USA Rare Earth Secures Major Government Funding

New deal with U.S. Department of Commerce provides $3.1 billion in capital to accelerate rare earth mining and processing.

Published on Feb. 10, 2026

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USA Rare Earth, a mining company focused on rare earth elements, has announced a major new agreement with the U.S. Department of Commerce. The deal provides USA Rare Earth with access to $3.1 billion in capital, including the issuance of 16.1 million shares of common stock and 17.6 million warrants to the government. The company also secured a $1.5 billion private investment. USA Rare Earth plans to use the funds to accelerate the development of its Round Top rare earth deposit in Texas and build out its entire mine-to-magnet supply chain.

Why it matters

Securing a domestic supply of rare earth elements is a strategic priority for the U.S. government, as these materials are critical for defense, electric vehicles, and renewable energy technologies. The investment in USA Rare Earth helps strengthen America's position in the global rare earths market, where China currently dominates production.

The details

Under the agreement, the U.S. Department of Commerce will take a 16.1 million share stake in USA Rare Earth, representing political involvement in the company's future. However, USA Rare Earth's Round Top deposit is considered the "richest known deposit of heavy rare earth elements," giving it strategic importance. The company also secured a $1.5 billion private investment at a discounted share price, resulting in share dilution for existing investors.

  • USA Rare Earth announced the deals in late January 2026.
  • The company plans to begin production at its Round Top mine in Texas in 2028.

The players

USA Rare Earth

A mining company focused on developing rare earth element deposits in the United States, with a focus on the Round Top project in Texas.

U.S. Department of Commerce

The federal agency that has made securing domestic rare earth supplies a strategic priority, leading to its investment in USA Rare Earth.

Inflection Point

The lead investor in a $1.5 billion private placement with USA Rare Earth.

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What they’re saying

“The January announcement is important because it de-risks the company's business model -- USA Rare Earth needs to fund the commercialization of the Round Top deposit in Texas, set to begin production in 2028 -- but it also adds political risk to the company's future via the 16.1 million shares to be issued to the U.S. government.”

— Lee Samaha (Fool.com)

“There's no denying that the mining company is in a much more advantageous position as it now has access to about $3.1 billion in capital. It's essential, however, to recognize that current USA Rare Earth investors have now been subject to share dilution as a result of the recent deals.”

— Scott Levine (Fool.com)

What’s next

USA Rare Earth plans to use the new capital to accelerate the development of its Round Top rare earth deposit and build out its entire domestic supply chain for rare earth elements and magnets.

The takeaway

The U.S. government's investment in USA Rare Earth underscores the strategic importance of securing domestic rare earth supplies to support critical industries like defense, electric vehicles, and renewable energy. While the deal results in some share dilution for existing investors, it positions USA Rare Earth to become a key player in America's rare earths industry.