With regards to the deal, sources close to this transaction have confirmed that the Trump administration will be acquiring a 10 per cent share in USA Rare Earth and will be investing $1.6 billion in the form of debt and equity into the company, which will enable it to build both a mine and a processing plant located in America.
The deal, along with an additional US$1 billion private investment, will be disclosed on Monday; USA Rare Earth will hold a conference call with its investors on a morning basis to explain the terms of the deal, according to one source who was briefed about the deal. The White House has not responded to the request from Reuters for comments. USA Rare Earth did not comment on this topic.
China is the largest producer of rare earths globally, with a total of 17 rare earths that are used in the production of various types of military and electronic equipment. The number of rare earth products that the U.S. produces is extremely limited, and therefore, the U.S. government has taken action over the last several years to increase production levels.
USA Rare Earth is partnered with Texas Mineral Resources in the development of their mine site located in Sierra Blanca, Texas, which is expected to open in 2028. They also have a magnet manufacturing facility located in Stillwater, Oklahoma, which is projected to begin its production at the end of this year.
According to sources, as part of the USA Rare Earth investment, Washington will be granted 16.1 million shares along with warrants for 17.6 million additional shares, all priced at $17.17 per share, which is similar to previous trading prices for the company’s stock this month. The Financial Times was one of the first to report on this investment. This represents a continued effort by the Trump administration to invest in critical minerals following last year’s investment in MP Materials, Lithium Americas, and Trilogy Metals.
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In addition, a senior Trump official recently stated that there are plans for more large-scale investments within the U.S. mining industry in order to boost the supply of lithium, rare earth elements, and other critical minerals that are necessary for national security as well as advancing artificial intelligence and other fields.
One of the sources stated that USA Rare Earth is working with Cantor Fitzgerald, the financial services company led by Brandon Lutnick, the son of Howard Lutnick, U.S. Secretary of Commerce, to assist in raising money for their operations.
