USA Rare Earth Secures $1.6B CHIPS Funding for Supply Chain

Stillwater, Oklahoma, USA USA Rare Earth, Inc. (Nasdaq: USAR) has officially executed definitive agreements with the U.S. Department of Commerce, securing access to up to USD 1.6 billion in funding via the CHIPS Program. This significant capital injection is designed to accelerate the development of the company's vertically integrated mine-to-magnet value chain, enhancing domestic security for critical rare earth minerals.

The funding structure consists of two primary components: up to USD 277 million in federal grants and up to USD 1.3 billion in senior secured loan capacity. These funds are contingent upon achieving specific project milestones, ensuring accountability and progress throughout the development phases. With this new capital added to the previous USD 1.5 billion PIPE transaction closed in January 2026, the company's total committed capital now reaches approximately USD 3.5 billion.

Transaction Details

• Total Commitment: Up to USD 1.6 billion in funding, including USD 277 million in federal grants and USD 1.3 billion in loan capacity.
• Capital Utilization: Funds will support the Round Top heavy rare earth deposit in Texas, processing and separation facilities, metal and alloy-making, and magnet manufacturing in Oklahoma and South Carolina.
• Equity Issuance: Under the agreement, USA Rare Earth will issue 16.1 million shares of common stock and approximately 17.6 million warrants to the U.S. Department of Commerce.

The definitive agreements serve as a cornerstone for USA Rare Earth's strategy to establish a secure, domestic supply chain for critical minerals, which are essential for sectors ranging from defense and aerospace to semiconductors, electric mobility, and clean energy. By reshoring processing and manufacturing capabilitiessuch as the 10,000 tons per annum (tpa) capacity for rare earth metal- and alloy-makingthe company aims to remove critical choke points in the American technology supply chain.