in the United Kingdom and a processing technology that they've bought into in France. Then, they now have a Brazilian Rare Earth Mine, which we get into the story that they're still trying to figure that out. That is effectively all the assets they have, which by the way, in 2019, when I first started covering this company, they had a percentage stake in the mine in Texas, and that's all they were.

Carol Massar (2:00)

Yay, problem solved. US has all the critical minerals or rare materials that it needs, right?

Joe Deaux (2:07)

Yeah, listen, how do you end up doing a story about a company called USA Rare Earth that most people have never heard of? Well, you find out that they get a $1.6 billion commitment from the Commerce Department, led by Howard Lutnick, and then you find out that they raised a $1.5 billion pipe concurrently with the promise commitment from the United States federal government, and the co-placement agents on that pipe were Cantor Fitzgerald and Mollis, and there were about $50 million in fees that were earned from that. Now, we don't know how those fees were split.

Tim Stenovec (2:43)

Explain the Cantor Fitzgerald and Howard Lutnick connection, please, for people who might not be familiar.

Joe Deaux (2:47)

Cantor Fitzgerald is the former financial firm that Howard Lutnick ran for a very long time. For those who were paying attention to, unfortunately, the 25-year anniversary of 9-11, the Commerce Secretary Lutnick did talk about the fact that he lost most of his firm during 9-11, and devastating moment. So there's real history here for Cantor Fitzgerald. He left Cantor Fitzgerald when he became the Commerce Secretary, and his sons took over leading the company. Now listen, our story is not going into saying that necessarily something wrong happened here, but they were the placement agent on this.

The company, Barbara Humpton herself told us, was struggling to get attention in Washington before she came in in October 1st of 2025 Those are her own words in the interview.

Now we're sitting here nine months after the Commerce Department announced that it was going to give a commitment to USA Rare Earth. And we finally did a deep dive, connecting all the dots of what this company is now versus what it was, all the money that has been swirling around from the private markets, but also from the public money that's been given to it. And we felt like there was a whole lot here that readers, Bloomberg followers could really benefit from hearing.

Tim Stenovec (4:16)

I just want to say a spokesperson for Cantor said the firm has a long-standing relationship with USA Rare Earth that predates Lutnick's appointment and helped with its public listing in early 2025 Quote, Cantor had no role in USA Rare Earth's negotiations or financing arrangements with the US government, including any matters involving Secretary Lutnick, who is fully divested from the firm. The spokesperson said and then a spokesperson for the Commerce Department said that neither Lutnick nor anyone else at the agency has interacted with or had any discussions whatsoever with Cantor Fitzgerald regarding the rare earth minerals industry.