Shares in USA Rare Earth (NASDAQ:USAR) surged about 50% after reports said the Trump administration is preparing to invest $1.6 billion in the Oklahoma-based rare earths producer, in what would be the largest federal commitment yet to the U.S. critical minerals industry.
According to the Financial Times, the investment would leave the U.S. government with a 10% ownership stake in USA Rare Earth, which controls sizeable domestic deposits of heavy rare earth elements. Under the proposed terms, Washington would receive 16.1 million shares priced at $17.17 each, alongside warrants for a further 17.6 million shares at the same exercise price.
The government’s equity outlay of $277 million implies a paper gain of roughly $490 million at the current share price of $24.77. The deal underscores a broader push by policymakers to reinforce U.S. supply chains for strategically important minerals.
In addition, a separate $1 billion private funding round is expected to be unveiled alongside the government investment on Monday, further strengthening the company’s balance sheet.
The sharp rally in the stock highlights strong investor support for increased federal involvement in domestic rare earth production, an area that has taken on greater strategic importance as the United States looks to cut its reliance on overseas suppliers.