US Department of Energy (DOE) USA chose Rare Earth (Nasdaq: USAR) to receive up to $19.3 million in federal funding for a rare earth separation pilot project aimed at strengthening domestic supply chains for critical minerals.
The funding, which is subject to final negotiations, comes through the Department of Energy’s Biomaterials Innovation, Efficiency, and Alternatives program and will support the development of processing capacity for rare earth elements used in energy, defense, and advanced manufacturing.
The total value of the project is estimated at approximately $50.5 million, including $31.2 million in funding from entities other than the Ministry of Energy. The final scope, budget and timing remain under negotiation with management.
“We are honored to be selected by the Department of Energy for its Biomaterials Innovation Program,” said CEO Barbara Hampton He said in a statement. “This selection is an important validation of the cutting-edge work our team has done to build a resilient rare earth value chain.”
The company’s shares jumped after the news and were last trading up 5.6% at $23.78 apiece in early morning trading, valuing USA Rare Earth at just over $5.3 billion.
Expansion campaign
This award represents another step in USA Rare Earth’s aggressive expansion drive as it seeks to challenge China’s dominance in critical mineral processing and establish itself as a leading Western supplier of rare earth elements and permanent magnets. The company has accumulated assets across the US, UK, France and Brazil that include mining, metals, alloys and magnet manufacturing.
USA Rare Earth has pursued a series of acquisitions and investments since going public through a reverse takeover last year. In 2025, it acquired its headquarters in the United Kingdom less common minerals, Gain the ability to produce rare earth metals and alloys In April It acquired a 12.5% stake in French company Carester SAS to access rare earth element processing expertise.
The company also received $1.6 billion in proposed financing from the US Department of Commerce in January, conditional on achieving milestones associated with the construction of key projects.
The acquisition is under review
Last month, USA announced Rare Earth $2.8 billion deal to acquire Brazilian company Serra Verdeowner of the Bella Emma rare earth mine in the state of Goiás. The deal included a 15-year US offtake agreement linked to the production of neodymium, praseodymium, dysprosium and terbium, metals used in high-performance magnets.
Antitrust Authority of Brazil An investigation has been opened In the proposed Serra Verde purchase, which would give the United States control of Brazil’s only rare earth mine. The process, which entered commercial production two years ago, is one of the few outside China capable of producing heavy rare earth elements on a large scale. Serra Verde said the mine could account for half of China’s global production of heavy rare earths by next year.
The Energy Department’s selection highlights Washington’s broader push to secure domestic supplies of strategic minerals as geopolitical tensions and export controls expose Western reliance on China’s dominance in rare earth mining, processing, and magnet manufacturing.
USA Rare Earth is betting on vertically integrated operations spanning from mining to magnet production, which will help position it as an essential supplier to the aerospace, defense, semiconductor, energy and data center industries.
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