US to Buy 10% Stake in Rare Earths Miner with $1.6 Billion Investment

As per Reuters report, the Trump administration is set to acquire a 10% equity stake in USA Rare Earth through a $1.6 billion debt-and-equity funding package aimed at accelerating the development of domestic rare earth mining and magnet manufacturing facilities. 

Strategic Investment to Strengthen Domestic Supply Chain 

Under the proposed transaction, Washington will receive 16.1 million equity shares and warrants for an additional 17.6 million shares in USA Rare Earth. Both instruments are priced at $17.17 per share, close to the company’s recent trading levels. 

The funding initiative will be formally unveiled on Monday, alongside a separate $1 billion private investment. Oklahoma-based USA Rare Earth is scheduled to host a conference call with investors to outline transaction details. 

The investment underscores Washington’s renewed push to strengthen domestic production of critical minerals, particularly as China dominates global rare earth processing.  

Rare earths are essential inputs for defence equipment, renewable energy systems, electric vehicles, electronics, and artificial intelligence applications. 

Project Expansion Plans in Texas And Oklahoma 

USA Rare Earth is developing a rare earth mining project in Sierra Blanca, Texas, in partnership with Texas Mineral Resources. The mine is expected to commence operations by 2028. 

In parallel, the company is constructing a magnet manufacturing facility in Stillwater, Oklahoma, scheduled to begin production later this year.  

Together, the projects aim to create an integrated domestic supply chain covering both mining and advanced manufacturing. 

Policy Context and Broader Critical Minerals Strategy 

The move follows earlier investments by the Trump administration in critical minerals companies, including MP Materials, Lithium Americas, and Trilogy Metals.  

These initiatives form part of a broader strategy to reduce US reliance on overseas mineral supply chains, especially for materials vital to national security and industrial competitiveness. 

USA Rare Earth has appointed Cantor Fitzgerald to advise on capital raising activities associated with the transaction. 

Read More: Trump’s 10% Credit Card Rate Cap Raises Concerns Over $70 Billion Debt Market! 

Conclusion 

The proposed $1.6 billion investment marks one of the most significant government-backed interventions in the US rare earth sector, reinforcing Washington’s strategic objective of securing domestic critical mineral supply chains and reducing dependence on China. 

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