U.S. to back USA Rare Earth with up to $1.6 billion in financing

The Trump administration announced on Monday that it would extend up to $277 million in direct funding and up to $1.3 billion in loans to USA Rare Earth Inc., providing as much as $1.6 billion to help develop a domestic supply chain for rare earth metals and magnets. The Commerce Department said the financing was arranged through a semiconductor investment program set up during the Biden administration and that it had signed a nonbinding letter of intent, subject to further due diligence and approvals.

The department said the deal would give it approximately 16 million shares and a warrant to acquire another 17.6 million shares. Secretary of Commerce Howard Lutnick said the project was essential to "restoring U.S. critical mineral independence" and that the investment "ensures our supply chains are resilient and no longer reliant on foreign nations." The announcement came after China began clamping down on rare earth exports last year, the article said.

On the same day USA Rare Earth said it had raised $1.5 billion from private investors, naming Cantor Fitzgerald as the lead placement agent. The overlap between the Commerce Department and Cantor Fitzgerald has drawn scrutiny after revelations by The New York Times that the Wall Street firm profited from several projects Mr.

Lutnick promoted; Mr. Lutnick has divested from Cantor Fitzgerald and the firm is now led by two of his sons.

Key Topics

Politics, Usa Rare Earth, Howard Lutnick, Cantor Fitzgerald, China, Texas