US to invest $1.6 billion in USA Rare Earth in push to shore up critical minerals supply

The Trump administration is preparing a $1.6 billion investment package in USA Rare Earth, a move framed as the government’s largest effort to strengthen domestic production of rare earth materials used across national security, advanced manufacturing, and semiconductor supply chains. The Financial Times reported the government would take a 10% equity stake as part of the deal. ([ft.com](https://www.ft.com/content/0a337dc3-5a12-4c82-87b5-f2340378006c?utm_source=openai))

According to the report, the structure combines direct ownership with substantial financing support, including senior secured loans linked to the CHIPS and Science Act. The package reflects a broader strategy in which Washington is willing to use capital and policy tools to reduce reliance on foreign supply—particularly in markets where processing and magnet manufacturing are concentrated outside the United States. ([ft.com](https://www.ft.com/content/0a337dc3-5a12-4c82-87b5-f2340378006c?utm_source=openai))

USA Rare Earth, valued in the report at about $3.7 billion, is developing a rare earth mine in Texas and a magnet manufacturing facility in Oklahoma. Magnets are a key bottleneck in the supply chain because even when raw materials are available, the ability to convert them into high-performance components often determines who controls downstream industrial capacity. ([ft.com](https://www.ft.com/content/0a337dc3-5a12-4c82-87b5-f2340378006c?utm_source=openai))

The Financial Times said the government investment is contingent on the company securing at least $500 million in private funding. That condition suggests the administration wants to anchor the project with public backing while still requiring market validation and additional capital from investors, limiting the risk that a strategically important project becomes purely state-financed. ([ft.com](https://www.ft.com/content/0a337dc3-5a12-4c82-87b5-f2340378006c?utm_source=openai))

The deal fits an emerging pattern of more hands-on industrial policy, where government participation extends beyond regulation into targeted financing and stakes in companies viewed as critical to strategic autonomy. With rare earths essential to defense systems, EVs, and electronics, the scale of this package signals that critical minerals policy is moving from long-term planning into near-term execution. ([ft.com](https://www.ft.com/content/0a337dc3-5a12-4c82-87b5-f2340378006c?utm_source=openai))