USA Rare Earth shares jumped after the company said the US government plans to support a $1.6 billion funding package aimed at building a domestic rare earth supply chain — from mining in Texas to manufacturing magnets in Oklahoma.
The package includes federal funding, a large government-backed loan, and an equity stake, as Washington ramps up efforts to reduce reliance on China for rare earth processing and high-performance magnets used in defense systems, electric vehicles, and advanced electronics.
Officials said the project would help strengthen supply security for industries considered strategic, especially as global competition over critical minerals intensifies. Rare earth magnets are a major bottleneck for the United States, since China dominates processing and magnet production capacity worldwide.
The announcement is part of a broader wave of government deals supporting domestic mining and industrial processing, with Washington increasingly willing to take direct positions in critical minerals companies rather than relying only on grants and incentives.
USA Rare Earth said the funding would accelerate development of its heavy rare earth value chain, helping it scale up production and compete in a market where supply concentration has become a national security concern.