US buys into rare earths firm

The Trump administration announced Monday that it had agreed to extend up to $277 million in direct funding and up to $1.3 billion in loans to USA Rare Earth Inc, a mining and manufacturing group, to help develop its supply chain for rare earth metals and magnets.

- ANA SWANSON

The deal adds to the administration’s growing portfolio of equity stakes in private companies, and it would help expand domestic production of a critical input for cars, robots, semiconductors, drones and other products. China, which dominates the production of rare earth minerals and magnets, began clamping down on its export last year, and companies have struggled to find other sources of supply.

The Commerce Department, which arranged the financing through a semiconductor investment scheme set up during the Biden administration, said it had signed a nonbinding letter of intent to provide the funding, subject to further due diligence and approvals. The deal will give the Commerce Department about 16 million shares in the company, as well as a warrant to acquire another 17.6 million shares, the department said.

Commerce Secretary Howard Lutnick said ina statement that the company’s project was essential to “restoring US critical mineral independence.’ The investment “ensures our supply chains are resilient and no longer reliant on foreign nations,” he said.