U.S. plans $1.6 billion package for USA Rare Earth in push to cut China dependence, Reuters reports

A deal aimed at reshaping critical-minerals supply

The United States is planning to inject $1.6 billion into Oklahoma-based miner USA Rare Earth and take a 10% stake in the company, Reuters reported, citing a Financial Times story that referenced people familiar with the matter. The move underscores Washington’s growing focus on rare earths and other strategic materials amid heightened geopolitical competition and persistent reliance on China-dominated processing.

Under the reported terms, the government would receive 16.1 million shares and warrants for an additional 17.6 million shares, both priced at $17.17. The report said the government package would be paired with a separate $1 billion private financing round slated to be announced alongside the federal investment.

Market reaction and what USA Rare Earth is building

Shares of USA Rare Earth jumped sharply in premarket trading following the reports, reflecting investor expectations that federal backing could accelerate projects and reduce financing risk. Reuters also noted the company has been developing a rare earth mine in Sierra Blanca, Texas, and has a magnet manufacturing facility in Stillwater, Oklahoma, expected to launch later this year.

Rare earth magnets are used in defense systems, electric motors, and many modern electronics. Policymakers have argued that building domestic mining, processing, and magnet-making capacity is a national-security priority—particularly as China has used its role in minerals and processing as leverage in trade disputes.

A broader U.S. strategy

The reported USA Rare Earth move fits a larger pattern of Washington supporting domestic supply chains through loans, grants, and equity stakes. Reuters described the investment as part of a wider critical-minerals push meant to increase U.S. production of lithium, rare earths, and other defense-relevant inputs and to reduce vulnerability to external supply shocks.

If finalized as described, the package would mark another significant step in the U.S. effort to move from raw-material ambition to industrial-scale output—an effort that also depends on permitting timelines, processing technology, and long-term customer contracts.