The Trump administration is set to acquire a 10 per cent stake in USA Rare Earth as part of a $1.6 billion investment package, signalling Washington’s growing willingness to deploy state capital to counter China’s dominance in rare earth processing and secure supply chains vital for defence, artificial intelligence and clean energy technologies
The Trump administration is set to take a 10 per cent equity stake in USA Rare Earth as part of a $1.6 billion debt-and-equity investment package, in its latest move to shore up America’s fragile supply chain for critical minerals, Reuters reported on Saturday, citing sources familiar with the matter.
The deal, expected to be announced on Monday, will see the US directly invest in the Oklahoma-based rare earths producer, alongside a separate $1 billion private investment. USA Rare Earth plans to host a conference call with investors to outline the terms, the report said.
If finalised, the transaction would mark another instance of the US government taking an ownership position in a mining company, reflecting how strategic rare earths have become in the intensifying geopolitical and technological rivalry with China.
A strategic minerals play
Rare earths, a group of 17 elements used in everything from smartphones and electric vehicles to missile guidance systems and fighter jets, are dominated by China, which controls the bulk of global processing capacity. While the US has some production, it remains heavily dependent on foreign supply chains, a vulnerability that has alarmed policymakers across administrations.
The proposed investment in USA Rare Earth is aimed at accelerating the development of a domestic rare earth mine and a magnet manufacturing facility, both seen as critical to reducing reliance on Chinese imports.
USA Rare Earth is developing a mine at Sierra Blanca in Texas in partnership with Texas Mineral Resources, with production targeted for 2028. The company is also building a magnet manufacturing facility in Stillwater, Oklahoma, which is expected to begin operations later this year.
Permanent magnets made from rare earths are essential for electric motors, wind turbines, military hardware and advanced electronics, making them a strategic chokepoint in global supply chains.
Deal structure and valuation
According to the report, the US government will receive 16.1 million shares in USA Rare Earth, along with warrants for an additional 17.6 million shares. Both will be priced at $17.17 per share, roughly in line with where the company’s stock traded earlier this month.
A pattern of state-backed mining bets
The USA Rare Earth stake follows a string of similar moves by the Trump administration into the critical minerals sector. Over the past year, Washington has taken equity positions in companies including MP Materials, Lithium Americas and Trilogy Metals, signalling a more interventionist approach to securing raw materials deemed vital for national security and industrial competitiveness.
A senior administration official told Reuters last month that more “historic deals” with US mining companies were in the pipeline, particularly in lithium, rare earths and other inputs crucial for defence systems, artificial intelligence and next-generation technologies.
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