U.S. plans $1.6 billion package for USA Rare Earth, taking a 10% stake, report says
USA Rare Earth shares surged after a report said the U.S. government plans to inject $1.6 billion into the company in a debt-and-equity package that would give Washington a 10% stake. The move would deepen the government’s involvement in critical minerals as it seeks to reduce reliance on China for rare earth supply chains.
A bigger federal role in critical minerals
The U.S. government plans to provide $1.6 billion to Oklahoma-based USA Rare Earth and receive a 10% stake in the miner, according to a report cited by Reuters. The package underscores Washington’s push to expand domestic production and processing capacity for rare earths and other strategically important minerals.
The report said the government investment, alongside a separate private financing deal, was expected to be announced on Monday. Investors reacted quickly, sending the company’s shares sharply higher in premarket trading as the market repriced the business around the prospect of large-scale funding.
Deal structure details
According to the report, Washington would receive 16.1 million shares and warrants for an additional 17.6 million shares, both priced at $17.17. A 10% position would make the government a major shareholder and could give it meaningful influence over long-term strategic direction.
The White House and USA Rare Earth did not immediately respond to a Reuters request for comment at the time of publication. The report said the financing plans were known to people familiar with the matter.
Why markets care
Rare earth elements are essential inputs for magnets used in electric motors, wind turbines, consumer electronics, and defense systems. Policymakers have repeatedly argued that supply concentration outside the U.S. poses national security and industrial risks, particularly when trade tensions rise.
If finalized, a federal-backed funding package could accelerate permitting, project development, and downstream processing capacity. It may also change the risk profile of USA Rare Earth by signaling that the company’s assets align with national industrial policy priorities.