The Trump administration has moved to strengthen domestic supply chains for critical minerals by agreeing to acquire a 10 per cent stake in USA Rare Earth in a deal valued at $1.6 billion, according to media reports.
The investment is part of a broader push to expand US-based rare earth mining and processing, reduce dependence on China, and secure materials vital for defence, clean energy, electric vehicles and advanced electronics.
Under the proposed arrangement, the US government will receive equity and warrants in USA Rare Earth, alongside providing significant debt financing. Reports indicate that the funding package includes about $1.3 billion in federal loans, with the remaining amount coming through direct equity participation. The financing is expected to be supported by federal programmes aimed at strengthening strategic industries.
USA Rare Earth is developing a rare earth mine at Sierra Blanca in Texas, in partnership with Texas Mineral Resources. The project is expected to begin production by 2028 and will focus on heavy rare earth elements, which are especially important for defence and high-performance technologies.
In parallel, the company is setting up a magnet manufacturing facility in Stillwater, Oklahoma, scheduled to start operations later this year. The plant will produce permanent magnets used in electric motors, wind turbines, military equipment and consumer electronics. Together, the mine and magnet facility are designed to create a fully domestic “mine-to-magnet” supply chain.
Rare earth elements consist of 17 minerals that are critical to modern technology but are largely processed and refined in China, which currently dominates global supply. US officials have repeatedly warned that this concentration poses economic and national security risks.
The investment in USA Rare Earth marks one of the largest federal interventions in the rare earth sector so far. It follows similar government actions aimed at supporting critical mineral producers and ensuring long-term supply security.
