June 3 (Reuters) - USA Rare Earth said on Wednesday it has signed agreements with the U.S. Department of Commerce giving it access to up to $1.6 billion in funding under the CHIPS Act, to support its plans to build a domestic rare earth supply chain.
The agreements follow an earlier announcement that the Trump administration would back a $1.6 billion debt-and-equity funding package for the company.
• The agreements come after CEO Barbara Humpton told Reuters in April the deal was expected to close
that month.
• Earlier this month, the company said it would invest $1.2 billion to build a magnet manufacturing and rare earth metals facility in South Carolina, as it expands domestic production capacity.
• Washington has been seeking to increase domestic output of critical minerals and reduce reliance on China, which dominates the global rare earths supply chain.
• The funding will support development of the company's Round Top project in Texas, along with processing, metal-making and magnet manufacturing operations in the United States.
• The agreement adds to a $1.5 billion private capital raise earlier this year, bringing total committed funding for the company's expansion plans to about $3.5 billion.
• USAR said it is targeting initial production at Round Top by 2028 and aims to build an integrated mine-to-magnet supply chain.
• Shares of the rare earth magnet company fell nearly 6% in morning trade.
(Reporting by Varun Sahay in Bengaluru; Editing by Shailesh Kuber)
