USA Rare Earth Stock Surges After U.S. Government Investment Announcement
Shares of USA Rare Earth surged sharply after news broke that the U.S. government plans to take an equity stake in the company, marking another major step in Washington’s push to strengthen domestic supply chains for critical minerals.
The stock jumped 20% on Monday, extending gains from the previous trading session. With this move, USA Rare Earth has already delivered an impressive 108% gain year-to-date in 2026, making it one of the standout performers in the U.S. mining sector.
The rally followed the company’s announcement that it has entered into a non-binding letter of intent with the U.S. Department of Commerce, in coordination with the Department of Energy. Under the proposed agreement, USA Rare Earth would receive a $1.3 billion loan from the Commerce Department, along with $277 million in federal funding. In exchange, the government would receive 16.1 million common shares and 17.6 million warrants in the company.
The funding is intended to accelerate development of the company’s Round Top rare earth and critical minerals project in West Texas. According to the agreement, USA Rare Earth aims to begin production by 2028, with plans to extract approximately 40,000 metric tons of critical mineral feedstock per day by 2030. The Round Top deposit, located in Hudspeth County, is considered one of the most significant rare earth resources in the United States.
This investment aligns closely with the White House’s broader strategy to reduce U.S. dependence on foreign suppliers of rare earth elements—materials that are essential for advanced manufacturing, defense systems, electric vehicles, and artificial intelligence technologies.
As demand for rare earths and critical minerals continues to rise, particularly due to the rapid expansion of AI and clean-energy infrastructure, the administration has also taken stakes in other U.S.-based mining companies. Firms such as MP Materials, Critical Metals, and Lithium Americas were also cited as beneficiaries of similar government support, and their stocks rose following the announcement.
Industry analysts note that government participation in strategic mining projects has helped fuel strong momentum across the sector. Mining stocks emerged as one of the hottest trades of 2025, and that trend appears set to continue into 2026 as additional domestic producers receive federal backing.
Commenting on the announcement, USA Rare Earth CEO Barbara Humpton said the agreement positions the company to rapidly expand critical domestic capabilities that are essential to U.S. national security and long-term economic competitiveness. U.S. Commerce Secretary Howard Lutnick also emphasized the importance of securing mineral supply chains that are not dependent on foreign nations.
