The Trump administration is preparing to acquire a 10% stake in USA Rare Earth, a mining company that controls one of the largest rare-earth deposits in the United States, according to a source briefed on the $1.6 billion transaction. While the news has nothing to do with Hollywood or streaming services, it matters deeply to every sector that depends on high-performance electronics—from electric-vehicle makers to the studios that render CGI blockbusters.
The Deal: A $1.6 Billion Investment
Under the terms now being finalized, the federal government will pay roughly $160 million for its minority position in USA Rare Earth. The company’s flagship asset is the Round Bottom mine in North Carolina, a deposit rich in neodymium, praseodymium, and other elements used to manufacture electric-vehicle batteries, wind-turbine magnets, and the tiny speakers inside smartphones.
By taking a direct equity stake, the administration hopes to pry the U.S. rare-earth supply chain away from China, which currently refines more than 80% of the world’s output. The move also creates a potential buffer against sudden export restrictions or price spikes that have rattled tech manufacturers in recent years.
Implications for the Tech and Entertainment Industries
Every advanced display, camera stabilizer, or VR headset relies on rare-earth phosphors and magnets. A stable domestic source would give U.S. hardware designers fresher data on pricing and availability, allowing them to lock in component costs years ahead of launch. Studios that render visual-effects sequences on thousands of graphics cards stand to benefit as well; each card contains small but critical amounts of rare-earth elements.
Beyond cost, the deal addresses a security concern. When China limited rare-earth exports to Japan in 2010, the price of some oxides jumped 700% within weeks. A similar disruption today would ripple through every supply chain that touches precision optics, lasers, or hard-drive actuators—key gear for both cloud data centers and on-set production workflows.
Rare Earth Elements: A Critical Component
The 17 elements classified as rare earths are neither rare nor earths, but they are difficult to separate and refine. Their unique magnetic, luminescent, and electrochemical properties make them indispensable for miniaturized electronics, fiber-optic cables, and the permanent magnets that turn rotational energy into electricity. As global demand rises—driven by electric mobility, offshore wind, and 5G infrastructure—the U.S. Geological Survey now lists several REEs as “critical minerals,” meaning they face both supply risk and rising importance to the economy.
The administration’s equity injection is designed to accelerate construction of a fully integrated mine-to-magnet supply chain at Round Bottom. If successful, the site could begin producing separated oxides by 2026 and metal alloys soon after, trimming delivery times that currently stretch from Chinese ports to U.S. factories by as much as eight weeks.
Rare Earth Elements: The Unsung Heroes of Modern Technology
Neodymium-iron-boron magnets—each containing about 30% neodymium and praseodymium—deliver the magnetic force required to spin an iPhone’s taptic engine or the gimbal motors on a cinema drone. Terbium and europium create the red and green phosphors in 4K OLED screens, while yttrium improves the shock-resistance of the ceramics used in studio LED lighting panels.
Although alternative magnet chemistries exist, none match the strength-to-weight ratio of sintered NdFeB. That reality keeps designers tethered to a supply chain dominated by Chinese refineries. The Energy Department projects global demand for neodymium oxide will rise 50% by 2025, even as geopolitical tensions increase the likelihood of export quotas.
Reducing Dependence on Chinese Imports
China’s market dominance is not simply a matter of geology; it reflects three decades of state investment in separation plants that can handle the complex solvent-extraction circuits required to isolate individual rare-earth oxides. The U.S. shut down its last major separation facility in 1998, leaving manufacturers few options when Beijing tightened export permits.
USA Rare Earth plans to restart a shuttered separation plant in Colorado and pair it with the new North Carolina mine. If both reach name-plate capacity, they could supply roughly 20% of U.S. annual demand for separated rare-earth oxides, cutting import reliance on China from 70% to roughly 55% within five years, according to company projections confirmed by the U.S. Geological Survey.
The Future of Rare Earth Production
MP Materials already ships concentrated ore from its Mountain Pass mine in California to China for refining, but it is building its own separation unit on site, targeting 2025 production. Texas Mineral Resources and Lynas Rare Earths have proposed similar U.S. facilities, while Pentagon grants are helping finance pilot plants that recycle magnets from hard-disk drives and wind turbines.
Investment bank Jeffries estimates that Western miners and chemical processors will commit more than $5 billion to rare-earth capacity by 2030, a figure that includes the administration’s new $160 million stake. The goal is not self-sufficiency—U.S. reserves account for only 13% of global totals—but enough domestic capacity to survive a six-month disruption of Chinese exports.
| Company | Project | Location |
|---|---|---|
| USA Rare Earth | Round Bottom | North Carolina |
| MP Materials | Mountain Pass | California |
| Lynas Rare Earths | Heavy Rare Earths Plant | Texas |
The administration’s move does not guarantee success; rare-earth projects are notorious for cost overruns and technical setbacks. Still, by taking an equity position rather than merely offering loans, the government signals that it views rare-earth capacity as a strategic asset—one worth sharing both the profits and the risks of bringing a new mine online.