The Trump administration is planning to acquire a 10% equity stake in US rare earth mining company US Rare Earth through a combined debt-and-equity investment valued at approximately US$1.6 billion, according to multiple media reports. The move is aimed at reducing the US's reliance on China for critical minerals while strengthening national security and high-tech supply chains.
The Financial Times, Bloomberg, and Reuters reported, citing sources familiar with the matter, that the US government would receive 16.1 million shares of US Rare Earth along with 17.6 million warrants. The warrants would be exercisable at US$17.17 per share, a price close to recent market levels. As part of the same transaction, the government is expected to provide around US$1.3 billion in senior secured debt under financing mechanisms linked to the CHIPS and Science Act and administered by the Commerce Department.
US Rare Earth is currently working with Texas Mineral Resources to develop a rare earth mining project in Sierra Blanca, Texas, which is expected to begin production in 2028. Separately, the company is preparing to start operations at a magnet manufacturing facility in Stillwater, Oklahoma. Rare-earth magnets are considered critical components for defense systems, EVs, and AI hardware.
The planned investment is viewed as part of Washington's broader effort to localize the rare earth supply chain across mining, processing, and manufacturing. While the US holds rare earth reserves, it has historically depended heavily on China for processing and magnet production, leaving key industries exposed to geopolitical risk.
The reported deal follows earlier US government investments in critical minerals companies, including MP Materials, Lithium Americas, and Trilogy Metals. A White House official was quoted as saying the administration expects to facilitate additional large-scale deals to boost domestic production of lithium, rare earths, and other materials essential for defense and advanced technologies.
US Rare Earth has reportedly engaged Cantor Fitzgerald as a financial adviser for fundraising, a detail that has drawn attention, given the firm's leadership ties to senior government officials.
Article edited by Jack Wu
