USA Rare Earth Surges in Early Trading: $3.1 Billion Capital Injection Powers Rare Earth Element Strategy

USA Rare Earth (USAR) shares jumped 20.7% to $29.92 in pre-market trading, driven by a transformative funding announcement that underscores the critical importance of earth element supply chains to U.S. strategic interests. The rally reflects investor confidence in the company’s ambitious capital expansion plan, which combines government backing with substantial private investment.

Federal Government Backs Earth Element Supply Security

USAR has secured a non-binding Letter of Intent (LOI) with the U.S. Department of Commerce through the CHIPS Program, demonstrating Washington’s commitment to domestic rare earth element production. The deal package totals $1.6 billion, comprising $277 million in direct federal grants and $1.3 billion in senior secured loans under the CHIPS Act framework.

The strategic partnership also involves the U.S. Department of Energy, signaling broad government support for USAR’s mission to secure America’s supply of critical earth element materials. These resources will support the company’s mine-to-magnet integrated platform, which processes rare earth elements from raw extraction through magnet production—a crucial capability for semiconductors, advanced manufacturing, and defense technologies.

Private Sector Joins Government in Major Capital Commitment

Complementing the government package, USAR has raised $1.5 billion through a private investment round anchored by Inflection Point Venture Capital, with participation from major institutional investors and mutual fund complexes. This PIPE (Private Investment in Public Equity) reflects strong confidence in the company’s execution capabilities and market positioning.

The combined capital infusion—$1.6 billion from government sources plus $1.5 billion from private investors—totals $3.1 billion, positioning USAR as a formidable player in addressing the critical shortage of rare earth elements and other strategic minerals essential to U.S. economic and security objectives.

Financial Expectations and Market Implications

For the fiscal year ending December 31, 2025, USAR projects operating expenses between $56 million and $62 million, with capital expenditures of $37 million to $43 million. These investments underscore the company’s aggressive expansion strategy to scale earth element production capacity and close persistent supply gaps that have constrained U.S. competitiveness in advanced manufacturing and technology sectors.

The pre-market surge reflects market recognition that USAR’s integrated approach—combining government support, private capital, and proven mine-to-magnet expertise—positions the company to capture significant value as demand for rare earth elements accelerates globally.