USA Rare Earth Receives $1.6B Federal Backing for Texas Mine, Oklahoma Facility

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USA Rare Earth, a mining startup, controls one of the largest rare earth deposits in the U.S. located at Round Top Mountain in Texas. The company plans to process materials from this site into permanent magnets, a key component for electric vehicles, fighter jets, wind turbines, and other high-tech products. In early 2026, the Trump administration announced it would take a 10% stake in USA Rare Earth through a $1.6 billion deal to help fund the development of the Round Top mine and a magnet manufacturing facility in Oklahoma.

Why it matters

The majority of permanent magnets are currently produced in China, creating a supply chain vulnerability for the U.S. By investing in USA Rare Earth, the federal government aims to establish domestic production of these critical materials and reduce American reliance on foreign sources.

The details

USA Rare Earth's Round Top deposit contains 15 of the 17 rare earth elements, including significant lithium reserves. The $1.6 billion federal investment will be used to build the company's mine in Texas and magnet manufacturing plant in Oklahoma. This funding is seen as crucial for USA Rare Earth to compete with China's dominance in permanent magnet production.

• In early 2026, the Trump administration announced the $1.6 billion investment deal.
• USA Rare Earth plans to develop its Round Top mine in Texas and a magnet manufacturing facility in Oklahoma using the federal funding.

What’s next

USA Rare Earth will use the $1.6 billion in federal funding to build its mine in Texas and magnet manufacturing facility in Oklahoma, with the goal of establishing domestic production of these critical materials.