Trump administration takes stake in USA Rare Earth in $1.6 billion investment push
The U.S. Commerce Department is investing $1.6 billion in USA Rare Earth to support a Texas mine and an Oklahoma magnet facility, part of a broader effort to reduce reliance on China for critical minerals and manufacturing inputs.
The Trump administration is deepening its effort to build domestic supply chains for critical minerals, announcing that the U.S. Commerce Department will invest $1.6 billion in USA Rare Earth to advance a rare earth mine in Texas and build a magnet manufacturing facility in Oklahoma.
The arrangement, tied to the Commerce Department’s CHIPS program, includes $277 million in proposed federal funding and a $1.3 billion senior secured loan. In exchange, the government is set to receive equity in the company—common shares and rights to buy additional shares—reflecting Washington’s growing willingness to use direct financial leverage to develop strategic industrial capacity.
Officials framed the deal as a national security and competitiveness move. Rare earths and related critical minerals are used in everything from semiconductors and robotics to electric vehicles, drones, and advanced defense systems. U.S. dependence on China for processing and manufacturing has long been cited by lawmakers and analysts as a major vulnerability.
USA Rare Earth, headquartered in Stillwater, Oklahoma, becomes the latest in a series of domestic operators to receive federal backing. The administration has also supported other projects aimed at expanding mining and processing capacity, signaling a broader industrial policy push that blends loans, grants, and equity-like positions.
Supporters argue the investment is necessary because building a mine-to-magnet supply chain is capital-intensive and takes years, and that market forces alone have struggled to compete with China’s scale and pricing power. Critics warn that government stakes can distort incentives, and that taxpayer exposure should be carefully limited with clear performance milestones.
For the company and its investors, the federal backing is expected to accelerate construction timelines and improve access to private financing. For Washington, the wager is that expanded domestic production and manufacturing will reduce risk from export controls and geopolitical shocks, while anchoring U.S. high-tech and defense industries with more secure inputs.