USA Rare Earth confirmed this week that it has a letter of intent with the federal government that gives the company funding access to $1.6 billion and the administration a 10% stake.
The LOI, which comes from the Department of Commerce’s CHIPS Program, includes a proposed $277 million of federal funding and $1.3 billion in a senior secured loan from the CHIPS Act.
USARE said the pact underscores the strategic importance of its mine-to-magnet platform as well as its role in closing the rare earth element and critical mineral supply gap; it noted the LOI is subject to further diligence, finalization of agreements, customary closing conditions, and approvals.
The company’s goal for the capital is to accelerate its growth for mining, processing, metal-making and magnet manufacturing. Specifically, its goal by 2030 is to extract 40,000 metric tons per day of rare earth and critical mineral feedstock from USARE’s Round Top deposit, which is expected to begin commercial production in 2028.
Additionally, it wants to process a combined 8,000 metric tons annually of third-party MREC and heavy rare earth elements (HREEs) and critical mineral oxides and concentrates. They will include dysprosium (Dy), terbium (Tb), yttrium (Y), gadolinium (Gd), hafnium (Hf), erbium (Er), thulium (Tm), lutetium (Lu), ytterbium (Yb), holmium (Ho), gallium (Ga), and zirconium (Zr).
Third, USARE is seeking to reshore 10,000 t/y of heavy rare earth element (heavy REE) metal- and alloy-making and strip-casting capacity. These capabilities do not currently exist in the U.S.
Finally, it has a mission to increase neodymium-iron-boron (NdFeB) magnet-making capacity to 10,000 t/y and process 2,000 t/y of swarf resulting from its NdFeB magnet production.
“This landmark collaboration with the U.S. Government represents a transformative step in USARE’s mission to secure and grow a resilient, independent domestic rare earth value chain,” said Barbara Humpton, CEO.
“We are grateful to President Trump, Secretary Lutnick, and Secretary Wright for their support and recognition of the strategic importance of rare earth materials and permanent magnets. With this unprecedented show of public and private support for our Company, 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.”
“USA Rare Earth’s heavy critical minerals project is essential to restoring U.S. critical mineral independence,” added Secretary of Commerce Howard Lutnick.
“This investment ensures our supply chains are resilient and no longer reliant on foreign nations.”
In addition to the collaboration with the Department of Commerce, the U.S. Department of Energy’s National Energy Technology Laboratory has signed an LOI to collaborate with USARE to advance heavy REE separation technologies at the company’s Wheat Ridge lab and Round Top deposit, leveraging digital twin technology.
“Under the Trump administration, the DOE has prioritized innovation in process modeling, the use of digital twins, and the deployment of testbeds for material-processing R&D. Through this partnership, the DOE will contribute to the development of digital twins to advance rare earth element separation technologies, with the ultimate goal of establishing the country’s first fully domestic mine-to-magnet supply chain,” USARE officials said.
In related news, on January 22, the miner announced the selection of Fluor and WSP Global as its Engineering, Procurement and Construction Management (EPCM) partners to advance the definitive feasibility study for the Round Top project.
At the same time, the company will operate its demonstration plant in Wheat Ridge, Colo., for at least 2,000 continuous hours, with operations currently expected to conclude in October. Data generated during this run will be used to complete the second phase of the DFS.
USA Rare Earth plans to carry out confirmatory and geotechnical drilling at Round Top in the first half of this year, along with a heap leach optimization study, to support mine design and engineering. It is currently targeting commercial production of heavy rare earth oxides in late 2028.
Source: USA Rare Earth