U.S. Backs USA Rare Earth with $1.6B Support

The federal government will provide $277 million in direct funding and a $1.3 billion loan to USA Rare Earth (USAR), with the Commerce Department taking 16 million shares, in a deal expected to close this financial quarter.

Officials framed the package as a strategic move to reduce reliance on foreign producers-China currently dominates global rare earth supply chains. Commerce Secretary Howard Lutnick said the investment will help make supply chains more resilient.

USAR plans to develop mining at Round Top Mountain in West Texas, where it holds mineral rights, targeting a 2028 start. The company says it ultimately intends to reach production scales of up to 40,000 tons of rare earth materials per day and to process those materials into permanent magnets used in electric vehicles, wind turbines and other technologies.

USAR already operates a manufacturing facility in Stillwater and reported producing an initial batch of magnets in January 2025. CEO Barbara Humpton told CNBC the administration is pressing for rapid progress and described the government’s role as an economic investor rather than a manager.

USAR declined to detail expected economic impacts for Oklahoma. A Department of Energy official, quoted in the company announcement, said expanding domestic mining and processing will create jobs and bolster national security.