The federal government will give $277 million in funding and $1.3 billion in a loan to USA Rare Earth (USAR) in a deal announced Monday.
The Department of Commerce will also get 16 million shares in the company. The agreement is expected to be finalized this financial quarter.
Secretary of Commerce Howard Lutnick said in a news release the deal will help the U.S. become independent of other nations in its mineral supply. China is currently the primary producer of rare earth minerals.
"This investment ensures our supply chains are resilient and no longer reliant on foreign nations,” he said.
USAR expects to use the money to speed up its plans to meet several goals over the next few years. The company wants to begin its mining operation at a mountain in West Texas in 2028, with intentions to eventually extract 40,000 tons of rare earth materials every day.
The company has mining rights to Round Top Mountain, which is about 85 miles southeast of El Paso. Experts have been investigating the mountain’s rare earth mineral supply since the 1980s, according to nonprofit newsroom El Paso Matters, but no commercial mining has taken place.
USAR will develop magnets from the minerals that can be used in technology like electric vehicles, wind turbines and other products. In January 2025, the company announced it had developed an initial batch of magnets at its plant in Stillwater.
In an interview with CNBC, USAR CEO Barbara Humpton said the Trump administration wants the company to move quickly on extracting and manufacturing rare earth elements.
“The government is taking an economic interest in the business, not a governance interest,” she told CNBC.
The company declined to answer questions from StateImpact about how the deal will impact Oklahoma economically.
In USAR’s announcement, U.S. Secretary Chris Wright said the Department of Energy is ending the country’s reliance on other nations for critical materials with the help of the president.
“By expanding domestic mining, processing, and manufacturing capabilities, we are creating good-paying American jobs and safeguarding our national security,” he said.
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