USA Rare Earth pulls in $1.5B private raise alongside government magnet commitment

What's the deal? USA Rare Earth raised $1.5 billion in a post-IPO equity round from private investors, announced in January 2026. The raise landed the same month Commerce Secretary Howard Lutnick unveiled a separate $1.6 billion government commitment to fund the US magnet maker.

What's the endgame? The company aims to break China's grip on critical minerals and rare earth magnets used in missile-guidance systems, automobiles, and data centers. Its Round Top Mountain mine near El Paso, Texas, and a magnet plant in Stillwater, Oklahoma, anchor the effort.

Why now? "We need to fix our critical minerals," Lutnick told a Washington conference in February. "We need to mine. We need to process. And we need to refine."

The expansion: USA Rare Earth said in June it plans a second magnet facility in South Carolina, though production there won't begin until 2028. The Stillwater plant started output in March but won't hit commercial scale until the fourth quarter of this year.

What could go wrong? When the company went public in March 2025, its market value was just $464 million, on par with early-stage mining ventures. Its Round Top mine has yet to produce anything, and geologists and Pentagon officials studying the ore since the 1970s found little promise. "Round Top is basically a lot of dirt," said Jon Hykawy, president of Stormcrow CapitalDealroom has a profile for this one. Try Dealroom →, who holds no position in the company.

The signal: The raise ranks among the largest post-IPO equity rounds in US energy, sitting in the 98th percentile of 832 comparable deals. But the parallel public and private financing — arranged by bankers at Lutnick's former firm, now run by his sons — has drawn conflict-of-interest questions from Democratic lawmakers, testing how far Washington will go to onshore critical minerals.

Image credit: Ken Lund