US Takes 10% Stake in USA Rare Earth as Part of $3.1B Deal

The US government is acquiring a 10% equity stake in USA Rare Earth, forming part of a wider $3.1 billion financing package to develop a Texas mine.

The United States government, via the Department of Energy, is acquiring a 10% equity stake in USA Rare Earth LLC (Nasdaq: USAR) as the cornerstone of a wider $3.1 billion financing package announced today. This strategic investment supports the development of the company's Round Top rare earth elements mine and processing facility in Texas, marking a significant step in building a domestic critical minerals supply chain.

The $3.1 billion in total backing includes direct federal equity, loan guarantees from the DOE Loan Programs Office, and private capital. This represents the fourth direct equity investment by the U.S. government in a domestic mining company since July 2025, underscoring a concerted push to reduce dependency on Chinese-controlled supplies. The funds will be used to advance permitting, construction, and the build-out of a full "mine-to-magnet" production line in Texas.

“This partnership with USA Rare Earth is a direct investment in our nation’s economic security and energy independence,” said the Secretary of Energy. The CEO of USA Rare Earth stated, “This federal endorsement and capital enables us to accelerate our timeline and establish a secure, sustainable source of permanent magnet materials essential for EVs, defense systems, and clean energy.”

This move is part of the Biden administration's aggressive implementation of the Defense Production Act for critical materials and follows the CHIPS and Science Act's focus on supply chain sovereignty. It addresses a severe vulnerability, as China currently controls over 80% of global rare earth processing. Developing a domestic alternative is considered vital for national security and the domestic manufacturing of electric vehicles and wind turbines.

The deal is contingent on final due diligence and closing conditions. Further details on the financing structure and project milestones are expected to be released by the Department of Energy in the coming weeks as the project moves toward a final investment decision.