USA Rare Earth, Inc. USAR is working to develop rare earth mining and magnet manufacturing facilities in the United States, including the Round Top mining facility in Texas and a magnet manufacturing plant in Oklahoma.  However, the company remains in the pre-revenue stage, as its mining assets are yet to reach commercial-scale production, resulting in continued operating losses since inception.

USAR has been grappling with rising development costs as it advances through the development phase. In the third quarter of 2025, the company’s selling, general and administrative expenses increased to $11.4 million from $0.8 million reported in the prior-year period, due to higher legal and consulting fees, increased headcount, recruiting costs and other overheads. 

USA Rare Earth’s research and development expenses climbed to $4.45 million from $1.16 million, primarily due to higher employee-related costs associated with workforce expansion. As a result, the company reported a loss of 25 cents per share for the third quarter.

Despite the rising costs, USA Rare Earth continues to make progress toward the planned commercialization of several of its rare earth projects. These projects are still expected to require at least a few quarters before reaching commercial production.

It is worth noting that USAR announced that its Round Top rare earth and critical minerals project is now expected to begin commercial production in late 2028, two years earlier than previously anticipated. Until revenues commence, elevated project development spending and operating costs are likely to remain a headwind in the near term. The lack of revenues, coupled with rising development costs, is likely to weigh on the company’s near-term results.

Among its major peers, Trilogy Metals Inc. TMQ continues to maintain financial discipline as it advances work at the Upper Kobuk Mineral Projects through its joint venture, Ambler Metals LLC. For the first nine months of fiscal 2025 (ended Aug. 31, 2025), Ambler Metals recorded $3.8 million in expenditures tied to the ongoing programs, including salaries, engineering works, professional fees and project support activities. Trilogy Metals’ disciplined capital approach is allowing it to manage expenditures at a time when development projects often require significant investment.

Its another peer, NioCorp Developments Ltd. NB is facing cost pressure. In the third quarter of 2025, its total operating expenses increased significantly on a year-over-year basis due to expenses incurred for the advancement of the Elk Creek Project. Rising costs and expenses, if not controlled, might affect NioCorp Developments’ margin performance moving ahead.