The United States is preparing to invest $1.6 billion into Oklahoma-based miner USA Rare Earth, taking a 10% ownership stake in a move aimed at strengthening America\u2019s domestic supply of critical minerals. The Financial Times reported the deal will be announced Monday alongside a separate $1 billion private financing round, signaling a major escalation in federal support for strategic resource development.<\/p>\n\n\n\n
According to the report, the government would receive 16.1 million shares in USA Rare Earth, plus warrants for an additional 17.6 million shares, both priced at $17.17. Investors reacted quickly, sending USA Rare Earth shares up nearly 40% in premarket trading on Monday, reflecting heightened confidence in the company\u2019s growth prospects and the importance of U.S.-based rare earth capacity.<\/p>\n\n\n\n
The investment is part of Washington\u2019s broader effort to reduce dependence on China, which dominates much of the global rare earth supply chain and has used its mineral leverage in trade negotiations. In December, U.S. officials signaled that \u201chistoric deals\u201d were coming to boost domestic production of lithium, rare earths, and other minerals critical to national defense. The administration has already taken equity stakes in other strategic miners, including MP Materials, Lithium Americas, and Trilogy Metals.<\/p>\n\n\n\n
An official from the U.S. Commerce Department\u2019s CHIPS office reportedly said the deal is focused on \u201conshoring critical and strategic minerals essential to the semiconductor supply chain and U.S. national security.\u201d Rare earth elements are central to advanced electronics, defense systems, and industrial technologies, while neo magnets\u2014one of USA Rare Earth\u2019s key areas\u2014are essential components in motors, robotics, and a wide range of AI-enabled devices.<\/p>\n\n\n\n
USA Rare Earth is currently developing a mine in Sierra Blanca, Texas, and a neo magnet manufacturing facility in Stillwater, Oklahoma. The magnet plant is expected to reach commercial production in the first half of 2026. With a market capitalization of roughly $3.45 billion, the company is emerging as a large-scale U.S. player in an industry increasingly viewed as strategic infrastructure.<\/p>\n\n\n\n