USA Rare Earth, Inc. (Nasdaq: USAR) has taken a major step toward reshaping America’s rare earth industry. The company announced a non-binding Letter of Intent (LOI) with the U.S. Department of Commerce under the CHIPS Act, alongside a collaboration with the U.S. Department of Energy (DOE). Together with a large private investment, the move could bring $3.1 billion in total capital to the company.
This funding supports USAR’s goal to build a fully domestic, mine-to-magnet platform—from raw materials to finished magnets—critical for national security, clean energy, semiconductors, and advanced manufacturing.
Barbara Humpton, Chief Executive Officer of USA Rare Earth
“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. 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 U.S. national security, global economic competitiveness, and critical technologies of the future.”
CHIPS Act Support Underscores Strategic Importance
Under the LOI, the Department of Commerce’s CHIPS Program outlined support totaling $1.6 billion. This includes $277 million in proposed federal funding and a $1.3 billion senior secured loan under the CHIPS Act
In addition, USAR would issue 16.1 million common shares and about 17.6 million warrants to the Department of Commerce.
While the LOI is non-binding and subject to further diligence, approvals, and final agreements, it highlights the U.S. government’s growing focus on securing domestic supplies of rare earth elements and critical minerals.
These materials are essential for semiconductors, defense systems, aerospace applications, electric vehicles, and energy technologies—sectors where the U.S. currently relies heavily on imports.
$1.5 Billion PIPE Brings Total Capital to $3.1 Billion
Alongside government support, USA Rare Earth announced a $1.5 billion private investment in public equity (PIPE). The deal is anchored by Inflection Point, with participation from large mutual fund groups and other strategic investors.
Key details of the PIPE transaction include 69.8 million shares issued at $21.50 per share. The expected closing date is January 28, 2026, subject to standard conditions
If completed, the PIPE and the proposed CHIPS Act funding would give USAR the financial firepower to accelerate development across mining, processing, metal-making, and magnet manufacturing.
USAR’s Round Top Project Aims to Power U.S. Tech and Defense by 2030
The capital is expected to fast-track USAR’s long-term growth strategy, centered on its Round Top rare earth and critical minerals project in Texas and its downstream manufacturing assets.
By 2030, the company aims to:
- Extract 40,000 metric tons per day of rare earth and critical mineral feedstock from Round Top, with commercial production targeted for 2028
- Process 8,000 metric tons per year of third-party mixed rare earth concentrates and heavy rare earth elements (HREEs), including dysprosium, terbium, yttrium, gadolinium, hafnium, and gallium
- Reshore 10,000 tons per year of heavy rare earth metal and alloy production—capabilities that currently do not exist in the U.S.
- Expand NdFeB magnet production to 10,000 tons per year, more than double earlier plans
- Recycle 2,000 tons per year of magnet swarf, improving material efficiency
Many of these elements are critical for chips, defense systems, aerospace components, and clean energy infrastructure—and are largely unavailable from domestic sources today.
Q4 2025: Key Milestones Reached
USA Rare Earth also shared several operational updates for the fourth quarter of 2025, showing steady execution.
Major highlights included:
- Completion of the Round Top process flow sheet, validated through pilot-scale testing
- Acceleration of Round Top’s production timeline to late 2028, two years earlier than planned
- Progress toward commissioning the Stillwater, Oklahoma magnet facility in Q1 2026
- Completion of the acquisition of Less Common Metals Ltd. (LCM), a specialist in rare earth metals and alloys
LCM has already strengthened USAR’s downstream position by forming strategic supply agreements with Solvay, Permag, and Arnold Magnetic Technologies.
After the quarter ended, USAR also announced plans for a 3,750-ton-per-year metal and alloy plant in France, and selected Fluor Corporation and WSP Global as EPCM partners for Round Top.
USAR Stock Rallies Above 15%
Following this announcement, USA Rare Earth’s shares jumped more than 15% during the day, rising to $28.57 from the previous close of $24.77. At one point, the stock even reached nearly $32.
The stock had climbed as much as 27% earlier in the session, following strong gains of 9% and 17% over the previous two trading days.
- ALSO READ: MP Materials (MP Stock): The Rare Earth Magnet Powering America’s Clean Energy and Climate Goals
Why Rare Earths Matter More Than Ever
Rare earths are not actually rare in nature, but economically viable deposits are limited. As per USGS data, in 2024, the U.S. produced about 45,000 tons of rare earth oxide in mineral concentrates, valued at roughly $260 million. Most production came from the Mountain Pass mine in California.
Even so, the U.S. still imported around $170 million worth of rare earth compounds and metals in 2024. Many rare earths also enter the country embedded in finished goods, especially permanent magnets.
Measured and indicated rare earth resources are estimated at 3.6 million tons in the U.S. and over 14 million tons in Canada, underscoring the long-term potential—if domestic processing and manufacturing capacity can be built.
Thus, USA Rare Earth’s proposed $3.1 billion capital package marks a clear shift in how the U.S. approaches critical minerals. Instead of relying on fragmented supply chains, the focus is moving toward fully integrated, domestic systems.
If finalized, the CHIPS Act support and PIPE financing could position USAR as a cornerstone of America’s rare earth ecosystem—helping close supply gaps, reduce import dependence, and support industries vital to economic growth and national security.
For the U.S. rare earth sector, this announcement may prove to be a defining moment.
Last but not least, U.S. Energy Secretary Chris Wright hailed President Trump, saying:
“Thanks to President Trump’s leadership, the Department of Energy is ending America’s reliance on foreign nations for the critical materials essential to our economy and national security. 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.”
The post USA Rare Earth (USAR) Stock Soars After $3.1B Funding Boost for Mine-to-Magnet Buildout appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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