Rare Earth Stocks Jump as U.S. Takes $1.6-Billion Stake in Miner

USA Rare Earth stock has jumped as much as 12% after the miner announced it would receive $1.6 billion from the Department of Commerce in exchange for an equity stake in the company, Ines Ferre reported for Yahoo Finance.

The US stake in USA Rare Earth is part of Washington’s efforts to reduce China’s dominance in rare earth metals. (Photo: USARareEarth X) 

Industry peers MP Materials, Energy Fuels, and Trilogy Metals also jumped in early trading. USA Rare Earth said it entered into a letter of intent with the Department of Commerce, which also includes collaboration with the Department of Energy for a $1.3 billion loan and $277 million in federal funding.

As part of the deal, USA Rare Earth will issue 16.1 million shares of common stock and approximately 17.6 million warrants to the Department of Commerce.

The company also announced a $1.5 billion capital raise.

The new funding is expected to accelerate USA Rare Earth’s mining, processing, and metal-making operations, including its magnet manufacturing plant in Stillwater, Oklahoma, and its Round Top deposit in West Texas, which is expected to begin commercial production in 2028.

The US stake in USA Rare Earth is part of Washington’s efforts to reduce China’s dominance in rare earth metals.

Last year, the Pentagon became MP Materials’ largest shareholder after announcing the purchase of $400 million worth of the producer’s shares. The government also took stakes in Lithium Americas and Trilogy Metals in deals announced last year.