- The U.S. is exploring a $5 billion mining investment fund, which would represent its largest direct involvement in securing critical minerals.
- This initiative aims to address concerns about mineral supply chains, given China’s dominance in processing and expanding abroad.
- Shares of rare earth companies like MP Materials and USAR have surged following the news of potential government backing and past successful partnerships.
The US is weighing the creation of a $5 billion mining investment fund, which would mark its largest step yet into direct dealmaking to secure critical minerals, according to a Bloomberg report out this morning.
As a result, shares of rare earth companies MP Materials and USAR are both surging higher on the news…
Ironically, the amount proposed is about half of what we suggested earlier this summer…
Bloomberg writes that the US International Development Finance Corp. (DFC) is in talks with New York–based Orion Resource Partners to form a joint venture, though terms are still under negotiation and no deal is certain.
The proposed structure would see both parties contribute equally, scaling toward a combined $5 billion—similar to Orion’s $1.2 billion partnership with Abu Dhabi’s ADQ earlier this year.
Orion, which manages about $8 billion across mining-focused private equity, credit, and trading, has argued governments must play a bigger role in critical minerals markets, echoing China’s strategy of building stockpiles.
The initiative reflects rising concern over mineral supply chains. China dominates processing of metals such as copper, cobalt, and rare earths while its companies expand aggressively abroad. Longer-term forecasts point to shortages driven by weak investment, declining ore grades, and slow permitting.
The DFC, created late in Trump’s first term, has already backed mining ventures from Mozambique to central Africa, including a $150 million loan to Syrah Resources (a Tesla supplier) and $550 million for rail upgrades on the Lobito Corridor. A $2.5 billion commitment to Orion would be the agency’s biggest to date.
MP Materials’ stock surge since the beginning of this year has been dramatic.
On the day the Pentagon’s investment was announced, MP shares surged more than 50% as investors priced in the guaranteed revenue and government backing. In the days that followed, the stock rallied further after Apple revealed a $500 million supply deal with MP, ultimately pushing the company’s year-to-date gains to well over 200–250% by mid-July.
In the last 12 months, shares are now up more than 370%.
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