USA Rare Earth Stock Soars 20% After $1.3 Billion Commerce Department Investment
USA Rare Earth Stock Surges on Government Backing
Shares of USA Rare Earth jumped 20% on Monday after news broke that the US Department of Commerce is investing in the company. The announcement follows a strong start to 2026, with year-to-date gains already at 108%.
The company plans to extract critical minerals from its Round Top mine in West Texas, aligning with the White House’s strategy to boost domestic production of rare earth materials.
What the Commerce Department Deal Means
USA Rare Earth signed a non-binding letter of intent with the Commerce Department as part of a collaboration with the US Department of Energy.
The deal includes:
- A $1.3 billion loan from the Commerce Department
- $277 million in federal funding
- Issuance of 16.1 million common shares and 17.6 million warrants to the government
In return, the government will hold an equity stake in the company.
By 2030, USA Rare Earth aims to extract 40,000 metric tons of critical mineral feedstock daily from Round Top. Production is expected to begin in 2028, in Hudspeth County, West Texas.
Why This Move Matters
The initiative is part of the Trump administration’s push to strengthen the domestic supply chain for critical materials, reducing dependence on foreign producers.
Barbara Humpton, CEO of USA Rare Earth, said:
"With this unprecedented show of public and private support, we are positioned to accelerate the build-out of important domestic capabilities that are essential to U.S. national security, global economic competitiveness, and critical technologies of the future."
Secretary of Commerce Howard Lutnick emphasized the importance of keeping the US supply chain independent from other countries.
Rare Earth Mining Stocks Gain Momentum
The surge in USA Rare Earth shares reflects a broader trend in the mining industry. As AI, clean energy, and high-tech industries grow, the demand for critical minerals and rare earth elements is rising.
Other US-based mining firms, including MP Materials, Critical Metals, and Lithium Americas, also saw their stocks rise on Monday after similar government involvement.
This strategy of taking stakes in domestic mining companies has turned the sector into one of the hottest trades of 2025 and is expected to continue into 2026.
Round Top Mine: A Game-Changer for US Rare Earth Supply
The Round Top mine is a major domestic source of rare earth minerals. Once operational, it could produce tens of thousands of tons of critical feedstock annually, supporting industries from AI technology to defense systems.
The federal investment will help accelerate the build-out of infrastructure, technology, and production capabilities, ensuring that America has a secure, homegrown supply of essential minerals.
What Investors Should Know
- USA Rare Earth is now backed by both private and federal capital, giving it the resources to expand rapidly.
- Production at Round Top is expected to begin by 2028, with full-scale output by 2030.
- The move aligns with a broader government strategy to invest in domestic industries critical to national security and economic competitiveness.
- Mining stocks, especially in the rare earth sector, may continue to see strong momentum as the US government doubles down on domestic production.
The Bigger Picture
The Commerce Department’s investment highlights a shift in US industrial strategy:
- Prioritizing domestic supply chains for key technologies
- Supporting companies that provide critical minerals for emerging technologies
- Reducing reliance on foreign suppliers, particularly in Asia and other high-risk regions
For investors and tech industry watchers, this deal marks a major turning point for US rare earth production.