The US government plans to take more equity stakes in critical minerals companies, a White House official said on Thursday, calling the once-rare move necessary to counter China’s dominance in the raw materials used in everything from semiconductors to MRI machines.
“I think they’re the norm from our perspective,” US National Energy Dominance Council executive director Jarrod Agen said at a forum in Washington. “There is a broad scope of different companies who are coming to us. They’re making the right case.”
Critical minerals such as gallium and cobalt are used in products ranging from iPhones to industrial magnets. They are also vital for defense systems, including missile guidance, radar and jet engines, as well as batteries and other technologies.
Photo: AFP
Over the past year, the administration of US President Donald Trump has spent more than US$1 billion to take stakes in critical minerals and mining companies.
Among the deals are US$400 million in exchange for a 15 percent stake in MP Materials Corp, with the deal announced in July, US$670 million in exchange for a stake in magnet producer Vulcan Elements Inc and US$35.6 million for a 10 percent stake in Canadian minerals explorer Trilogy Metals Inc.
The Trump administration in September announced that it was acquiring a stake in Lithium Americas Corp, which is developing the largest lithium deposit in the country, as part of a deal to restructure a US$2.23 billion loan that the Canadian company held with the US Department of Energy.
Agen, in a brief interview, declined to specify what company could be next.
The strategy of investing taxpayer dollars in companies that the administration has deemed essential to national security comes as the US’ reliance on China for the crucial materials has become a flash point in a trade dispute.
Beijing responded to US export restrictions by curbing shipments of rare earths, a move that briefly disrupted global supplies before China eased the limits after Washington lifted its countermeasures.
“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,” Agen said in his remarks at the American Growth Summit, which was sponsored by companies such as Citigroup Inc and Nvidia Corp.
“They know the government is backing us,” he said. “No one wants to mess with President Trump and so we can actually get the materials.”
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