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US to invest $1.6 billion into rare earths group

by UCapital MediaUCapital News newsroom1 min read
US to invest $1.6 billion into rare earths group

The US government intends to invest USD1.6 billion into Oklahoma-based miner USA Rare Earth, the Financial Times reported on Saturday.


The Trump administration will receive a 10% stake in USA Rare Earth, the FT said, citing "people familiar with the matter".


One person said Washington will buy 16.1 million shares in the miner, and warrants for an additional 17.6 million, both at USD17.17 each. It has agreed to pay USD277 million for the equity, "giving it an implied gain of USD490 [million] for the equity and warrants based on the current share price of USD24.77".


The sources expect the investment, as well as a separate private financing deal, to be announced on Monday.


USA Rare Earth, a publicly traded firm which controls "significant" heavy rare earth deposits in the US, will receive USD1.3 billion in senior secured debt financing at market rates from Washington alongside the investment, the FT said.


USA Rare Earth declined to give a comment, and the commerce department declined to discuss the transaction, the FT noted.


However, it quoted a Chips office official as saying it was "focused on onshoring critical and strategic minerals essential to the semiconductor supply chain and US national security".

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DISCLOSURE

UCapital Asset Management LLP or group companies may have commercial relationships with the companies mentioned. This content is not financial advice.

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