Missouri Site Lands $100 Million Rare Earth Magnet Recycling JV

US Strategic Metals and Ionic Rare Earths USA signed a non-binding term sheet on September 3, 2026 to form a 50-50 joint venture funded with $100 million — $95 million from USSM plus $5 million in equity split evenly — to build NdFeB and SmCo magnet recycling capacity at USSM's 1,750-acre permitted site near Fredericktown, Missouri.

US Strategic Metals has signed a joint venture term sheet with Ionic Rare Earths USA, the wholly owned American arm of Ionic Rare Earths Limited (ASX: IXR; OTC: IXRRF), to build rare earth permanent magnet recycling capacity near Fredericktown, Missouri. The two sides intend to split the venture 50-50 and fund it with $100 million for an initial plant handling both neodymium-iron-boron (NdFeB) and samarium-cobalt (SmCo) magnets.

The money is lopsided even if the ownership is not. USSM would supply $95 million of the intended funding, with a further $5 million in equity split equally between the partners. Ionic's contribution is technology and know-how: it licenses its magnet recycling process to the venture and leads technical operations. That is the classic shape of a deal between a landowner with permits and capital and a developer with a process — one brings the site, the other brings the recipe.

What a magnet recycling plant actually does

Permanent magnets are where most rare earth demand ends up. NdFeB magnets drive electric vehicle traction motors, wind turbine generators, hard drives and industrial robotics. SmCo magnets are the high-temperature cousin, used where heat would demagnetise neodymium — aerospace, defence electronics, certain motors and sensors.

Recycling takes end-of-life magnets and manufacturing scrap and recovers the rare earth content in a form that can be fed back into new magnet production, rather than mining and separating fresh material. In practice it sidesteps the two hardest links in the Western supply chain: the separation of individual rare earth oxides from mixed concentrate, and the metal-and-alloy step. Both are overwhelmingly concentrated outside the United States, and both are the reason a mine in Nevada or Wyoming does not, on its own, produce an American magnet.

That is the strategic argument for the Missouri project as described by INN Rare Earth: it targets the finished-product end of the chain, where the bottleneck bites hardest, rather than adding another feedstock source.

The permitted site is the scarce asset

USSM's contribution is a 1,750-acre processing site that is already fully permitted, and which the company frames as an integrated critical minerals campus. Permits are not a footnote in this sector. Chemical processing of rare earths involves acids, solvents and residues that draw state and federal scrutiny, and permitting timelines have sunk more than one North American processing plan before a shovel moved. Starting on ground that already carries approvals compresses the schedule in a way capital alone cannot buy.

The term sheet supersedes a memorandum of understanding the two companies signed at the Australian Embassy in Washington, D.C. in November 2025. The venue was not incidental — Australia and the United States have been steadily formalising critical minerals cooperation, and Australian-listed developers have become a common route for American projects to access processing technology.

What ASX and OTC holders of Ionic own here

The important qualifier for Ionic shareholders is the word non-binding. The parties have agreed on a non-binding basis to form the venture. A term sheet of this kind sets out intent, economics and roles; it does not by itself commit either side to build anything. Definitive documentation, financing and a final investment decision all sit ahead of it. Investors should read the $100 million as the intended funding envelope, not as money committed to an account.

Within that caveat, the structure is attractive for a company Ionic's size. It takes half the equity in a venture whose construction bill is overwhelmingly carried by its partner, while retaining the licensing relationship for its technology and control of technical operations. Ionic's cash exposure under the stated split is its half of the $5 million equity contribution — an illustrative $2.5 million on the figures given, which is a modest ticket against a $100 million plant. The trade-off is that ownership is shared evenly on a project someone else is largely paying for, and licensing terms, feedstock supply and offtake are the details that will determine whether that balance holds up in the definitive agreement.

The market did not treat the news as a re-rating event. IXRRF last changed hands at 0.26, down 4.75% from a previous close of 0.27, with a session range of 0.26 to 0.29, as of the last trade at 20:00 GMT on September 3, 2026. That was against a broadly strong tape: SPY closed at $773.17, up 1.05%; QQQ at $717.67, up 1.19%; and DIA at $536.93, up 1.19%. A thinly traded over-the-counter line of an Australian small cap will always move on its own logic, but the direction is a reminder that non-binding agreements rarely carry the weight of a signed contract.

Where this sits in the onshoring push

The United States has spent several years trying to rebuild a magnet supply chain that was allowed to migrate abroad. Most of the announced effort has gone into mining and, more recently, into separation and metal-making. Recycling has been the quieter track, partly because feedstock is fragmented — scrap comes from many small streams rather than one orebody — and partly because the economics depend on rare earth prices that have been volatile.

What has changed is the policy environment and the willingness of end users to pay for supply that does not route through a single foreign jurisdiction. A recycling plant co-located with other processing on one permitted campus is a bet that the premium for domestic, traceable magnet feed is durable.

The tests ahead

• Definitive agreement. Whether the non-binding term sheet converts into binding documents, and on what timetable.
• Funding certainty. How USSM sources its $95 million share, and whether any of it depends on external grants or debt.
• Feedstock. Secured supply of end-of-life magnets and manufacturing scrap is the make-or-break input; nothing in the term sheet as described settles it.
• Offtake. Who buys the recovered material, and whether contracts arrive before or after construction.
• Scale-up risk. Ionic's technology moving from its established base into a first-of-kind American facility carries the usual engineering and yield uncertainty.

For now the deal is a statement of intent between a permitted Missouri campus and a licensed process, with the capital split heavily one way and the ownership split evenly. The next document, not this one, decides whether it gets built.

Key facts

• Intended JV funding: $100 million — $95 million from USSM plus $5 million equity split 50-50
• Site: 1,750-acre fully permitted campus near Fredericktown, Missouri
• IXRRF last price: 0.26, -4.75%, as of 20:00 GMT Sept 3, 2026
• Structure: Non-binding 50-50 JV term sheet superseding a November 2025 MOU

Frequently asked questions

What did US Strategic Metals and Ionic Rare Earths agree to?

They signed a non-binding joint venture term sheet to form a 50-50 venture that would build rare earth permanent magnet recycling capacity at US Strategic Metals' permitted site near Fredericktown, Missouri. The parties intend to fund it with $100 million for initial neodymium-iron-boron and samarium-cobalt recycling facilities, with Ionic licensing its technology and leading technical operations.

How is the $100 million split between the partners?

US Strategic Metals would provide $95 million of the intended funding. A further $5 million equity contribution is split equally between the two partners. Ownership of the joint venture is nonetheless 50-50, with Ionic Rare Earths contributing its licensed magnet recycling technology and technical leadership rather than the bulk of the construction capital.

Why does 'non-binding' matter for investors?

A non-binding term sheet records intent, proposed economics and roles, but does not legally commit either party to build. Definitive agreements, financing and a final investment decision all remain ahead. The $100 million figure should therefore be read as an intended funding envelope rather than capital already committed to the project.

What are NdFeB and SmCo magnets used for?

Neodymium-iron-boron magnets are the workhorses of electric vehicle traction motors, wind turbine generators, hard drives and robotics. Samarium-cobalt magnets tolerate much higher temperatures and are used in aerospace, defence electronics and specialised motors and sensors where neodymium magnets would lose their magnetism under heat.

Why is the Missouri site's permitting significant?

Rare earth processing involves acids, solvents and residues that attract heavy state and federal environmental review, and permitting has delayed or killed North American projects before construction began. US Strategic Metals says its 1,750-acre Fredericktown site is fully permitted, which compresses the development schedule in a way that additional capital alone cannot achieve.

How did Ionic Rare Earths' stock react?

The OTC line, IXRRF, last traded at 0.26, down 4.75% from a previous close of 0.27, with a session range of 0.26 to 0.29 as of 20:00 GMT on September 3, 2026. That came on a day when SPY rose 1.05%, QQQ 1.19% and DIA 1.19%.

Sources

• US Strategic Metals and Ionic Rare Earths to Build First U.S. Magnet Recycling Plant in Missouri — INN Rare Earth

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