U.S. Government Takes 10% Stake in USA Rare Earth for $1.6 Billion

The TRUMP administration has committed $1.6 billion to acquire a 10% stake in USA Rare Earth (USAR), marking the largest federal investment in the rare earth sector to date. The deal, structured through shares and warrants priced at $17.17 per share, aligns with the CHIPS Act's focus on securing critical mineral supply chains for semiconductors and AI hardware.

USA Rare Earth, valued at $3.7 billion, is developing a Texas mine and Oklahoma magnet plant set to begin production in early 2026. The company's neodymium magnets are vital for electric vehicles, defense systems, and data center infrastructure. This investment follows similar 2025 stakes in MP Materials, Lithium Americas, and Trilogy Metals.

The stock surged nearly 50% last week as the market anticipates a separate $1 billion private funding round. Rare earth supply chain security has become a national priority, with the U.S. moving decisively to reduce dependence on foreign mineral sources.