US Commerce Department to Invest in Rare Earth Company
Under a letter of intent, the department offered $277 million in federal funding along with a $1.3 billion loan from the CHIPS Act. In return, it will receive 16.1 million shares of common stock and 17.6 million warrants from USA Rare Earth, pending final agreements and approvals.
"In conjunction with this announcement, USAR has raised a common stock PIPE in the amount of $1.5 billion anchored by Inflection Point with participation from large mutual fund complexes," the company said.
Commerce Secretary Howard Lutnick highlighted the strategic importance of the project, stating, "USA Rare Earth's heavy critical minerals project is essential to restoring U.S. critical mineral independence. This investment ensures our supply chains are resilient and no longer reliant on foreign nations."
Following the announcement, USA Rare Earth shares jumped more than 16% in premarket trading.
The funding will support the company’s plans to develop a mine at the Round Top rare earth deposit in Texas and a magnet production facility in Stillwater, Oklahoma. This initiative aligns with efforts to reduce dependence on China by building a Western supply chain for critical minerals and rare earths, a priority of the administration’s industrial policy.
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