USA Rare Earth, Inc. (Nasdaq: USAR) announced that its hydrometallurgical facility in Wheat Ridge, Colorado, has produced commercial-grade dysprosium (Dy) oxide and neodymium-praseodymium (NdPr) oxide samples from recycled rare earth magnet scrap, known as "swarf."

The swarf used in the process was sourced from the company's magnet manufacturing facility in Stillwater, Oklahoma. The material consists of fine scrap generated when neodymium-iron-boron (NdFeB) magnets are machined and finished.

According to the company, the produced oxides are expected to be sent to Less Common Metals (LCM), USA Rare Earth's subsidiary in the United Kingdom, for qualification and conversion into rare earth metals and strip cast, which would then serve as feedstock for its U.S. magnet manufacturing facilities.

The company claims this positions it among a small number of producers outside Asia capable of separating heavy rare earths at commercial specification. Virtually all Dy oxide is currently produced in China, according to the press release.

USA Rare Earth stated that swarf recycling is projected to support up to 30% of future magnetic rare earth oxide feedstock needs. The company also indicated the validated process could potentially be extended to incorporate end-of-life magnets as an additional feedstock source.

Additional processing campaigns at Wheat Ridge are underway using material from the company's Round Top project in Texas and Serra Verde's Pela Ema mine in Brazil, with additional rare earth and critical mineral oxide varieties expected to be produced in the coming weeks.

The Wheat Ridge facility operates 24 hours a day and is designed to simulate a planned future commercial-scale separation facility, generating data intended to inform engineering design for that larger operation.