USA Rare Earth stock is soaring on news that the Trump administration is taking a stake in the mining company

• USA Rare Earth stock surged on Monday on news of an investment from the US Department of Commerce.
• The company will extract critical minerals from its Round Top mine in West Texas by 2030.
• This move aligns with the White House strategy to boost America's supply of rare earth materials.

The move: USA Rare Earth stock jumped 20% on Monday, extending its rally from the previous Friday's close. The rare earth mining and manufacturing company has already had a strong start to 2026, with year-to-date gains of 108%.

Why: On Monday, USA Rare Earth announced that it had entered into a non-binding letter of intent with the US Department of Commerce, as part of a collaboration with the US Department of Energy to award the government agency an equity stake.

Under the agreement, the company will receive a $1.3 billion loan from the Commerce Department, as well as $277 million in federal funding. In return, USA Rare Earth will issue 16.1 million common shares and 17.6 million warrants to the department.

The agreement says that by 2030, the rare earth miner will be extracting 40,000 metric tons of critical mineral feedstock from its Round Top deposit on a daily basis. Located in Hudspeth County, West Texas, the mine is expected to begin production in 2028.

What it means: It's the latest development in the Trump administration's push to strengthen America's domestic supply chain of critical materials and become less dependent on foreign producers. The administration has taken stakes in firms across a handful of industries, with Trump pushing for more government involvement in industries he deems crucial to US security.

As the AI boom greatly increases the need for critical minerals and rare earth elements, the White House has taken stakes in other US-based mining companies, including MP Materials, Critical Metals, and Lithium Americas. All three mining stocks also rose on the news on Monday.

This tactic of taking stakes in private firms has sparked significant momentum for mining stocks, turning the industry into one of the hottest trades of 2025. This trend looks poised to continue into 2026 as the White House adds another domestic miner to its portfolio.

"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 U.S. national security, global economic competitiveness, and critical technologies of the future," stated Barbara Humpton, USA Rare Earth CEO.

Secretary of Commerce Howard Lutnick praised the news, emphasizing the importance of ensuring that the US supply chain is not dependent on foreign countries.

"USA Rare Earth's heavy critical minerals project is essential to restoring U.S. critical mineral independence," he said.