The U.S. government is planning to acquire more equity stakes in critical minerals companies, a White House official stated on Thursday.
Government investment in public companies was once unusual, but is now considered necessary to challenge China’s dominant position in supplying the rare earth materials needed for many high-tech goods from semiconductors to EV batteries.
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Government Strategy and Justification
Critical minerals are essential for products ranging from industrial magnets to batteries. They are also vital components for defense systems, such as missile guidance systems, radar, and jet engines, as well as clean energy technologies.
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Jarrod Agen, executive director of the National Energy Dominance Council, addressed a Washington forum on Thursday and said that government investments in critical industries are becoming “the norm from our perspective.”
He noted that many companies are approaching the White House as potential investments.
“They're making the right case,” Argen said, though he declined to name which company could be next, according to Bloomberg.
“We're literally buying equity, getting equity in companies to give the backing of the US, because that's the only way we're going to catch up with China on these things,” he added.
The "Stakes" Are High
Over the past year, the Trump administration has invested over $1 billion to purchase stakes in mineral and mining companies, often driving the stock prices higher.
Among the deals made are:
- MP Materials Corp. (NYSE:MP) – $400 million investment for a 15% stake
- Trilogy Metals, Inc. $35.6 million for a 10% stake.
- Vulcan Elements, Inc. – $670 million exchange for an undisclosed stake.
- Lithium Americas Corp. (NYSE:LAC) – $2.3 billion DOE loan in exchange for a 5% stake in the company and a 5% stake in the Thacker Pass project
Who Could Be Next?
Investors are interested in other rare earth producers as efforts to diversify the supply chain away from China provide government-backed tailwinds and the potential for outsized gains for domestic producers.
Listed below are additional critical mineral producers:
- Energy Fuels Inc. (AMEX:UUUU)
- Critical Metals Corp. (NASDAQ:CRML)
- TMC the metals company Inc. (NASDAQ:TMC)
- United States Antimony Corp. (AMEX:UAMY)
- USA Rare Earth, Inc. (NASDAQ:USAR)
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