USA Rare Earth Inc. (NASDAQ: USAR) commissioned a hydrometallurgical demonstration facility in Wheat Ridge, Colorado, targeting first production of separated rare earth oxides in the third quarter of 2026.

The facility aims to produce heavy rare earth oxides including dysprosium, terbium and yttrium. The company states this would position it among few Western companies capable of producing these materials at commercial quality.

The demonstration program will test three processing methods: ore from the company's Round Top deposit in Texas, third-party mixed rare earth carbonate feedstock including material from Serra Verde's Pela Ema mine in Brazil, and rare earth magnet recycling.

The Wheat Ridge plant features automated operations with real-time monitoring across all processes. A team of 28 engineers, scientists and technicians will operate the facility in rotating shifts. The company plans to use process data for a digital twin development program with the U.S. Department of Energy's National Energy Technology Laboratory.

"Very few companies outside China have proven they can produce separated oxides of neodymium and praseodymium, dysprosium, terbium and yttrium at commercial quality," said Dr. Alex Moyes, senior vice president of mining and processing.

USA Rare Earth operates across the rare earth value chain through its ownership of Less Common Metals, magnet manufacturing in Oklahoma, and mining operations. The company expects oxide production to supply its downstream operations including permanent magnet manufacturing.

The demonstration facility's results are expected to support the Round Top Definitive Feasibility Study, scheduled for completion in the fourth quarter of 2026 and publication in the first quarter of 2027.