As strategic pillars for the clean energy transition and defense security, the supply chain autonomy of critical minerals has become a core issue in the competition among major powers. Faced with the triple dependence dilemma of the U.S. critical mineral supply chain in the dimensions of "resources-technology-processing," the Trump administration elevated the security of critical minerals to the core level of national strategy, treating equity investment as the core intervention tool. It attempted to break through the industrial bottleneck and achieve the dual goals of resource control and industrial returning through three dimensions: direct equity participation in mining companies, policy tools, and industrial ecology. This dual intervention model, which is neither a pure market adjustment nor a direct administrative order, has become a landmark measure for the United States to reconstruct the supply chain of critical minerals.
01 The structural dilemma of the supply chain of key minerals in the United States
Critical minerals cover more than 50 strategic mineral resources including rare earths, lithium, cobalt, gallium, etc., which are indispensable raw materials for core industries such as electric vehicle batteries, semiconductor chips, and advanced weapon systems. According to the data from the U.S. Geological Survey (USGS) in 2025, the United States relies entirely on imports for 12 critical minerals, and 29 others have an import dependence of over 50%. Among them, rare earths and graphite, etc., are locked in a three-in-one dependence on China's "resources-technology-supply chain".
1. Security risks from external dependence. The "chokepoint" issue in the key mineral processing link is particularly prominent in the United States: 70% of rare earth imports come from China, 59% of natural graphite relies on China's supply, 45% of lithium battery-grade imports come from China, and the import dependence of key semiconductor materials such as gallium and germanium is close to 100%. After China implemented export restrictions on medium and heavy rare earths in 2025, it directly impacted the production line of the F-35 fighter jets in the United States; the export control of antimony led to a reduction in the production capacity of American ammunition companies, highlighting the vulnerability of the supply chain. This dependence has already been transformed into real security risks in geopolitical games, and traditional subsidies can only stimulate short-term import substitution and cannot fundamentally cure the problem of industrial chain independence and control.
2. Systemic decline of domestic industrial ecology. Industrial hollowing has become the core bottleneck restricting the autonomous supply of key minerals in the United States. Since the 1980s, the relocation of industries driven by cost has caused the US aluminum processing capacity to shrink from 30% of the global total to less than 5%. The lack of application scenarios has gradually led to the loss of rare earth separation technology, and currently, China's separation cost is only 1/3 of that in the United States and has mastered core patents. More seriously, mining projects face "approval-capital-talent" triple constraints: The National Environmental Policy Act has led to an average approval time of 7-10 years for projects, far exceeding Canada and Australia; the capital market prefers tech stocks, and in 2024, the total market value of the "Big Seven" in the United States was 50 times that of all gold stocks, and mining investment fell to the lowest level since 1990; the average age of industry engineers is over 55, and the number of students in related majors has decreased by 40%, forming a technological heritage gap.
3. The failure of traditional policy tools.The Biden administration's fiscal subsidy and loan policies have revealed their limitations. Although American Lithium has received a $2.26 billion loan from the Department of Energy, the project is progressing slowly and is not expected to be commissioned until 2028; even with subsidies, MP Materials' rare earth processing project still relies on key materials such as Chinese extractants. This "blood transfusion" subsidy is difficult to solve deep-seated problems such as delayed project approval, insufficient continuous capital investment, and the absence of industrial chain collaboration, and the efficiency of the use of funds has been criticized, prompting policymakers to seek more binding intervention methods.
02 A diversified policy mix with equity investment at its core
The Trump administration aims to prioritize "national security" and breaks through the "market-oriented" policy framework formed since the Reagan era, shifting the policy tools from loan subsidies by the Department of Energy in the Biden administration to a deep intervention model of direct government ownership of mining projects. To ensure the implementation effect, a three-dimensional intervention system of "equity investment + policy tools + supporting mechanisms" is constructed to intervene in the entire chain of the supply chain of key minerals.
1. Adjust and supplement the existing legal system. Activate the authorization of the Defense Production Act, incorporate the enhancement of critical mineral production capacity into the scope of national security, and provide a legal basis for equity investment. The OBBA Act appropriates $7.5 billion for critical minerals: $2 billion for expanding the national stockpile before 2027, $5 billion for supply chain investment, and $500 million for credit programs. Convert the subsidy funds of the CHIPS and Science Act into equity, reallocate at least $2 billion to fund critical mineral projects, and form an "equity investment + rights attachment + industrial chain binding" operational framework. Adjust the tax credit policy of the Inflation Reduction Act, provide additional tax preferences for equity investment projects, and reduce market risks for enterprises through government underwriting, price floor commitments, etc.
2. Establish a critical minerals investment fund.According to a report by major Western media on September 16, 2025, the United States is in negotiations to establish a $5 billion critical minerals investment fund, focusing on strategic mineral projects worldwide. The U.S. International Development Finance Corporation (DFC) is in talks with the New York-based investment company Orion Resources Partners (ORP) to form a joint venture to operate the fund. The proposed cooperation model involves equal contributions and gradual expansion to a total of approximately $5 billion. If ultimately established, the fund would become the most significant measure by the U.S. government to increase the supply of critical minerals through transaction matchmaking, and it would also mark the first direct participation of the U.S. government in large mineral transactions.
3. Domestic strategic mineral investment. In July 2025, the Department of Defense acquired a 15% preferred stock stake in the US's largest rare earth producer, MP Materials, for $400 million, becoming the company's largest shareholder. The department also signed a 10-year, floor-priced purchase agreement with the company and provided a $150 million loan to enhance heavy rare earth separation capacity. In September, the Department of Energy negotiated a conversion of a $2.3 billion loan for the Thacker Pass lithium mine project in Nevada, owned by American Lithium, into a 5-10% equity stake in the company, potentially becoming its largest shareholder. The project's first phase could replace 80% of current lithium imports, significantly reducing dependence on the supply chain.
4. Cross-border equity integration of supply chains. Targeting Canada, a major exporter of critical minerals, the Trump administration implemented a cross-border stakeholding strategy. The Department of the Interior acquired a 10% stake in Canada's Trilogy Metals company for $35.6 million and obtained warrants for an additional 7.5% stake, while overruling the Biden administration's veto and approving the Ambler Road project, which connects the Alaska mining area, releasing the potential of defense-critical minerals such as copper, cobalt, and gallium. The acquisition of a 5% stake in Lithium Americas Corporation, headquartered in Vancouver, secured the supply rights of its lithium deposits in Nevada. This "equity binding + infrastructure matching" model effectively integrates Canada's mineral resources into the U.S. supply chain system.
5. Extend shareholding to penetrate the industrial chain. The Trump administration's shareholding strategy has extended beyond the mining link to the upstream and downstream: Purchasing Intel for $8.9 billion to become the largest single shareholder, demanding that chip companies such as Nvidia and AMD turn over 15% of their sales revenue to the government in China in exchange for export licenses; Interfering in multinational mergers and acquisitions by obtaining "golden shares" in US Steel; and even planning to purchase shares in defense companies such as Lockheed Martin ; demanding that General Motors provide lithium purchase guarantees for the Thacker Pass project, forming a "mining-process-applying" vertical integration ecology. This full-chain shareholding model forms a policy feedback loop of "mineral mining-material processing-terminal manufacturing", enhancing the strategic value conversion of key minerals.
6. Establish national strategic mineral reserves.Referencing the strategic petroleum reserve mechanism, establish a critical mineral acquisition and storage system. In September 2025, the American Antimony Corporation obtained a five-year exclusive contract from the US Defense Logistics Agency (DLA), with a maximum amount of up to US $245 million, to supply antimony metal ingots for defense reserves to supplement the defense material reserve. In October, DLA's public documents stated that it had begun using funds approved by the "Big and Beautiful Act" to purchase up to US $1 billion in critical minerals, the proposed transaction volume exceeded the annual production and import volume of the United States, and the purchasing price was also higher than market expectations. In addition to rare earths, the mineral products purchased this time also include cobalt, antimony, tantalum, and scandium. On the other hand, the Trump administration is also considering developing the Pacific Ocean seabed, which is rich in elements such as nickel, cobalt, copper, and manganese.
03 Dual drive of strategic interests and instrumental rationality
The policy leap from subsidies to equity participation is essentially a strategic choice made by the Trump administration based on strategic security needs and policy effectiveness considerations, with multiple driving factors at play.
1. Strategic upgrade of supply chain control. Compared with indirect guidance through subsidies, direct participation gives the government substantive influence over projects. Through shareholding, the US government can directly or indirectly influence corporate board decisions, such as its stake in Trilogy Metals securing a board seat nomination right, and its participation in American Lithium ensuring priority supply of lithium resources to domestic battery companies. This "super shareholder" status allows the US to secure resource supplies amidst geopolitical conflicts and achieve the strategic goals of "resource autonomy-process control-manufacturing safety" without relying on foreign entities.
2. Precise Enhancement of Policy Effectiveness.The equity participation model effectively solves the inherent defects of subsidy policies: First, it reduces moral hazard by binding the equity, preventing enterprises from using subsidy funds for non-production links; Second, the government can share project benefits, forming a virtuous cycle of "input-return", which is different from the one-way expenditure of subsidies; Third, by using equity conditions to break through environmental and approval obstacles, such as promoting the restart of the Ambler Road project through equity participation, solving the long-lingering infrastructure bottleneck; Fourth, a federal-government supported sovereign risk insurance fund is proposed, if the government cancels the approved project through administrative means in the future, the enterprise can get full compensation, solving the investment concerns caused by insufficient policy continuity. This advantage is particularly prominent under the characteristics of long cycle and high risk of mining projects.
3. A powerful lever for the reshoring of industries.Faced with the current sluggishness in mining investment, government participation has played the role of a "confidence anchor." The news of the government's participation in America's Lithium sent the stock price soaring 98.7% after the market close, and the stock price of Trilogy Metals surged by more than 250%, attracting private capital to follow suit and alleviating the bleeding situation of mining investment. In the process of the Department of Defense's acquisition of a stake in MP company and financing, banks such as Morgan Stanley and Goldman Sachs followed up with a $1 billion investment. In October 2025, Morgan Stanley issued a statement, promising to invest $1.5 trillion in 27 sub-sectors, including mining, refining, solar and nuclear energy, battery storage, and military supplies, over the next 10 years. The capacity layout of companies such as U.S. Steel and Lockheed Martin has shifted towards the domestic market, forming a synergistic effect with mineral development.
4. Learning from historical experience.During the 2008 financial crisis, the U.S. government's successful experience in crisis assistance, such as注资General Motors and Citigroup, provided a reference for this policy shift. The Trump administration transformed emergency measures during special periods into normalized industrial policies, believing that government shareholding plays an irreplaceable role in the "market failure" field, especially in critical minerals, which have both commercial attributes and strategic value, to effectively balance short-term benefits and long-term security.
04 The Double Game of Returns and Risk
The Trump administration's stakeholding policy has generated multiple challenges in the domestic market, international relations, and implementation level, while also triggering immediate effects, forming a complex game of gains and risks.
1. Short-term boost and long-term concerns coexist at the domestic level.The positive effects of policies have initially shown: the efficiency of mining project approval has significantly increased, and the Ambler Road and other shelved projects have been quickly restarted; the financing environment for enterprises has improved, and companies such as MP Materials and American Lithium have received stable financial support; the surge in stock prices has driven the repair of industry valuations, attracting tech capital to cross-over into the mining sector. Potential risks are equally prominent: the dual identity of the government as both a "regulator" and a "shareholder" creates conflicts of interest, which may lead to policies favoring participating enterprises, damaging the fairness and competition of the market; ongoing environmental disputes, with the Thacker Pass lithium mine and the Ambler Road project both facing protests from Indigenous people and litigation from environmental protection organizations, may delay the progress of project implementation.
2. Supply chain restructuring and the crisis of trust among allies at the international level.In terms of supply chain restructuring, the United States has included Canada, Mexico and other North American countries in its "resource circle of friends" through shareholding, attempting to build a mineral supply chain "de-coupled" from China. However, the new policy has provoked a strong reaction from allies: Canadian experts warn that the U.S. government's shareholding in companies such as Trilogy Metals may lead to the loss of sensitive technology and the preferential supply of resources to the United States, calling for a national security review. At the same time, the rebound of resource nationalism is also weakening the resilience of the supply chain, such as the Democratic Republic of the Congo's refusal to hand over cobalt mining rights to U.S. companies, and Indonesia's forced localization investment by means of nickel export restrictions.
3. The operational complexity and uncertainty at the implementation level are highlighted.The implementation of policies faces multiple realistic obstacles: First, the valuation dilemma, the resource reserve assessment of mining projects is highly uncertain, and the government's holding ratio and pricing lack unified standards, which may trigger conflicts of interest; Second, the lack of an exit mechanism, the holding of General Motors in 2008 took years to reduce, while the cycle of mining projects lasts for 20-30 years, and the government's long-term holding may solidify administrative intervention; Third, the conflict with international rules, the participation of the United States for "national security" reasons is in conflict with the anti-subsidy rules of the WTO, which may trigger retaliatory measures from other countries; Fourth, the risk of policy inconsistency, equity investment projects rely on long-term investment, and if future government changes lead to policy diversion, it will directly impact the sustainability of the project.
The Trump administration's intervention in key mineral control through equity essentially represents a strategic marriage of "national capital + market forces" in the context of great power competition. This policy breaks away from the traditional resource management model but also faces the triple constraints of cost, environment, and technology, revealing new trends in the governance of critical minerals: resource security is shifting from "trade access" to "capacity building," policy tools are evolving from "indirect incentives" to "deep engagement," and global cooperation is moving from "free trade" to "alliance coordination." The future global pattern of critical minerals will feature "multiple suppliers, alliance competition, and technological breakthroughs," and how to balance ensuring their own security with maintaining the stability of the global supply chain has become a common challenge for all countries.
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