Trump Admin Invests $1.6B in USA Rare Earth to Counter China/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The U.S. is investing $1.6 billion in USA Rare Earth to reduce dependency on China for critical minerals. The deal includes federal funding and a secured loan to develop a Texas mine and Oklahoma facility. It’s part of a broader effort to boost domestic supply chains.
U.S. Rare Earth Push Quick Looks
- USA Rare Earth receives $1.6 billion in U.S. government investment.
- Funds will support a Texas rare earth mine and Oklahoma magnet facility.
- China processes 90%+ of global critical minerals.
- Commerce Department’s CHIPS program receives shares and purchase rights.
- U.S. aims to secure supply chains for EVs, defense, and tech.
- USA Rare Earth stock jumped 13% pre-market.
- Part of Trump’s broader effort to break China’s mineral dominance.
- Pentagon also invested $400 million in MP Materials.
- Bipartisan lawmakers propose $2.5B agency for rare earth development.
- $5B earmarked through 2029 to grow U.S. mineral supply chains.
Deep Look: Trump Admin Invests $1.6B in USA Rare Earth to Counter China
Washington, D.C. — The Trump administration announced Monday a major federal investment in USA Rare Earth, marking another step in its effort to reduce U.S. dependence on China for critical minerals vital to modern technology and national defense.
The U.S. Commerce Department is investing $1.6 billion in the Oklahoma-based company, which will use the funding to advance a rare earth mine in Texas and build a magnet manufacturing facility in Oklahoma. The initiative is aimed at strengthening America’s domestic supply chain for rare earth elements, crucial for smartphones, electric vehicles, robotics, and defense applications.
As part of the agreement, USA Rare Earth will receive a $1.3 billion senior secured loan and $277 million in direct federal funding through the CHIPS program. In exchange, the government gains 16.1 million common shares and rights to purchase another 17.6 million.
“USA Rare Earth’s project is essential to restoring U.S. critical mineral independence,” said Commerce Secretary Howard Lutnick. “This investment ensures our supply chains are resilient and no longer reliant on foreign nations.”
The investment comes as China continues to dominate the critical minerals market, processing over 90% of the world’s supply. With global tensions high, the U.S. has identified this dependence as a major strategic vulnerability.
In recent years, the Trump administration has ramped up investments in domestic rare earth producers. USA Rare Earth is the third such company to receive government backing in just a few months. In August, the Pentagon provided a $150 million loan to MP Materials, and in November, a $1.4 billion public-private partnership was formed with Vulcan Elements and ReElement Technologies.
The administration’s most recent tax and spending legislation earmarks $2 billion for the Pentagon to boost mineral reserves, with another $5 billion allocated through 2029 for strategic investments in domestic supply chains.
Industry analysts and defense experts have long warned that America’s overreliance on imported critical minerals — which include 17 rare-earth elements out of a list of 50 identified by the U.S. government — represents a national security risk.
Even Trump’s past controversial bid to purchase Greenland was reportedly tied in part to gaining access to rare earth deposits found there, underscoring the administration’s longstanding interest in securing mineral sources.
USA Rare Earth’s expanding role in the domestic industry is key to the Trump administration’s push to decouple American tech and defense industries from foreign supply chains. Based in Stillwater, Oklahoma, the company is expected to spearhead magnet production, an essential component in everything from electric motors to guided missiles.
Lawmakers on both sides of the aisle are also showing increasing support for rare earth independence. A bipartisan proposal introduced earlier this month would create a $2.5 billion federal agency specifically tasked with ramping up rare earth and critical mineral production across the country.
Between 2020 and 2024, the Pentagon has awarded over $439 million in grants and contracts to help build a U.S.-based rare earth supply chain — a strategic investment that is now accelerating.
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