"The Trump administration will invest $1.6 billion in Oklahoma-based USA Rare Earth, giving the government an equity stake that could exceed 15% as the White House continues its spree of investments in publicly traded companies. Since Trump began his second term, the federal government has acquired ownership-or the right to purchase shares-in at least 10 companies. These include a "golden share" in Nippon Steel-owned U.S. Steel and becoming the largest shareholder in USA Rare Earth's rival, MP Materials. The wave of dealmaking increasingly makes Trump the CEO-in-chief."
"Six of the 10 pertain to the critical minerals industry, including rare earths, as the U.S. increasingly tries to break China's near monopoly on the industry that's vital to manufacturing everything from military equipment to cars to high-powered computing and data centers. "USA Rare Earth's heavy critical minerals project is essential to restoring U.S. critical mineral independence," said U.S. Commerce Secretary Howard Lutnick in a statement."
"The government's ownership stake could range from 8% to 16% depending on whether all the warrants are executed, according to an SEC filing Jan. 26. The deal includes $277 million in direct federal funding and a $1.3 billion loan through the CHIPS Act. USAR also announced a PIPE (private investment in public equity) deal for $1.5 billion in private investment in its equity led by large mutual fund players."
A $1.6 billion federal investment in Oklahoma-based USA Rare Earth gives the government an equity stake that could exceed 15%. The transaction includes $277 million in direct federal funding, a $1.3 billion loan through the CHIPS Act, and a $1.5 billion private PIPE investment led by major mutual funds. The federal government has acquired ownership or purchase rights in at least 10 publicly traded companies since the administration began its second term, with six deals tied to critical minerals and rare earths. The moves aim to reduce reliance on China’s near monopoly over rare earths and magnet manufacturing. USA Rare Earth's stock rose 8% on Jan. 26 and is up 125% year-to-date.
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