Trump Administration to Acquire 10% Stake in USA Rare Earth in $1.6 Billion Investment to Boost Domestic Critical Minerals

BY COMFORT OGBONNA

The Trump administration is taking a 10% stake in USA Rare Earth (USAR.O) as part of a $1.6 billion debt-and-equity investment package designed to support the development of a domestic rare earth mine and a magnet manufacturing facility, according to sources familiar with the deal. Alongside this investment, a separate $1 billion private funding package will also be announced, with USA Rare Earth, based in Oklahoma, hosting a morning conference call with investors to outline the terms of both agreements.

China currently dominates global rare earth processing, a group of 17 minerals crucial for a wide range of electronics, renewable energy technologies, and military equipment. The United States produces only limited quantities of these minerals, which has prompted federal efforts to increase domestic production and secure supply chains for critical materials.

USA Rare Earth has been developing a mine in Sierra Blanca, Texas, in partnership with Texas Mineral Resources (TMRC.PK), with operations planned to begin by 2028. The company also operates a magnet manufacturing facility in Stillwater, Oklahoma, which is expected to launch later this year, further strengthening domestic capabilities in rare earth processing.

Under the terms of the investment, the U.S. government will receive 16.1 million shares in USA Rare Earth, along with warrants for an additional 17.6 million shares. Both shares and warrants are priced at $17.17 each, close to the company’s recent trading levels.

This investment is the latest step by the Trump administration to expand its presence in the critical minerals sector. Last year, the administration acquired stakes in several other companies, including MP Materials (MP.N), Lithium Americas (LAC.TO), and Trilogy Metals (TMQ.TO), as part of broader efforts to increase domestic production of rare earths, lithium, and other key minerals.

A senior Trump administration official recently indicated that additional “historic deals” with the U.S. mining sector are planned to bolster production of materials critical to national defense, artificial intelligence, and other strategic technologies.

USA Rare Earth has engaged Cantor Fitzgerald, a financial services firm chaired by Brandon Lutnick, the son of U.S. Secretary of Commerce Howard Lutnick, to assist with fundraising for the projects. The investment reflects Washington’s growing focus on strengthening domestic supply chains, reducing reliance on foreign sources, and advancing U.S. capabilities in minerals that are vital to both industry and national security.

With this deal, USA Rare Earth is positioned to accelerate the development of its mine and magnet production facilities, providing a significant boost to U.S. efforts to compete in the global rare earths market while supporting national security and advanced technology initiatives.