USA Rare Earth announces Letter of Intent with the US Government

The Department of Commerce’s CHIPS Program has provided an LOI covering a total of US$1.6 billion, including US$277 million in proposed federal funding and US$1.3 billion in a proposed senior secured loan under the CHIPS Act. In conjunction with this announcement, USAR has raised a common stock PIPE in the amount of US$1.5 billion anchored by Inflection Point with participation from large mutual fund complexes.

The LOI with the US Government reflects the strategic importance of USAR’s mine-to-magnet platform and its role in closing the rare earth element and critical mineral supply gap for essential industries that underpin US national security, including semiconductors, other critical technologies, and advanced manufacturing. The LOI is subject to further diligence, finalisation of agreements, customary closing conditions, and approvals.

This capital is expected to accelerate and de-risk USAR’s growth objectives across mining, processing, metal-making and magnet manufacturing, and supports a business that by 2030 will:

• Extract 40 000 tpd of rare earth and critical mineral feedstock from USAR’s Round Top deposit, which is expected to begin commercial production in 2028.
• Process a combined 8000 tpy of third-party MREC and heavy rare earth elements (HREEs) and critical mineral oxides and concentrates at Round Top, including 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) – all essential to semiconductors, aerospace, defence and energy production, and largely unavailable domestically.
• Reshore 10 000 tpy of heavy rare earth element (heavy REE) metal and alloy-making and strip-casting capacity, capabilities that do not currently exist in the US, through the top-tier expertise of its subsidiary Less Common Metals Ltd (LCM).
• Increase neodymium-iron-boron (NdFeB) magnet-making capacity to 10 000 tpy, more than double previously planned capacity.
• Process 2000 tpy of swarf resulting from our NdFeB magnet production.

“This landmark collaboration with the US Government represents a transformative step in USAR’s mission to secure and grow a resilient, independent domestic rare earth value chain”, said Barbara Humpton, Chief Executive Officer of USAR. “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 US national security, global economic competitiveness, and critical technologies of the future.”

“This transformational collaboration with Department of Commerce and the proposed US$1.6 billion of CHIPS Act funding, along with US$1.5 billion of private sector financial and strategic capital, will help secure the heavy rare earth supply chain for the US and its allies and underscores USAR’s strategic nature in support of national and economic security”, said Michael Blitzer, Chairman of the Board of USAR and Chairman and CEO of Inflection Point. “USAR and the Department of Commerce will mobilise a multi-year partnership at unprecedented scale and speed to build out capacity across heavy rare earth feedstock, processing, metal, and magnets, and we are proud to partner with the US Government in support of the company’s next phase of growth. We look forward to successfully implementing this ambitious plan with the goal of generating substantial financial returns for our shareholders.”

“USAR’s heavy critical minerals project is essential to restoring US critical mineral independence”, said 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 US DOE’s National Energy Technology Laboratory has signed a LOI to collaborate with USAR 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 prioritised innovation in process modelling, 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.

“Thanks to President Trump’s leadership, the DOE is ending America’s reliance on foreign nations for the critical materials essential to our economy and national security”, said US Energy Secretary Chris Wright. “The DOE is partnering with USAR to rebuild the critical minerals supply chain. By expanding domestic mining, processing, and manufacturing capabilities, we are creating good-paying American jobs and safeguarding our national security.”

“Accelerating the onshoring of rare earth minerals, metals, and magnets is paramount to national and economic security”, said the Executive Director of the US Investment Accelerator, Michael Grimes. “With the Department of Commerce’s funding for USA Rare Earth’s vertically integrated mine-to-magnet operations, we will significantly increase the domestic supply of crucial components for semiconductors, defence, and numerous other industries strategic to the US.”

“The CHIPS Program’s proposed US$277 million funding and US$1.3 billion loan will be instrumental for the construction of a domestic integrated supply chain for critical minerals and NdFeB magnets, which are essential for semiconductor chip manufacturing”, said Bill Frauenhofer, Director of the CHIPS Program. “Yttrium, gallium, terbium, and the other nine critical and strategic minerals that will be mined in Texas, along with the Oklahoma magnet production, provides US semiconductor companies a reliable domestic source and removes choke points in their manufacturing supply chain that enable chemical vapour deposition, high-k materials, compound semiconductors, dopants, and other foundational applications.”

Read the article online at: https://www.globalminingreview.com/exploration-development/28012026/usa-rare-earth-announces-letter-of-intent-with-the-us-government/