USA Rare Earth Takes Center Stage in America’s Rare Earth Push as Trump–Xi Summit Nears

USA Rare Earth (Nasdaq: USAR) has become one of the clearest ways for investors to bet on Washington’s plan to break China’s hold on rare earth magnets. The company has lined up a $1.6 billion Commerce Department funding package, closed a $2.8 billion deal for a Brazilian mine and started making magnets in Oklahoma. As a result, its market value has grown from $464 million at its March 2025 IPO to more than $6 billion. Now, with President Donald Trump and Chinese President Xi Jinping meeting in Washington this week, a new Bloomberg investigation is asking whether the company can deliver on those promises. Shares slipped about 6% to roughly $16 on Wednesday.

Key Points

• The Commerce Department will take a 10% stake in exchange for a $277 million equity investment and a $1.3 billion loan, once the company hits certain technical and financial milestones.
• A $1.5 billion private share sale (PIPE), arranged by Cantor Fitzgerald and Moelis & Co., drew about $4 billion in offers.
• The Stillwater, Oklahoma, magnet plant began production in March and aims for commercial scale in the fourth quarter. A second plant in South Carolina is planned for 2028.
• The company plans to start commercial production at its Round Top deposit in Texas in 2028. Bloomberg quotes critics who question the ore grade there.
• China’s rare earth export controls, currently paused until November, are expected to be on the agenda at this week’s summit.

USA Rare Earth (Nasdaq: USAR) Builds a Mine-to-Magnet Strategy

USA Rare Earth wants to control every step of the magnet supply chain: mining the ore, processing it into metal and making finished magnets. These high-strength permanent magnets go into missile guidance systems, electric vehicles and data centers. To reach that goal faster, the company has expanded well beyond its Texas base.

First, it bought British metals and alloy maker Less Common Metals. Next, it took a 12.5% stake in French processing specialist Carester SAS and bought out the remaining ownership of Round Top for $73 million. Then, in August, it closed its $2.8 billion purchase of Brazil’s Serra Verde Group. That mine comes with significant US government support: a $565 million loan from the US International Development Finance Corp. and a Pentagon commitment to buy up to $750 million of its minerals.

The company says these deals secure its supply chain while Round Top is still being developed. “I don’t think of this as a pivot,” outgoing CEO Barbara Humpton told Bloomberg. She described the company’s global assets as complementing its commitment to US production.

Washington Backs Its Critical Minerals Bet

The Commerce Department deal is part of a wider federal push. The administration has also taken equity stakes in MP Materials (NYSE: MP) and Trilogy Metals (NYSE American: TMQ). In February, Commerce Secretary Howard Lutnick summed up the goal: the US needs to mine, process and refine critical minerals itself.

As a result, timing matters for USA Rare Earth. China’s export controls have become a key issue in US–China trade talks, so anything the summit decides about extending the pause could move rare earth stocks sharply in either direction.

The Questions Investors Are Weighing

However, Bloomberg’s report raises several issues. First, according to public filings, the company hadn’t hit any of its government funding milestones as of the end of June, and no loan money had been paid out, although the government has received its shares and warrants. Second, the Center for Strategic & International Studies described Round Top’s ore grade as “exceptionally low” and called it the project’s biggest economic risk. The company, for its part, says the deposit has been validated by government due diligence, private investors and industry partners.

In addition, Democratic senators have questioned the role of Cantor Fitzgerald, which Lutnick used to lead and his sons now run, in the private share sale. Both Cantor and the Commerce Department deny any link between the placement and the government’s funding decision. Finally, the company is changing leadership: Serra Verde CEO Thras Moraitis will take over from Humpton in October.

What to Watch

Going forward, investors will likely focus on three things: whether Stillwater reaches commercial-scale output this quarter, whether the company hits its Commerce Department milestones, and what the Trump–Xi summit decides about China’s export controls. If all three go well, USA Rare Earth could become a central player in the US rare earth supply chain. If they don’t, the scrutiny around the company is likely to grow.