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$1.6 billion boost for rare earths: USA Rare Earth secures major funding

New federal and private investment aims to strengthen America’s rare-earth supply chain.

Washington, D.C., United States, 27 January 2026- USA Rare Earth has received a major financial boost as the U.S. federal government moves to support domestic production of rare-earth minerals. The company said it has received a non-binding letter of intent from the U.S. Department of Commerce outlining up to $1.6 billion in proposed funding.

The proposed support includes a $1.3 billion senior secured loan through the Commerce Department’s CHIPS Program, along with an additional $277 million in potential federal funding. Following the announcement, shares of USA Rare Earth rose sharply in early trading.

As part of the proposed agreement, USA Rare Earth would issue 16.1 million shares to the Commerce Department and provide around 17.6 million warrants. The company said the funding would help advance its large-scale rare-earth development plans in the United States.

Rare-earth minerals are critical materials used in products such as electric vehicles, wind turbines, consumer electronics, advanced magnets, and defense-related technologies. Currently, much of the global supply is sourced from outside the U.S., making supply chains vulnerable to disruptions.

The investment in USA Rare Earth follows a series of similar efforts to expand domestic rare-earth capabilities. In late 2025, Vulcan Elements received federal loans and funding to support the construction of a U.S.-based magnet manufacturing facility. The government has also taken equity positions in MP Materials, the country’s largest rare-earth miner.

Industry activity has increased after restrictions on rare-earth exports from China earlier this year highlighted the importance of building reliable domestic supply sources. These developments have pushed both government agencies and manufacturers to seek alternatives that reduce reliance on overseas materials.

In addition to federal support, USA Rare Earth said it has raised $1.5 billion through a private investment in public equity, led by Inflection Point. The company said this combined public and private funding will help reduce financial risk, support long-term growth, and strengthen U.S.-based rare-earth production.

USA Rare Earth also announced a new letter of intent with the Energy Department’s National Energy Technology Laboratory. Under this agreement, the laboratory will help develop digital twin technology to improve the company’s rare-earth separation processes, potentially increasing efficiency and lowering costs.

The company released preliminary financial results for 2025, forecasting operating expenses and operating losses between $56 million and $62 million. Capital spending for the year is expected to range from $37 million to $43 million, reflecting ongoing investment in infrastructure and technology.

With fresh capital, new partnerships, and continued research support, USA Rare Earth aims to play a key role in building a stronger and more resilient rare-earth supply chain in the United States.