• The Trump administration is accelerating its strategy of taking direct equity stakes in domestic critical minerals companies to reduce reliance on foreign supply chains.
  • Recent deals include a 15% stake in MP Materials, a 5% stake in Lithium Americas, and a 10% stake in Trilogy Metals, with more investments anticipated.
  • The approach, backed by new funding and executive orders, aims to bolster national security but raises questions about market distortion and financial risk.

The U.S. government is deepening its direct financial involvement in the domestic critical minerals sector, moving beyond loans and grants to take significant equity positions in key companies, according to a senior administration official. This strategy, confirmed in recent weeks, represents a marked shift in industrial policy designed to secure supply chains deemed vital to national security and economic resilience.

“We are in the business of de-risking these essential projects for the nation,” the official said, speaking on condition of anonymity because the policy is still being implemented. “An equity stake is a powerful signal of long-term commitment and aligns our interests directly with commercial success.”

The administration has already secured several notable positions. These include a 15% stake in MP Materials to support rare earth element production, a 5% stake in Lithium Americas and its Thacker Pass joint venture, and a 10% stake in Trilogy Metals for its Ambler Metals project in Alaska. The most recent move came in November 2025 with a $50 million equity position as part of a $1.4 billion public-private partnership with Vulcan Elements and ReElement Technologies.

This push is underpinned by substantial legislative firepower. Officials are drawing on a $5 billion allocation to the Industrial Base Fund, $1 billion for Defense Production Act financing, and a $2 billion fund from the One Big Beautiful Bill Act, among other resources. The financial toolkit was expanded by a March 2025 executive order, “Immediate Measures to Increase American Mineral Production,” which directed agencies to create a joint mineral investment fund.

The rationale is stark: China controls an estimated 90 percent of global rare earth refining capacity, creating a strategic vulnerability for U.S. defense and technology industries. By taking equity, the administration aims not only to provide capital but to compel production of strategically essential minerals that might otherwise be unprofitable for private companies to develop alone. “There is a recognition that the market alone will not solve this vulnerability,” the official noted.

However, the strategy is not without its critics, even within financial circles supportive of the sector’s growth. Some investors and policy analysts worry that government equity picks winners and losers in a way that could distort capital allocation. When the state takes a position in one company, it implicitly signals that unsupported competitors face higher political and financial risk. This could make early-stage investment more expensive for projects outside the government’s immediate focus and direct corporate attention toward securing political capital rather than optimizing operations.

There’s also the matter of financial risk for taxpayers. If a project fails, the government stands to lose its invested capital—a departure from traditional grant-based support. Conversely, some administration figures have suggested the government should profit from successful ventures, a notion that blurs the lines between development finance and state-led venture capitalism.

Internationally, the equity play is part of a broader, aggressive posture. In October 2025, the administration secured over $10 billion in critical mineral deals across five countries, including Japan and Australia. It also established a $150 million joint reconstruction and minerals development mechanism with Ukraine, which grants the U.S. preferential rights to mineral extraction—a clear move to secure resources beyond domestic borders.

As the U.S. Geological Survey’s updated 2025 List of Critical Minerals, now expanded to include 60 materials, guides these investments, the administration’s footprint in the sector is set to grow. The Department of Energy has nearly $1 billion in active funding opportunities for the supply chain, and more equity announcements are expected. The ultimate test will be whether this unprecedented level of direct state participation can build profitable, efficient domestic production without undermining the private market dynamics it seeks to catalyze.

*Correction: An earlier version of this article misstated the month of the Vulcan Elements partnership announcement. It was November 2025, not October.