Mine-to-magnet supply chain in focus.
Over the weekend, unofficial news made rounds that the U.S. government was preparing to take an equity stake in USA Rare Earth. Following MP Materials in summer 2025, this would mark the second federal engagement in a domestic rare earths company. On Monday, this speculation was confirmed through a letter of intent between USA Rare Earth and the U.S. Department of Commerce.
The agreement outlines up to $277 million in potential government grants, along with a $1.3 billion loan that could be financed through the CHIPS and Science Act. In return, the Department of Commerce will receive 16.1 million shares in the company. USA Rare Earth also announced that it has raised an additional $1.5 billion in private capital through the issuance of new shares. The combined funding is intended to support the development of a fully domestic mine-to-magnet supply chain, including the construction of a U.S.-based rare earth mine and downstream manufacturing capabilities for permanent magnets.
Feedstock will be sourced from the Round Top deposit in Texas, where the company has already conducted pilot-scale processing of extracted materials. A pilot operation at Round Top could commence later this year, with commercial production targeted for late 2028. In September of last year, USA Rare Earth strengthened its downstream expertise through the acquisition of Less Common Metals, a UK-based specialist in rare earth metals and alloys. Further technological advancement, particularly in the separation of heavy rare earth elements, is being pursued under a separate agreement with the U.S. Department of Energy, as noted in the company’s press release. Unlike the agreement between the Pentagon and MP Materials, the current deal does not include price guarantees for rare earth products.
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