U.S. Government Pledges $1.6B for 10% Stake as Total Investment Tops $3.1B
The U.S. government will invest $1.6B in USA Rare Earth for a 10% stake, receiving 16.1M plus 17.6M shares, while private backers contribute $1.5B, bringing total capital injection to $3.1B to fund Texas mine-to-magnet operations. Three Democratic senators have raised conflict-of-interest concerns over Cantor Fitzgerald's role in the deal.
1. Major Capital Injection for Sierra Blanca Mine
The U.S. government has agreed to a $1.6 billion debt-and-equity package securing a 10% stake in USA Rare Earth, receiving 16.1 million shares plus an additional 17.6 million shares. Institutional investors have committed $1.5 billion, bringing total funding to $3.1 billion to accelerate the Round Top Mountain mine development in Texas and an associated magnet manufacturing facility in Oklahoma, with the mine slated to open in 2028.
2. Senate Inquiry Over Conflict of Interest
Three Democratic senators sent a letter to Commerce Secretary Howard Lutnick questioning Cantor Fitzgerald's advisory and fundraising role in the financing round that secured the Commerce Department’s investment. The senators allege potential conflicts of interest given Cantor Fitzgerald’s dual position as adviser on the rare-earth deal and broker for USA Rare Earth’s private funding.