en.Wedoany.com Reported - On June 3, USA Rare Earth, Inc. (NASDAQ: USAR) announced that it has signed a definitive agreement with the U.S. Department of Commerce to receive nearly $1.6 billion in funding under a program supported by the CHIPS and Science Act (CHIPS Act). The funding package, first announced in the form of a letter of intent in January 2026, includes $277 million in federal funding and $1.3 billion in senior secured loans, with disbursements tied to the achievement of key project milestones. Combined with the previously announced $1.5 billion private placement, the company now has approximately $3.5 billion in capital for growth initiatives. The signing of this definitive agreement with the Department of Commerce marks a significant step in building a fully integrated domestic supply chain for heavy rare earths and critical minerals in the United States.
Founded in 2023 and headquartered in Stillwater, Oklahoma, USA Rare Earth is a vertically integrated supplier of rare earth magnets. Its core assets include mining rights to the Round Top deposit in West Texas—considered one of the largest heavy rare earth element deposits in the United States—and a magnet manufacturing facility in Stillwater, Oklahoma. The company has accelerated supply chain integration through a series of strategic acquisitions: the 2025 acquisition of UK-based metal manufacturer Less Common Metals Ltd. (LCM), one of the few companies outside China capable of large-scale production of rare earth metals and alloys; the $2.8 billion acquisition of Brazilian rare earth miner Serra Verde in April 2026; and an equity stake in French rare earth processing company Carester. These moves position the company as one of the few Western enterprises capable of covering the entire "mine-to-metal-to-magnet" value chain globally.
According to publicly available data from 2019, the Round Top deposit has measured and indicated resources of 364,000 tons of rare earth elements, technology metals, and industrial minerals, with inferred resources of 735,000 tons, totaling approximately 1.1 million tons. The company plans to begin commercial mining at the deposit in 2028. Meanwhile, the magnet facility in Stillwater, Oklahoma, commenced commercial production for Phase 1a on March 26, 2026, and is expected to reach an annual operating capacity of 600 metric tons by the end of the fourth quarter of 2026. Following the commissioning of Phase 1b, total annual capacity is projected to increase to 1,200 metric tons by the first quarter of 2027.
Michael Blitzer, President of USA Rare Earth, stated in a press release that this partnership provides the necessary funding to build a global platform covering the mining, processing, metal manufacturing, and magnet production of both light and heavy rare earths. CEO Barbara Hampton noted that these definitive agreements will accelerate the construction of a global "mine-to-magnet" value chain, supplying industrial customers with the materials, metals, and magnets they need.
The CHIPS and Science Act, enacted in 2022, aims to revitalize the U.S. semiconductor manufacturing industry and reduce reliance on foreign supply chains. China currently controls approximately 68.5% of global rare earth mining output and over 90% of neodymium-iron-boron (NdFeB) magnet production capacity. USA Rare Earth's Round Top deposit will yield 12 critical minerals, including yttrium, gallium, and dysprosium, which are among the top 30 most critical minerals identified by the U.S. government. Bill Frauenhofer, Executive Director of the CHIPS Program Office at the U.S. Department of Commerce, stated that this $1.6 billion in federal funding is crucial for building an integrated domestic supply chain for critical minerals and NdFeB magnets, providing U.S. semiconductor companies with a reliable domestic resource guarantee.
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