USA Rare Earth Inc. (NASDAQ: USAR) announced the U.S. Department of Energy selected the company to receive up to $19.3 million in federal funding under the Critical Materials Innovation, Efficiency and Alternatives program. The funding will support development of a pilot-scale rare earth element separations project to advance domestic processing capacity.

The total project value is approximately $50.5 million, including the potential DOE funding and $31.2 million in non-DOE funding. The award aims to support development of pre-commercial separations capacity in the United States for materials used in energy, defense and advanced manufacturing supply chains.

"We are honored to be selected by the Department of Energy under its critical materials innovation program," said Barbara Humpton, Chief Executive Officer of USA Rare Earth. "This selection is an important validation of our team's cutting edge work to build a resilient rare earth value chain."

The company stated that rare earth separations represent a concentrated bottleneck in the global critical minerals ecosystem. Final project scope, budget and timeline will be determined through negotiations with the DOE.

The funding selection does not constitute a binding commitment and any award remains subject to successful completion of negotiations with the DOE and execution of a definitive funding agreement, according to the company's statement.

USA Rare Earth operates across the rare earth value chain from mining to magnet manufacturing, with facilities planned or operating in the United States, United Kingdom, France and Brazil.