T he Trump government is acquiring a 10% share in USA Rare Earth (USAR.O) as part of a $1.6 billion debt-and-equity financing package aimed at assisting the firm in developing a domestic mine and magnet factory, according to two persons familiar with the transaction. The Trump government is investing $1.6 billion in USA Rare Earth, including a 10% stake, to support the development of a domestic mine and magnet facility, according to two persons familiar with the transaction.
The transaction and a separate $1 billion private investment will be announced on Monday, and Oklahoma-based USA Rare Earth will hold a morning conference call with investors to discuss the terms, according to one of the persons briefed on the arrangements. The White House did not immediately respond to Reuters' request for comment. US Rare Earth declined to comment. The Financial Times was the first to report on the investment. The Financial Times was the first to report on the investment.
Why This News Matters:
The U.S. government taking a 10% stake in USA Rare Earth is a clear signal that Washington is willing to put taxpayer-backed capital directly into rebuilding strategic supply chains. Rare earths are critical for defense systems, electric vehicles, and advanced electronics—and today, China dominates global processing. By backing domestic mining and magnet production, the administration is trying to reduce a major national security vulnerability and bring more of this industry onshore.
U.S. Backs USA Rare Earth in Push to Cut China Dependence
China is the world's largest processor of rare earths, a group of 17 minerals used to manufacture a variety of electronics and military equipment. The United States generates only modest amounts of rare earths, prompting a push in recent years from Washington to enhance production. USA Rare Earth has partnered with Texas Mineral Resources (TMRC.PK) to establish a mine in Sierra Blanca, Texas, which is expected to open in 2028.
USA Rare Earth has a magnet production facility in Stillwater, Oklahoma, which is set to open later this year. According to the sources, as part of the USA Rare Earth investment, Washington will receive 16.1 million shares of the company as well as warrants for an additional 17.6 million shares. Both would be priced at $17.17 per share, which is roughly where the company's stock traded earlier this month.
Broader Critical Minerals Strategy
The transaction marks the Trump administration's most recent foray into the critical minerals industry, following equity investments in MP Materials (MP.N), Lithium Americas (LAC.TO), and Trilogy Metals (TMQ.TO) last year. The transaction marks the Trump administration's latest foray into the critical minerals industry, following stock investments in MP Materials, Lithium Americas, and Trilogy Metals last year.
Last month, a senior Trump administration official stated that the administration was negotiating more "historic deals" with the United States mining industry to enhance production of lithium, rare earths, and other important minerals needed in national defense, artificial intelligence, and other fields. USA Rare Earth has recruited Cantor Fitzgerald, a financial services business run by Brandon Lutnick, the son of US Secretary of Commerce Howard Lutnick, to assist with fundraising efforts, according to one source.
