11:55 AM EST, 01/26/2026 (MT Newswires) -- USA Rare Earth's ( USAR ) shares soared on Monday as the critical minerals producer disclosed $3.1 billion in total funding, including a proposed investment worth $1.6 billion by the federal government.

The Department of Commerce plans to award a $1.3 billion loan and $277 million in federal funding to the rare earth mining company, both under the CHIPS Act.

The CHIPS and Science Act aims to boost the semiconductor industry, according to information available on the agency's website. Semiconductors power products including smartphones, computers, cars and medical devices.

Rare earths are essential for the magnets used in motors and generators, while minerals gallium and germanium underpin high-speed chips and fiber-optic networks, according to an article published on the World Economic Forum's website in October 2025.

China dominates the rare earths value chain.

"This landmark collaboration with the US government represents a transformative step in (USA Rare Earth's ( USAR )) mission to secure and grow a resilient, independent domestic rare earth value chain," Chief Executive Barbara Humpton said in a statement.

The stock was up 12% in Monday trade.

In addition, the company raised $1.5 billion from a private placement, anchored by Inflection Point "with participation from large mutual fund complexes," USA Rare Earth ( USAR ) said. Under this deal, the company will issue 69.8 million shares at $21.50 each.

The capital will help the company establish the largest domestic production base of rare earths and magnets by 2030.

"With this unprecedented show of public and private support for our company, we are positioned to accelerate the build-out of important domestic capabilities that are essential to US national security, global economic competitiveness, and critical technologies of the future," Humpton said.

USA Rare Earth ( USAR ) said it will issue 16.1 million common shares and about 17.6 million warrants to the Department of Commerce, giving the US government a stake of 8% to 16% depending on whether the warrants are exercised, according to a regulatory filing Monday.

The company expects the private investment to close on Wednesday and the proposed CHIPS Act funding to complete within this quarter.

Price: 27.27, Change: +2.50, Percent Change: +10.09