Trump administration invests in another US rare earth miner to loosen China’s grip on supply

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This article was published 26/01/2026 (263 days ago), so information in it may no longer be current.

The U.S. is taking a minority stake in an Oklahoma rare earth miner, the latest government investment in the sector as it seeks to minimize its reliance on imports of a material used prevalently in smartphones, robotics, electric vehicles and many other high tech products.

China processes more than 90% of the world’s critical minerals and has used its dominance in the market to gain leverage in the trade war with Washington.

USA Rare Earth said Monday that the U.S. Commerce Department is investing $1.6 billion in the company to advance work on a mine in Texas and to build a magnet manufacturing facility in Oklahoma.

Shares of USA Rare Earth jumped more than 13% before U.S. markets opened.

The agreement with the Commerce Department’s CHIPS program includes $277 million in proposed federal funding and a $1.3 billion senior secured loan. The Commerce Department will get 16.1 million shares of common stock in return, as well as rights to buy 17.6 million more.

“USA Rare Earth’s heavy critical minerals project is essential to restoring U.S. critical mineral independence,” Secretary of Commerce Howard Lutnick said in a statement. “This investment ensures our supply chains are resilient and no longer reliant on foreign nations.”

The Trump administration is intensifying efforts to build up the critical mineral industry in the United States to work to break the chokehold that China has on the global supply chain.

Industry insiders, analysts and lawmakers have warned for years that America’s dependence on China for critical minerals — a list of 50 minerals that includes 17 sought-after rare-earth elements — is a national security vulnerability.

Attempts by President Donald Trump to acquire Greenland is part of that push.

USA Rare Earth, based in Stillwater, Oklahoma, is the third U.S. operator in which the Trump administration has invested in recent months.

The Pentagon invested $400 million in rare-earth producer MP Materials. It gave the U.S. company a $150 million loan in August.

The Trump administration and private investors in November announced a partnership with rare earth startups Vulcan Elements and ReElement Technologies. The $1.4 billion deal is intended to scale up U.S. access to materials and technology that are crucial for producing an array of high-tech goods and military equipment.

The Trump administration’s tax and spending cut bill includes $2 billion for the Pentagon to boost the U.S. stockpile of critical minerals and $5 billion more through 2029 to invest in those supply chains.

Between 2020 and 2024, the Pentagon said it had awarded more than $439 million to establish supply chains for domestic rare earths.

Earlier this month a bipartisan group of lawmakers proposed creating a new agency with $2.5 billion to spur production of rare earths and the other critical minerals.