Clifford Chance advises U.S. Department of Commerce CHIPS Program Office on federal incentives to USA Rare Earth

Clifford Chance advises U.S. Department of Commerce CHIPS Program Office on federal incentives to USA Rare Earth

Global law firm Clifford Chance advised the U.S. Department of Commerce CHIPS Program Office (the "Department") on an award to USA Rare Earth (USAR) of federal incentives up to US$1.6 billion, consisting of a loan agreement for up to US$1.3 billion and direct funding of US$277 million under the CHIPS and Science Act. In connection with the transaction, USAR issued to the Department 16.1 million shares of common stock and a warrant for the right to purchase an additional 17.6 million shares of common stock.

These agreements will help support USAR's construction, expansion and modernization of rare earth mineral mining, processing, and metal and magnet production facilities across the US.

The team advising on the transaction was led by Energy and Infrastructure partner Peter Hughes and Corporate partner Matthew Warner. They were supported by counsel Lauran Smith, legal consultant Edward Charlton-Jones, and associates Andrew Cotton and Anna O'Neil, on the direct funding and loan, and partner Om Pandya, associates Peter Guinnane and Daviel Rodriguez, and law clerk Kayla He on corporate and securities matters.

Hughes said, "We are grateful for the opportunity to advise the Department on this transaction. Rare earth minerals are critical for manufacturing the technologies that reinforce US economic and national security. The federal incentives from the Department will strengthen domestic semiconductor capabilities."

Clifford Chance also advised the Department on three CHIPS Act transactions in 2025.