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.
LOI from the Department of Commerce's CHIPS Program Includes Proposed $277 Million of Federal Funding and a $1.3 Billion Senior Secured Loan from the CHIPS Act
By 2030, Transaction Enables Largest Domestic Heavy Rare Earth, Critical Mineral, Metal, and Magnet Production to Support U.S. Semiconductor, Defense, Energy, and Other Major Industries
Significantly Bolsters U.S. National Security and Competitiveness by Developing Essential Domestic Supply of Critical Minerals, Metals, and Magnets Currently Unavailable Outside China
Secures Domestic Access to 12 of the U.S. Government's Top 30 Most Essential Critical Minerals and Rare Earth Elements
STILLWATER, Okla., Jan. 26, 2026 (GLOBE NEWSWIRE) -- USA Rare Earth, Inc. (NASDAQ:USAR) (USAR or the Company) today announced its entry into a non-binding Letter of Intent (the LOI) with the U.S. Department of Commerce and a collaboration with the U.S. Department of Energy (DOE). The Department of Commerce's CHIPS Program has provided an LOI covering a total of $1.6 billion, including $277 million in proposed federal funding and $1.3 billion in a proposed senior secured loan under the CHIPS Act. In conjunction with this announcement, USAR has raised a common stock PIPE in the amount of $1.5 billion anchored by Inflection Point with participation from large mutual fund complexes.
The LOI with the U.S. Government reflects the strategic importance of USAR's mine-to-magnet platform and its role in closing the rare earth element and critical mineral supply gap for essential industries that underpin U.S. national security, including semiconductors, other critical technologies, and advanced manufacturing. The LOI is subject to further diligence, finalization of agreements, customary closing conditions, and approvals.
This capital is expected to accelerate and de-risk USAR's growth objectives across mining, processing, metal-making and magnet manufacturing, and supports a business that by 2030 will:
Extract 40,000 metric tons per day of rare earth and critical mineral feedstock from USAR's Round Top deposit, which is expected to begin commercial production in 2028;
Process a combined 8,000 metric tons per annum (tpa) of third-party MREC and heavy rare earth elements (HREEs) and critical mineral oxides and concentrates at Round Top, including dysprosium (Dy), terbium (Tb), yttrium (Y), gadolinium (Gd), hafnium (Hf), erbium (Er), thulium (Tm), lutetium (Lu), ytterbium (Yb), holmium (Ho), gallium (Ga), and zirconium (Zr), all essential to semiconductors, aerospace, defense and energy production, and largely unavailable domestically;
Reshore 10,000 tpa of heavy rare earth element (heavy REE) metal- and alloy-making and strip-casting capacity, capabilities that do not currently exist in the U.S., through the top-tier expertise of our subsidiary Less Common Metals Ltd. (LCM);
Increase neodymium-iron-boron (NdFeB) magnet-making capacity to 10,000 tpa, more than double previously planned capacity; and
Process 2,000 tpa of swarf resulting from our NdFeB magnet production.
"This landmark collaboration with the U.S. Government represents a transformative step in USAR's mission to secure and grow a resilient, independent domestic rare earth value chain," said Barbara Humpton, Chief Executive Officer of USA Rare Earth. "We are grateful to President Trump, Secretary Lutnick, and Secretary Wright for their support and recognition of the strategic importance of rare earth materials and permanent magnets. With this unprecedented show of public and private support for our Company, we are positioned to accelerate the build-out of important domestic capabilities that are essential to U.S. national security, global economic competitiveness, and critical technologies of the future."
"This transformational collaboration with Department of Commerce and the proposed $1.6 billion of CHIPS Act funding, along with $1.5 billion of private sector financial and strategic capital, will help secure the heavy rare earth supply chain for the U.S. and its allies and underscores USAR's strategic nature in support of national and economic security," said Michael Blitzer, Chairman of the Board of USA Rare Earth and Chairman and CEO of Inflection Point. "USAR and the Department of Commerce will mobilize a multi-year partnership at unprecedented scale and speed to build out capacity across heavy rare earth feedstock, processing, metal, and magnets, and we are proud to partner with the U.S. Government in support of the Company's next phase of growth. We look forward to successfully implementing this ambitious plan with the goal of generating substantial financial returns for our shareholders."
"USA Rare Earth's heavy critical minerals project is essential to restoring U.S. critical mineral independence," said Secretary of Commerce Howard Lutnick. "This investment ensures our supply chains are resilient and no longer reliant on foreign nations."
In addition to the collaboration with the Department of Commerce, the U.S. Department of Energy's National Energy Technology Laboratory has signed a LOI to collaborate with USAR to advance heavy REE separation technologies at the Company's Wheat Ridge lab and Round Top deposit, leveraging digital twin technology. Under the Trump administration, the DOE has prioritized innovation in process modeling, the use of digital twins, and the deployment of testbeds for material-processing R&D. Through this partnership, the DOE will contribute to the development of digital twins to advance rare earth element separation technologies, with the ultimate goal of establishing the country's first fully domestic mine-to-magnet supply chain.
"Thanks to President Trump's leadership, the Department of Energy is ending America's reliance on foreign nations for the critical materials essential to our economy and national security," said U.S. Energy Secretary Chris Wright. "The DOE is partnering with USAR to rebuild the critical minerals supply chain. By expanding domestic mining, processing, and manufacturing capabilities, we are creating good-paying American jobs and safeguarding our national security."
"Accelerating the onshoring of rare earth minerals, metals, and magnets is paramount to national and economic security," said the Executive Director of the U.S. Investment Accelerator, Michael Grimes. "With the Department of Commerce's funding for USA Rare Earth's vertically integrated mine-to-magnet operations, we will significantly increase the domestic supply of crucial components for semiconductors, defense, and numerous other industries strategic to the United States."
"The CHIPS Program's proposed $277 ...
