The Trump administration is putting $1.6 billion into USA Rare Earth, an Oklahoma-based mining company. The deal gives the government about 10% of the firm.
BREAKING: The Trump administration plans a $1.6 Billion investment in USA Rare Earth $USAR for a 10% stake, per FT.
The stock was up nearly 50% last week
US rare earth supply is now a priority
pic.twitter.com/umzgNNRm59
— Trader Edge (@Pro_Trader_Edge) January 25, 2026
The government will get 16.1 million shares plus warrants for another 17.6 million shares. The warrant price is set at $17.17 per share.
This marks the largest federal investment in the rare earth sector to date. The company also plans to announce a separate $1 billion private funding round.
USA Rare Earth currently has a market value of $3.7 billion. The company focuses on heavy rare earth deposits found in U.S. territory.
The investment comes from a finance facility under the CHIPS and Science Act of 2022. The Commerce Department CHIPS office typically supports domestic chip and equipment projects.
Now rare-earth minerals are being treated as part of the same supply chain as semiconductors and AI hardware. This connects the mining sector directly to tech manufacturing.
USA Rare Earth is building a mine in Sierra Blanca, Texas. The company also plans a magnet production facility in Stillwater, Oklahoma.
Commercial output from these operations should begin in the first half of 2026. The facilities will produce neodymium magnets.
These magnets go into electric vehicle motors, defense equipment, and data center hardware. Tesla uses rare-earth magnets in its EV motors.
The $1.3 billion portion of the deal will come as senior secured debt financing. A Commerce Department official confirmed the transaction was completed directly with the company.
This deal fits a broader strategy from the Trump administration. The government wants to secure critical supply chains for essential resources.
In August 2025, the administration converted CHIPS Act grants into a $5.7 billion equity stake in Intel. That gave the government a 10% stake in the chipmaker.
The administration also bought a 15% stake in MP Materials. Similar deals were struck with Lithium Americas and Trilogy Metals in 2025.
These moves aim to reduce reliance on foreign nations for key resources. China currently dominates global rare earth production and processing.
The Commerce Department and Defense Department worked together on this transaction. Both agencies are focused on boosting domestic rare earth production.
The government’s direct investment may reduce funding risk for mining companies. It could also speed up project timelines for domestic mineral production.
However, federal ownership might bring closer oversight. Companies receiving government investment could face tighter regulations over time.
Chip companies like Nvidia and AMD depend on secure supply chains for AI systems. Intel’s domestic manufacturing plans also benefit from stable mineral access.
The total value of Trump administration investments in strategic industries now exceeds $10 billion. The spending covers steel, minerals, nuclear energy, and semiconductors.
The Commerce Department and USA Rare Earth both declined to comment on the Financial Times report. The White House did not respond to requests for comment.
The post USA Rare Earth (USAR) Stock: U.S. Government Takes 10% Stake for $1.6 Billion appeared first on CoinCentral.
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