USA Rare Earth Inc. (NASDAQ: USAR) announced it has finalized agreements with the U.S. Department of Commerce to access up to $1.6 billion in funding under the CHIPS Program. The funding comprises up to $277 million in federal grants and up to $1.3 billion in senior secured loan capacity.

The company will issue 16.1 million shares of common stock and approximately 17.6 million warrants to the Department of Commerce. Funding disbursements are tied to the achievement of project milestones and structured to reimburse capital expenditures.

Combined with a $1.5 billion private investment in public equity transaction completed in January 2026 and previous capital raises, USA Rare Earth says it has approximately $3.5 billion in committed capital to support its growth plan.

The funding will support development of the Round Top heavy rare earth and critical mineral deposit in Hudspeth County, Texas, with commercial production targeted for 2028. The project aims to process and separate heavy rare earth elements including dysprosium, terbium, yttrium, and other critical minerals.

The agreements also support reshoring 10,000 tons per annum of heavy rare earth element metal and alloy-making capacity through subsidiary Less Common Metals, and scaling neodymium-iron-boron magnet manufacturing capacity to 10,000 tons per annum at facilities in Stillwater, Oklahoma and Blacksburg, South Carolina.

"This partnership with the U.S. Government is the largest of its kind in our industry," said Michael Blitzer, Chairman of USA Rare Earth's Board.

The company operates across rare earth mining, processing, metal-making and magnet manufacturing, with operations planned across the United States, United Kingdom, France and Brazil.