USA Rare Earth Announces Letter of Intent with the U.S. Government for Access to $1.6 Billion in Funding to Accelerate the Domestic Heavy Rare Earth Value Chain. Concurrently, USA Rare Earth Raises $1.5 Billion in Private Sector Investment.

Core Insights - USA Rare Earth, Inc. has entered a non-binding Letter of Intent (LOI) with the U.S. Department of Commerce, proposing a total of $1.6 billion in funding, which includes $277 million in federal funding and a $1.3 billion senior secured loan under the CHIPS Act [1][9] - The transaction aims to establish the largest domestic production of heavy rare earth elements and critical minerals by 2030, enhancing U.S. national security and competitiveness [1][2] - The collaboration will secure domestic access to 12 of the U.S. government's top 30 essential critical minerals and rare earth elements, which are currently unavailable outside of China [1][5] Funding and Financial Overview - The proposed funding and loan will support USA Rare Earth's growth objectives across mining, processing, metal-making, and magnet manufacturing [3][6] - The company has raised $1.5 billion through a common stock PIPE transaction, bringing the total capital to $3.1 billion when combined with the proposed government funding [9] - The PIPE transaction involves the issuance of 69.8 million shares at $21.50 per share, expected to close on January 28, 2026, subject to customary closing conditions [9] Strategic Importance and Goals - The LOI reflects the strategic importance of USA Rare Earth's mine-to-magnet platform in closing the supply gap for rare earth elements and critical minerals essential for U.S. national security [2][5] - The company plans to extract 40,000 metric tons per day of rare earth and critical mineral feedstock from its Round Top deposit, with commercial production expected to begin in 2028 [4] - The project aims to increase neodymium-iron-boron magnet-making capacity to 10,000 metric tons per annum, more than doubling previous plans [4] Collaboration with U.S. Government - The U.S. Department of Energy will collaborate with USA Rare Earth to advance heavy rare earth element separation technologies, leveraging digital twin technology [5][6] - This partnership aims to establish the first fully domestic mine-to-magnet supply chain, reducing reliance on foreign sources of critical minerals [5][6] - The collaboration is seen as a transformative step in securing and growing a resilient domestic rare earth value chain [3][5]