Investing in rare earth metals: The United States is investing $1.6 billion in the industry

The Trump administration is preparing to announce the largest financial involvement of the federal government in a private rare earth mining company in recent years. According to the Financial Times, the government intends to invest $1.6 billion in USA Rare Earth, receiving approximately 10% of its shares and securing a stake in the future production of critical materials. An official announcement regarding this package and related private transactions is expected on January 26.

Under the terms of the agreement, the U.S. government will receive 16.1 million shares of USA Rare Earth and warrants for an additional 17.6 million shares at a price of $17.17 per share. Additionally, the company will receive approximately $1.3 billion in senior secured debt at market prices, providing significant funding for its ongoing projects.

The package also includes independent private funding of approximately $1 billion, making the total investment in the company a record for this segment in the United States.

USA Rare Earth, founded in 2019 and based in Oklahoma, specializes in the extraction and processing of rare earths, as well as the production of permanent magnets based on them. These materials form the basis of modern technologies, from electric vehicles and wind turbines to complex defense systems and microelectronics. The company is developing the Round Top mine in Texas and building magnet manufacturing plants in Oklahoma; it plans to start commercial production in the first half of 2026.$BTC