USA Rare Earth secures $1.6B in federal funding to boost US output

USA Rare Earth secured up to $1.6 billion in US Commerce Department funding, the company's chief executive said, as Washington accelerates efforts to break China's grip on critical mineral supply chains.

"This funding represents a major step toward establishing a secure domestic supply chain for rare earth elements essential to defense and clean energy technologies," Barbara Humpton, chief executive officer of USA Rare Earth, said in an interview on Fox Business's "Mornings with Maria."

The funding package includes a non-binding letter of intent with the Commerce Department and a collaboration with the Energy Department, totaling about $1.6 billion in federal support, according to company statements. USA Rare Earth also secured $1.5 billion in private funding from Inflection Point. The company has selected Fluor to assist with the Definitive Feasibility Study for its cornerstone Round Top Rare Earth Project in Texas.

The investment comes as the Pentagon separately committed $25 million to rare earths startup ReElement Technologies for a processing facility in Indiana, part of a broader push to reduce US dependence on China, which controls more than 80 percent of global rare earth processing and magnet production.

Production Milestones and Expansion Plans

USA Rare Earth has made significant operational progress this year. In April, its subsidiary poured commercial-grade yttrium at a facility in the United Kingdom, a milestone the company said sets it apart as one of the few non-Chinese producers of the rare earth metal. The company also entered a definitive agreement to acquire Serra Verde Group for about $2.8 billion. Serra Verde is a large-scale producer of all four magnetic rare earths, including dysprosium, terbium, and yttrium, and is expected to achieve an annualized run-rate EBITDA of $550 million to $650 million by the end of 2027, according to USA Rare Earth management. Separately, the company partnered with the French government to develop a metal and alloy production facility in France expected to commence operations in late 2026. The Round Top Rare Earth Project in Texas, supported by Fluor's feasibility study, represents the company's cornerstone domestic asset.

Stock Performance and Analyst Outlook

Shares of USA Rare Earth rose 81.3 percent in the first half of 2026, according to S&P Global Market Intelligence, after gaining just 3.7 percent in 2025 while the S&P 500 rose 16.4 percent. The stock received multiple analyst upgrades early in the year, with Roth Capital raising its price target to $35 from $25 in January and Benchmark boosting its target to $45 from $15. Since June 30, however, shares have fallen more than 20 percent as of this writing, reflecting the volatility typical of speculative mining stocks. The company trades on the Nasdaq under the ticker USAR. The broader rare earth sector has also drawn government attention, with the Pentagon's $25 million investment in ReElement Technologies showing continued federal support for domestic processing capacity.

This article is for informational purposes only and does not constitute investment advice.