The Trump administration is set to make a major strategic investment of $1.6 billion in USA Rare Earth, a key player in domestic rare earth mining and processing, according to a Financial Times report citing sources familiar with the deal. This move aims to bolster US self-sufficiency in critical minerals essential for defense, clean energy technologies, and advanced electronics.

Under the proposed terms, the US government will acquire a 10% equity stake in the company. The investment structure includes the purchase of 16.1 million shares along with warrants for an additional 17.6 million shares, both priced at $17.17 per share. The announcement of this government funding and a separate $1 billion private financing package is expected as early as Monday.

In addition to the equity component, USA Rare Earth will receive $1.3 billion in senior secured debt financing at market interest rates. This debt portion will be drawn from a financing facility established under the Department of Commerce as part of the CHIPS and Science Act, underscoring the administration’s focus on onshoring supply chains for strategic materials.

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The deal reflects growing bipartisan concern over reliance on foreign—particularly Chinese—supplies of rare earth elements, which are vital for everything from electric vehicle batteries and wind turbines to military hardware. USA Rare Earth operates projects aimed at building an end-to-end domestic rare earth magnet supply chain, positioning it as a cornerstone of national security and economic resilience efforts.

Neither USA Rare Earth nor the Commerce Department immediately responded to requests for comment outside regular business hours. If finalized, the investment would mark one of the largest direct government interventions in the rare earth sector in recent years.

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