The US government is going shopping for minerals and this time, it’s buying equity. According to the Financial Times, Washington is set to invest $1.6 billion into USA Rare Earth $USAR ( ▲ 9.31% ) through a mix of equity and debt, giving the government a direct 10% ownership stake plus warrants in the company.
Investors wasted no time reacting. Shares of $USAR surged 35% in premarket trading after the news, building on an already strong week for rare earth stocks.
Uncle Sam Enters the Cap Table
The equity portion of the deal is reportedly under $300 million, with the rest structured as debt financing tied to CHIPS Act–related initiatives. The government’s shares were priced at roughly a 30% discount to Friday’s closing price, a sweet deal for Washington and a loud signal to markets that rare earth supply is now a national priority.
USA Rare Earth controls mineral rights to the Round Top deposit in Texas, one of the largest rare earth and critical mineral projects in the US. The move fits into a broader strategy by the Trump administration to secure domestic supply chains, especially as geopolitical tensions and resource nationalism heat up globally.
Critical Minerals = Strategic Assets
This is not the government’s first move in the sector. Earlier investments include a 15% stake in MP Materials $MP ( ▲ 6.96% ) , plus positions in Lithium Americas $LAC ( ▲ 0.49% ) and Trilogy Metals $TMQ ( ▲ 0.45% ) . Outside of a few defense-related names like L3Harris $LHX ( ▲ 2.27% ) and semiconductor giant Intel $INTC ( ▼ 1.6% ) , most recent federal equity bets have targeted companies tied to critical minerals.
That involvement is drawing in private capital too. Large institutions such as JPMorgan are increasing exposure to strategically important industries, while retail investors are increasingly trying to “follow the feds” by buying companies the government backs.
The Whole Sector Is Catching a Bid
The rally is not limited to $USAR ( ▲ 9.31% ) . Other critical minerals players are moving higher as well, including Critical Metals $CRML ( ▲ 5.12% ) , United States Antimony Corp. $UAMY ( ▲ 14.21% ) , and American Battery Technology Co. $ABAT ( ▲ 0.54% ) .
Between government money, geopolitical pressure, and the race to localize supply chains, rare earths are quickly shifting from a niche commodity story to a core pillar of US industrial policy.