In Critical Minerals, US Transitions From Lender To Market-Maker
A 13-page report from FTI Consulting is providing some insight on how the U.S. government has rewritten the rules for critical minerals.
Our readers have been ahead of this curve for months. We have covered the accelerating U.S. push extensively, including our heads up way back in July to keep an eye on MP Materials and USA Rare Earth Corp. Our article was immediately followed by the Pentagon investing in MP Materials and eventually the U.S. government investing in USA Rare Earth. We even noted some abnormal call buying in USAR just before the market closed the trading day prior to the government investment announcement.
USA Rare Earth (USAR) gamma squeeze (or just takeover bet): more than 8k of June $43 calls were bought for up to ~$3
— zerohedge (@zerohedge) January 22, 2026
We've been repeatedly pounding the table on the other domestic developments in the critical mineral and rare earth element base with additional coverage of Trump's Section 232 Proclamation and Project Vault.
With China already $57 billion deep in investments with their domestic copper, cobalt, nickel, lithium, and rare earth mines and processing facilities through 2021, the U.S. is grossly behind with barely $5 billion invested in similar markets so far.
Here's what FTI calls the new playbook for critical minerals…
Long-tenor debt & guarantees: DOE’s $2.3 billion loan to Lithium Americas’ Thacker Pass, restructured with warrants delivering equity upside. Multi-hundred-million EXIM letters of interest for projects like Ivanhoe Electric’s Santa Cruz copper play.
Direct equity & quasi-equity: Office of Strategic Capital’s $150M deal with MP Materials that included a 15% government stake plus long-term price floor. 10% direct stake in USA Rare Earth as part of a $1.6 billion package. Golden shares and board influence are now potential asks.
Market-shaping mechanisms: Government offtakes with price floors, the proposed $2.5 billion Strategic Resilience Reserve, and Project Vault’s $12 billion stockpile operation. Billions more via DFC into allied production in Brazil and Africa to reroute supply chains away from Beijing.
“The U.S. Government is therefore no longer just de-risking projects. It is increasingly shaping markets, prices and industrial outcomes.”
Private capital is rushing in behind the federal anchor. JPMorgan has earmarked $10 billion “to help select companies primarily in the United States enhance their growth, spur innovation, and accelerate strategic manufacturing”. The Office of Strategic Capital has already deployed over $4.5 billion. EXIM and DFC balance sheets have been weaponized. For project developers and miners, the shortest path to a bankable Final Investment Decision now runs through Washington.
This is a novel industrial policy, a sort of American-ized state capitalism. It may be necessary to counter China’s dumping and supply weaponization. But it also hands bureaucrats enormous power to pick winners, puts taxpayer capital at risk on the cap table, dilutes shareholders, and opens the door wide to cronyism and execution risk on top of the usual permitting nightmares.
Tyler Durden
Wed, 02/25/2026 – 18:10