USA Rare Earth has said the United States Department of Commerce will take a stake of up to 16% in the company, sending shares up 7.9%.
The Department of Commerce will supply USA Rare Earth with US$1.3 billion in loans and $277 million in federal funding, according to its letter of intent. It will receive 16.1 million shares in common stock and 17.6 million in warrants.
“This landmark collaboration with the U.S. Government represents a transformative step in USAR's mission to secure and grow a resilient, independent domestic rare earth value chain," said USA Rare Earth CEO Barbara Humpton.
“The LOI [letter of intent] with the U.S. Government reflects the strategic importance of USAR's mine-to-magnet platform and its role in closing the rare earth element and critical mineral supply gap for essential industries that underpin U.S. national security, including semiconductors, other critical technologies, and advanced manufacturing,” the company wrote.
The U.S. government’s stake would represent 8% to 16% of USA Rare Earth’s ownership, according to a regulatory filing.
Under the terms of the letter, the company would have to meet conditions such as obtaining memorandums of understanding with semiconductor end or midstream users, and outlining a power infrastructure plan for its flagship manufacturing facility.
The company also said today that it raised $1.5 billion from private investors, achieving Commerce’s requirement for securing at least $500 million in other funding.
With these funds, it plans to extract 40,000 metric tonnes per day of rare earth and critical mineral feedstock from its Round Top deposit in Texas once production begins in 2028, and process 8,000 tonnes of third-party minerals per year.
The U.S. government also took stakes in metals producers MP Materials, Lithium Americas, and Trilogy Metals in 2025.
USA Rare Earth’s shares surged by 29% before closing 7.9% higher at $26.72. Its market capitalisation is $3.72 billion.
