The Department of Commerce’s CHIPS Program Office and USA Rare Earth have signed a non-binding letter of intent to provide the company with up to $1.6 billion in funding to strengthen the domestic semiconductor ecosystem by expanding the production of rare earth elements and magnets.
The National Institute of Standards and Technology said Monday the agreement includes up to $277 million in direct funding and a senior secured loan of up to $1.3 billion under the CHIPS and Science Act to advance rare earth mining, processing and magnet manufacturing capabilities in the U.S.
How Will the Commerce CHIPS Program Support USA Rare Earth’s Projects?
According to NIST, the proposed funding will support the company’s rare earth project in Round Top, Texas, and the expansion of its magnet manufacturing operations in Stillwater, Oklahoma.
The Round Top mine is expected to kick off commercial production in 2028. It will extract 40,000 metric tons per day of rare earth and critical mineral feedstock and process 8,000 metric tons per annum, or TPA, of third-party mixed rare earth carbonate and other elements.
USAR expects the Oklahoma manufacturing project to boost the production of neodymium iron boron, or NdFeB, magnets to 10,000 TPA while supporting strip-casting capacity of 10,000 TPA for rare earth metals and alloys.
“USA Rare Earth’s heavy critical minerals project is essential to restoring U.S. critical mineral independence,” said Secretary of Commerce Howard Lutnick. “This investment ensures our supply chains are resilient and no longer reliant on foreign nations.”
What Did USA Rare Earth CEO Barbara Humpton Say About the Government Partnership?
“This landmark collaboration with the U.S. Government represents a transformative step in USAR’s mission to secure and grow a resilient, independent domestic rare earth value chain,” USA Rare Earth CEO Barbara Humpton said in a statement.
Humpton, a five-time Wash100 awardee, added that the company appreciates the federal government’s support and recognition of the strategic importance of rare earth materials and permanent magnets. She noted that the public and private backing positions USA Rare Earth to accelerate development of domestic capabilities critical to U.S. national security, global competitiveness and future technologies.
USAR announced that it raised $1.5 billion through a private investment in public equity transaction with Inflection Point and other strategic investors.
How Does DOE Support USA Rare Earth’s Domestic Supply Chain Efforts?
In addition to its work with Commerce, USAR also signed an LOI with the Department of Energy’s National Energy Technology Laboratory to support the advancement of heavy rare earth element separation technologies at the company’s Wheat Ridge laboratory and Round Top deposit.
Under the partnership, DOE will support the development of digital twin capabilities to advance rare earth separation technologies and help establish a mine-to-magnet supply chain in the U.S.
