USA Rare Earth Soars 21% After U.S. Government Takes Equity Stake, Offers $1.6 Billion Funding
Strategic metals play rockets on a direct capital injection from Uncle Sam.
The National Bet
Forget venture capital—the ultimate deep pocket just walked in. A direct equity investment from the federal treasury signals more than confidence; it's a geopolitical chess move dressed as a balance sheet entry. The market's immediate double-digit surge votes yes.
The Price of Sovereignty
That staggering funding offer, a number large enough to make even a defense contractor blush, isn't just an investment. It's the cost of building a supply chain fortress. The bid? To untangle critical mineral reliance from foreign hands. The bet? That domestic production can be spun up faster than a new conflict emerges.
Capitalism, with a Government Guarantee
This isn't a subsidy hiding in the fine print—it's a headline-making stake. It turns a mining operation into a quasi-public utility overnight, blending industrial policy with raw market mechanics. The result is a stock chart that looks more like a crypto token on a rumor pump—because when the lender of last resort becomes your lead investor, risk gets a serious re-rating.
Let's be real: nothing makes a stock jump like free government money—it's the ultimate 'smart money' narrative, until the quarterly reports are due.
Trump funds Round Top and magnet factory in supply chain push
The new capital will support USA Rare Earth’s plans to build a magnet plant in Stillwater, Oklahoma, and develop a rare earth mine in Texas known as Round Top. Both projects are considered key to breaking dependence on Chinese supply lines. The TRUMP administration has been lining up big checks to make it happen.
“USA Rare Earth’s heavy critical minerals project is essential to restoring U.S. critical mineral independence,” Commerce Secretary Howard Lutnick said in a statement. “This investment ensures our supply chains are resilient and no longer reliant on foreign nations.”
This isn’t the first time Trump’s team has used equity to get leverage. Last year, the government struck a deal with MP Materials, which included a price floor, equity stake, and offtake agreement.
The feds also grabbed pieces of Lithium Americas and Trilogy Metals. Every MOVE has the same goal: stop the U.S. from having to rely on China’s grip on minerals needed for things like semiconductors, EVs, defense tech, and robotics.
U.S. eyes Greenland rare earths as China’s control faces pushback
China still controls most of the rare earth supply chain, and that power showed up last year when Beijing tried to block exports during trade fights with Trump.
But Trump isn’t just targeting China’s mainland holdings. His administration is now circling Greenland, home to the world’s eighth-largest rare earth reserves at 1.5 million metric tons, based on 2024 numbers from the U.S. Geological Survey.
Beijing, through Shenghe Resources, is also invested in Greenland’s Kvanefjeld mining project, which holds the third-largest known rare earth deposit on land.
China’s partner in that project is Australia’s Energy Transition Minerals. That project, though, hit a wall after Greenland banned uranium mining in 2021. It’s now stuck in court battles.
Ryan Castilloux, who runs the research firm Adamas Intelligence, said that locking in U.S. priority over Greenland’s supply WOULD “ensure that a Chinese partner or somebody else doesn’t come back to the table to develop those resources.”
Trump said at Davos that his plan for Greenland isn’t even about mining. “I want Greenland for security. I don’t want it for anything else,” he told reporters just before meeting with the NATO Secretary General. “We have so much rare earth, we don’t know what to do with it. We don’t need it for anything else.”
Castilloux added that the U.S. supply pipeline is now “full” after the administration made big steps in the past year to get a domestic rare earth network up and running.
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