The Trump administration will acquire a 10% stake in the American rare earth company, involving an investment of $1.6 billion

According to a report by Reuters on the 26th, the Trump administration is acquiring a 10% stake in the American rare earth company USA Rare Earth through a $1.6 billion debt and equity investment plan, marking Washington's latest effort to promote domestic production of critical minerals.

According to two insiders, the deal will be officially announced on Monday, and USA Rare Earth, headquartered in Oklahoma, will hold an investor conference call that morning to discuss the terms of the deal. The funds will be used to help the company develop domestic mines and magnet manufacturing facilities.

In addition, USA Rare Earth will also receive $1 billion in private investment. This is another significant investment in the critical minerals sector by the Trump administration, following last year's investments in MP Materials, Lithium Americas, and Trilogy Metals.

Details of Government Equity Investment Revealed

According to insiders, as part of the investment, the U.S. government will receive 16.1 million shares of USA Rare Earth, along with an additional 17.6 million warrants. Both are priced at $17.17 per share, close to the company's stock price earlier this month.

USA Rare Earth is currently collaborating with Texas Mineral Resources to develop a mine in Sierra Blanca, Texas, which is planned to be operational by 2028. The company also has a magnet manufacturing facility in Stillwater, Oklahoma, which is expected to start operations later this year.

Rare earths are a group of minerals containing 17 elements, widely used in the manufacturing of electronic products and military equipment. The U.S. currently produces only a small amount of rare earths, prompting Washington to vigorously promote increased domestic output in recent years.

Ongoing Advancement of Critical Minerals Strategy

This deal is the latest move by the Trump administration to enter the critical minerals sector. Last year, the administration made equity investments in MP Materials, Lithium Americas, and Trilogy Metals.

A senior Trump administration official stated last month that the government plans to reach more "historic deals" with the U.S. mining sector to increase the production of lithium, rare earths, and other critical minerals used in defense, artificial intelligence, and related fields.

According to an insider, USA Rare Earth has hired the financial services firm Cantor Fitzgerald to assist with fundraising efforts. The firm is chaired by Brandon Lutnick, son of U.S. Secretary of Commerce Howard Lutnick