US EditionUS Invests $1.6B in USA Rare Earth
The U.S. government’s $1.6 billion investment includes $1.3 billion in senior secured loans and a 10% equity stake to build a domestic rare earth supply chain, reducing China dependence.
- The Financial Times reported on Saturday that the United States government will inject $1.6 billion into USA Rare Earth for a 10% stake, with the investment and a separate $1 billion financing expected on Monday.
- To reduce reliance on China, officials say the administration aims to establish a sovereign 'mine-to-magnet' supply chain securing materials for defense and high-tech industries.
- The financing package includes $1.3 billion in senior secured debt from a Department of Commerce CHIPS finance facility; the government receives 16.1 million shares and 17.6 million warrants at $17.17.
- The investment forms part of broader government equity interventions that may affect investors and market valuations, while it could accelerate U.S. production of rare-earth magnets vital to the U.S. defense sector, electric vehicle and renewable energy industries.
- The move follows prior government stakes such as a roughly six-month-old MP Materials position and CHIPS Act signals last December, with USA Rare Earth expanding via Less Common Metals and the Stillwater, Oklahoma facility.
124 Articles
124 Articles
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USA Rare Earth said on Jan. 26 that it had entered into a non-binding letter of intent with the Department of Commerce for a $1.6 billion financing agreement that includes a $1.3 billion secured loan and $277 million in federal funding. In addition to the loan package, issued under the Department of Commerce’s CHIPS program, USA Rare Earth said it had raised an additional $1.5 billion in private equity funding anchored by Inflection Point that’s…
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