The Trump administration has reportedly decided to abandon its plans to guarantee a minimum price for U.S. critical minerals projects amid a possible lack of congressional funding and potential market pricing complexities.
At a closed-door meeting in Washington, officials told U.S. minerals executives that their projects must be financially viable without relying on government price support, Reuters reported on Thursday, citing sources.
The White House did not immediately respond to Benzinga‘s request for comment.
The policy shift will shape future deals, but does not change the agreed price floor for MP Materials (NYSE:MP) set last July. It marks a reversal from earlier assurances by officials, who had indicated the MP Materials price floor was not a one-time measure and that broader price supports were being developed for other mineral projects.
US Ramps Up Minerals Push To Counter China
This development comes in the wake of the Trump administration’s renewed focus on domestic critical minerals, as seen in its latest investment of $1.6 billion in USA Rare Earth Inc. (NASDAQ:USAR). The move aims to reduce reliance on China, which dominates global supplies of key rare earth elements used in defense systems, electronics, and clean energy technologies.
In July, MP Materials announced a public-private partnership with the U.S. Department of War, wherein the department would invest $400 million in preferred shares, with conversion and warrant options, while MP would receive $1 billion in financing to build and develop its second U.S. magnet plant. The administration announced similar deals with Lithium Americas Corp. (NYSE:LAC) and Trilogy Metals Inc. (NYSE:TMQ).
In November, American Resources Corp. (NASDAQ:AREC), through ReElement Technologies and Vulcan Elements, announced a $1.4 billion deal to build a fully domestic rare earth magnet supply chain, including a U.S. facility producing 10,000 metric tons annually.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
Recent Comments