Federal plan outlines $1.6 billion package for USA Rare Earth’s Stillwater magnet plant expansion

Financing package would combine a secured loan and direct federal funding

A proposed federal financing package totaling $1.6 billion has been outlined for USA Rare Earth, an Oklahoma-based company building rare earth magnet manufacturing operations in Stillwater. The framework centers on a non-binding letter of intent that contemplates $277 million in proposed federal funding and a $1.3 billion proposed senior secured loan.

The contemplated arrangement is tied to federal efforts to strengthen domestic supply chains for critical minerals and the downstream manufacturing of components used across defense and advanced manufacturing. Rare earth permanent magnets—particularly neodymium iron boron (NdFeB) magnets—are used in a range of products including electric motors, generators, and military systems.

Stillwater is positioned as the magnet-manufacturing hub in a “mine-to-magnet” strategy

USA Rare Earth has described its strategy as an integrated “mine-to-magnet” platform, combining upstream mineral supply with downstream processing and magnet production. The company’s project footprint includes an Oklahoma magnet manufacturing facility in Stillwater and mining rights tied to the Round Top deposit in West Texas, which has been identified by the company as a source of heavy rare earths and other critical minerals.

State and local development announcements dating back to 2022 described Stillwater as the site for a rare earth metal and magnet manufacturing facility and projected job creation exceeding 100 positions once fully operational. More recent updates from industry and Oklahoma manufacturing stakeholders have described an “Innovations Lab” in Stillwater producing early magnet batches and planning a ramp toward commercial-scale output.

Key terms include an equity position and additional purchase rights for the U.S. government

Publicly described terms of the proposed financing include the U.S. government receiving an equity stake alongside rights to acquire additional shares. The proposal also remains subject to further diligence, negotiation of final agreements, customary conditions, and approvals, reflecting the preliminary status of the letter of intent.

• Proposed total package: $1.6 billion
• Proposed direct federal funding: $277 million
• Proposed senior secured loan: $1.3 billion
• Status: non-binding framework subject to final documentation and approvals

Timelines and execution risks remain central as the project moves toward commercialization

USA Rare Earth has previously projected steps toward commercialization for its Stillwater operations in 2026, while mining and processing timelines for the Texas resource extend later in the decade. As with large-scale industrial and mining developments, schedule execution depends on permitting, engineering, capital deployment, equipment commissioning, and securing long-term customers.

The proposed package reflects a policy shift toward financing not only mineral extraction, but also domestic manufacturing capacity for high-value components such as rare earth magnets.

Further details—including definitive transaction terms, milestones, and the final structure of federal support—are expected to become clearer if and when binding agreements are executed.