USA Rare Earth shares surge on $1.6 billion U.S. funding proposal

Workers use machinery to dig at a rare earth mine. (AP Photo, File)

Shares of USA Rare Earth jumped more than 30 per cent before the bell on Monday as the miner unveiled a proposal for US$1.6 billion in funding from the U.S. Department of Commerce.

The announcement followed a Reuters report over the weekend that the Trump administration was taking a 10 per cent stake in the miner as part of the debt-and-equity investment package.

The move is the latest by Washington to deepen its presence in critical minerals, after last year’s equity stakes in MP Materials, Lithium Americas and Trilogy Metals.

USA Rare Earth said the letter of intent for the deal includes $277 million in proposed federal funding and $1.3 billion in a proposed senior secured loan under the CHIPS Act.

The miner also said it had raised a private investment in public equity (PIPE) for $1.5 billion, anchored by Inflection Point. The PIPE deal, along with the proposed government investment, would bring the total amount to $3.1 billion.

USA Rare Earth has been developing a mine in Sierra Blanca, Texas, with Texas Mineral Resources, that is slated to open by 2028. It has a magnet manufacturing facility in Stillwater, Oklahoma, which is expected to launch later this year.

A senior Trump official said last month the administration was planning more “historic deals” with the U.S. mining sector.

Rare earths, a group of 17 elements, or the magnets which they are sometimes made into are used in everything from iPhones and washing machines to F-35 fighter jets, as well as in electric vehicles, medical equipment and military systems.

Shares of rare earths miners surged in 2025, driven by tightening global supplies and a worldwide race to secure the critical mineral resource to curb reliance on China.

Trump’s recent gambit of buying resources-rich Greenland further fueled gains in rare earths stocks this year.

Shares of USA Rare Earth were last up 20.5 per cent before the bell, positioning the stock to build on its more than 100 per cent jump so far in January.

U.S.-listed shares of Trilogy Metals, Lithium Americas and MP Materials also rose between three per cent and eight per cent.

(Reporting by Shashwat Chauhan and Vallari Srivastava in Bengaluru; Editing by Shilpi Majumdar and Devika Syamnath)