US Government Approves $1.6B Funding for USA Rare Earth
On 26 January 2026, the USA Rare Earth (NSDQ: USAR) announced that the US Government will invest USD 1.6 billion in the company as part of its efforts to secure and diversify #RareEarths. In return, the US Government will get a 10% stake in the venture.
The funding comes under the #CHIPSAct. In addition to a bonified loan of USD 1.3 billion, the Commerce Department will also chip in USD 277 million, bringing the total funding to nearly USD 1.6 billion. “This investment ensures our supply chains are resilient and no longer reliant on foreign nations,” commented Commerce Secretary Howard Lutnick.
USA Rare Earth holds mining rights in one of the largest known heavy rare earths deposits in North America. The mine is located at the Round Top Mountain in Sierra Blanca, in the western side of the state of Texas, some 80 kilometers from El Paso. Based on exploration, the mine holds high concentrations of dysprosium, terbium, and yttrium, which are essential for semiconductor and aerospace applications, both civil and military. In addition, the mine holds substantial reserves of other #CriticalMinerals such as beryllium, gallium, lithium, and zirconium.
USA Rare Earth is a vertically integrated company and is involved across the value chain from extraction, processing to the production of magnets. The company calls it the ‘mine-to-magnet’ strategy in order to build alternative value chains outside the grip of China.
During 2025, the US Government has also invested in MP Materials and Vulcan Elements to beef up domestic capability in Rare Earth Elements (REE). Trump also declared that he has managed to reach a framework agreement over #CriticalMinerals with Greenland.
As a condition for the federal funding, USA Rare Earth has had to secure private financing. Therefore, it successfully raised USD 500 million on the capital market. The share price of USA Rare Earth rose by 15% at the closing bell on the day of the announcement.
On 12 January 2026, US Treasury Secretary Scott Bessent held a meeting focusing on investment de-risking and price floors for Critical Minerals. Now, US State Secretary Marco Rubio is hosting a Critical Minerals Ministerial (CMM) in Washington, DC, scheduled for the 4th of February, 2026.
So far, representatives from 50 countries have confirmed their attendance. In addition to high-level delegations from G7, Indian External Affairs Minister Subrahmanyam Jaishankar, South Korean Foreign Minister CHO Hyun, and Singaporean Foreign Minister Vivian Balakrishnan are also participating. The agenda includes the creation of a strategic stockpile codenamed ‘Project Vault’ and the reinforcement of the Minerals Security Partnership (#MSP).