US to invest $1.6 billion in rare earths mining for 10% stake
The United States is set to invest $1.6 billion in Oklahoma-based miner USA Rare Earth, acquiring a 10 percent stake in the company, according to a report by the Financial Times on Saturday, as per sources. A report indicates that the government investment, along with a separate $1 billion private financing deal, is set to be announced on Monday. The White House and USA Rare Earth have not yet provided a response to request for comment. The report indicated that the government would acquire 16.1 million shares in the rare earths company, in addition to warrants for another 17.6 million, all priced at $17.17. In December of last year, Washington announced plans for more “historic deals” with the U.S. mining sector aimed at boosting domestic production of lithium, rare earths, and other minerals essential for national defense, thereby reducing reliance on China, which has leveraged its mineral resources in trade negotiations.
In the previous year, the administration acquired equity stakes in MP Materials, Lithium Americas, and Trilogy Metals. The agreement with USA Rare Earth was “focused on onshoring critical and strategic minerals essential to the semiconductor supply chain and US national security,” an official from the U.S. Commerce Department’s CHIPS office, which offers incentives for investment and equipment in the U.S., as stated. The company has also engaged Cantor Fitzgerald, an investment banking and brokerage firm chaired by Brandon Lutnick, the son of U.S. Secretary of Commerce Howard Lutnick, to spearhead efforts to secure over $1 billion in new equity, according to the FT.
USA Rare Earth is in the process of developing a mine in Sierra Blanca, Texas, along with a neo magnet manufacturing facility in Stillwater, Oklahoma, which is anticipated to commence commercial operations in the first half of 2026. The company, boasting a market capitalisation of $3.45 billion, has established itself as a prominent player among large-scale U.S. neo magnet manufacturers.
