USA Rare Earth Lines Up $3.1 Billion Public, Private Funding to Fast-Track Mining Operations

The company’s operations will be America’s first mine-to-magnet production facility.

Round Top rare-earth mineral deposit in West Texas. Courtesy of USA Rare Earth

USA Rare Earth said on Jan. 26 that it had entered into a nonbinding letter of intent with the Department of Commerce for a $1.6 billion financing agreement that includes a $1.3 billion secured loan and $277 million in federal funding.

In addition to the loan package, issued under the Department of Commerce’s CHIPS for America program, USA Rare Earth said it had raised an additional $1.5 billion in private equity funding anchored by Inflection Point Acquisition Corp. III that’s expected to close on Jan. 28 subject to routine closing conditions. The CHIPS funding and secured loan, meanwhile, are expected to close in the first quarter of 2026, also pending finalization of customary closing conditions.

Energy Secretary Chris Wright said the Department of Energy is also partnering with USA Rare Earth to rebuild the nation’s critical minerals supply chain. USA Rare Earth expects to begin commercial mining operations at its Round Top rare-earth minerals mine in Hudspeth County, Texas, by 2028. Those materials will provide feedstock for the company’s magnet production facility in Stillwater, Oklahoma, which is expected to be commissioned in the first quarter of this year.

“By expanding domestic mining, processing, and manufacturing capabilities, we are creating good-paying American jobs and safeguarding our national security,” Wright said.

USA Rare Earth stated in a filing with the Securities and Exchange Commission that it will issue 17.6 million in warrants and 16.1 million shares of its common stock to the Department of Commerce as part of the federal funding deal. The letter of intent lessens risk and accelerates the company’s plans for its commercial mining and magnet production facilities, according to USA Rare Earth CEO Barbara Humpton.

“This landmark collaboration with the U.S. Government represents a transformative step in [USA Rare Earth’s] mission to secure and grow a resilient, independent domestic rare-earth value chain,” Humpton said.

“With this unprecedented show of public and private support for our Company, we are positioned to accelerate the build-out of important domestic capabilities that are essential to U.S. national security, global economic competitiveness, and critical technologies of the future.”

Shares of USA Rare Earth’s stock jumped by nearly 20 percent in intraday trading on the news of the deal with the federal government.

The federal funding package is another step toward President Donald Trump’s goal of building out a domestic supply chain of rare-earth minerals to lessen the country’s dependence on foreign countries. Additional investments by the Trump administration include a $700 million conditional loan commitment to Vulcan Elements, a $400 million equity stake in MP Materials, and 5 percent equity ownership in Lithium Americas in a deal that provided the company with more than $100 million in new equity.

USA Rare Earth’s operations will be the country’s first mine-to-magnet production facility.

“Accelerating the onshoring of rare-earth minerals, metals, and magnets is paramount to national and economic security,” said Michael Grimes, executive director of the Department of Commerce’s U.S. Investment Accelerator.

“With the Department of Commerce’s funding for USA Rare Earth’s vertically integrated mine-to-magnet operations, we will significantly increase the domestic supply of crucial components for semiconductors, defense, and numerous other industries strategic to the United States.”