US to Buy Stakes in Miners to Secure Critical Mineral Supply
White House signals a strategic shift to direct equity investments in domestic mining companies, aiming to counter China's dominance in the sector.
The U.S. government is poised to become a direct investor in domestic mining operations, signaling a significant policy shift aimed at securing the nation's supply of critical minerals and challenging China's grip on the global market.
An administration official recently declared that the White House intends to acquire more equity stakes in American critical minerals companies, a move designed to de-risk major projects and accelerate domestic production of materials essential for defense, technology, and renewable energy. "We're literally buying equity, getting equity in companies to give the backing of the U.S., because that's the only way we're going to catch up with China on these things," said Jarrod Agen, Executive Director of the National Energy Dominance Council, at a recent forum in Washington.
This embrace of direct government investment marks a new phase in the economic rivalry between Washington and Beijing. For decades, China has solidified its control over the processing and supply of rare earth elements and other key minerals like lithium and cobalt. These materials are indispensable components in everything from F-35 fighter jets and wind turbines to electric vehicle batteries and smartphones.
The new strategy moves beyond traditional government support, such as grants and loans, to a model of shared ownership. This approach is intended to provide stable, long-term capital for an industry characterized by high upfront costs and lengthy development timelines. According to a Bloomberg Law report, Agen noted that such investments are becoming the "norm" as the government seeks to foster a reliable domestic supply chain.
This policy is already in motion. In November, the Office of Strategic Capital, a new body coordinating these efforts, agreed to a joint $700 million conditional loan commitment with magnet producer Vulcan Elements and ReElement Technologies. The deals include provisions for the government to receive equity warrants in the companies.
News of the intensified government focus sent ripples through the sector. Shares of Albemarle Corp. (ALB), a leading global lithium producer, jumped 6.4% in recent trading to $126.80. MP Materials Corp. (MP), the only major rare earths producer in the United States, saw its stock rise 1.9% to $62.96. The Trump administration previously invested $400 million for a 15% stake in MP Materials, underscoring the company's strategic importance.
Analysts see the government's willingness to take on investment risk as a powerful catalyst. By providing a federal backstop, the administration aims to unlock a wave of private capital that has historically been hesitant to fund domestic mining and processing projects. The long-term objective is to create a fully integrated U.S. supply chain, from mine to magnet.
While the initiative has been praised for its bold approach to a pressing national security issue, it is not without challenges. The development of new mines and processing facilities is a capital-intensive and time-consuming process, often facing regulatory and environmental hurdles. However, the administration's clear signal that it is willing to act as a foundational investor represents one of the most significant efforts to date to redraw the global map of critical resource control.