Where does Trump's critical minerals strategy go from here?

The US push to reduce its reliance on China's critical minerals is still expected to move at pace, even as congressional scrutiny into mining companies backed by President Donald Trump's administration rattles the industry.

The Trump administration has dedicated billions of dollars to companies across the minerals supply chain using several agencies and financing tools – including by taking equity stakes. Even before this week's midterm sweep, Democrats put a handful of these companies on notice for potential conflicts of interest related to the Trump family and Commerce Secretary Howard Lutnick.

“There'll be investigations, that's for sure,” said Ian Lange, a professor at the Colorado School of Mines and a former senior economist at the Council of Economic Advisers during Mr Trump's first term.

Among those named in letters by Democratic lawmakers is USA Rare Earth, which secured a $1.6 billion deal with Commerce in January in exchange for the government taking a 10 per cent equity stake in the mining company. To close the deal, USA Rare Earth raised $1.5 billion in a private offering and tapped Cantor Fitzgerald, Mr Lutnick's company now run by his son, as the deal's placement agent.

In November, rare earth start-up Vulcan Elements was awarded a $620 million conditional loan commitment from the Defence Department and an additional $50 million from the Commerce Department, months after attracting $65 million in private capital, including from a venture firm backed by Donald Trump Jr.

US media have also reported tungsten miner Kaz Resources received a total of $1.6 billion financing package from the Export-Import Bank and Development Finance Corporation for projects in Kazakhstan. The US-based company counts Mr Trump Jr and Eric Trump as passive investors, and plans to go public next year.

“Since 2023, we have worked closely with US officials to secure a generational asset that will secure an independent tungsten supply chain for the West. We are grateful for the support we continue to receive and welcome any questions from US officials,” Cove Kaz said in a statement.

USA Rare Earth and Vulcan did not respond to The National's requests for comment.

Show caption: Wheel loaders fill lorries with ore at the MP Materials rare…

Those within the industry argue the political fallout from the midterm elections should not overshadow efforts to secure the minerals considered essential to energy and national security, a view widely shared along party lines.

“Don't treat your entire critical minerals deals from the Trump administration as one big pot of corruption. Because number one, it's not true, and number two, if that happens, we are putting risk on the sector that could last several years in terms of losing appetite for investment,” said Tom Moerenhout, who leads the critical minerals initiative at Columbia University's Centre on Global Energy Policy.

And despite the threat of congressional scrutiny weighing on the mining industry, it remains unlikely the Trump administration will slow down its various financing tools across government agencies to announce deals.

“I don't really think that Congress is going to say we're going to shut off the tap to you guys,” Mr Lange said.

And Mr Moerenhout said that only $8 billion of the roughly $30 billion in projects announced by Mr Trump have been disbursing money.

“We still have projects in the pipeline that the government will continue to support, and we will see those announcements coming out in the next couple of months,” he said.

So far, most deals the US government has taken in its critical minerals shopping spree have been made through the Pentagon, underlining how the administration's perspective on securing minerals through its defence industrial base.

The Defence Department has used equity stakes, warrants, loans and other tools to secure deals with at least eight companies across the minerals supply chain, according to a Council on Foreign Relations tracker. This includes a $400 million arrangement for a 15 per cent equity stake in MP Materials, a $174 million equity financing agreement with Alcoa on a gallium project, and a multibillion partnership alongside Commerce with Korea Zinc on a critical minerals smelter in Tennessee.

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“I'm very interested to see how those buckets of capital and authorisations evolve, what structures Congress is willing to contemplate, and particularly how Congress and folks in the administration view price support or price bifurcation measures going forward,” said Ashley Zumwalt-Forbes, non-resident fellow at the Baker Institute.

Despite the billion-dollar critical minerals drive, experts still argue China remains the supply chain's undisputed dominant force. Beijing accounts for roughly 60 per cent of global mined production of magnet rare earths, and 91 per cent of global refined output, according to the International Energy Agency.

“We have a real need for these things to succeed, and if public or private markets are not willing to invest the capital, to me it makes sense for the federal government to step in to provide access to capital at a lower rate, so that these projects can actually move forward,” said Ron Lembke, a professor at the University of Nevada Reno.

And years-long negotiating over an energy permitting reform bill could also remove some roadblocks for mining projects typically viewed as capital-intensive, take decades to become operational and are generally risky.

Still, proponents argue it does not go far enough in tackling refining and processing.

“There's no one silver bullet that you just pass this and suddenly everything is super easy,” said Rachel Ziemba, founder of Ziemba Insights advisory firm.

Lawmakers also missed the window to pass the bill before this month's midterms, leaving its fate on precarious positioning heading into the lame-duck session.

Pouyan Kimiayjan, director of the applied geopolitics and strategy programme at the Institute for Peace and Diplomacy, said it is going to be a challenge for Democrats striking a balance between pushing through permitting reform and investing some of the mining deals backed by the Trump administration.

“This critical mineral strategy cannot obviously operate on a four-year political cycle when mining and processing projects take often a decade or more to to develop,” he said.

Upcoming summits within the G7 and Quad will also offer new clues on the administration's next steps, while Mr Trump is scheduled to attend the Asia-Pacific Economic Co-operation (Apec) summit in China later this month. A US-China trade truce extended the suspension of China's export controls on rare earths and critical minerals until January.

“Everything going on reinforces Trump's interest in extending the truce with China, and and and the Chinese have an interest in doing that as well,” Ms Ziemba said.