The Trump administration announced a $1.4 billion partnership with private investors to fund two rare earth companies, Vulcan Elements and ReElement Technologies, in a push to strengthen US control over critical minerals used in high-tech and defense industries, reports the Associated Press. The deal—comprising a $620 million Defense Department loan, $50 million in Commerce incentives, and $550 million in private funding—aims to boost domestic production and recycling of rare earth materials, reducing reliance on China, which dominates global supply. The announcement follows President Trump’s meeting with Chinese leader Xi Jinping, where both agreed to ease tariffs and export restrictions on rare earths. Critics have raised concerns over the government’s growing direct investments in private firms, though officials argue the move is vital for securing the US supply chain for technologies used in fighter jets, smartphones, and renewable energy systems. The AP writes:
The Trump administration and private investors are partnering with two rare earth startups in a $1.4 billion deal to scale up the nation’s access to materials and technology that is crucial for producing an array of high-tech goods and military equipment.
The investment in Vulcan Elements and ReElement Technologies is the latest stake taken by the U.S. in a handful of private companies — including another rare earths company and chipmaker Intel — since President Donald Trump began his second term in January. The White House has made it a priority to bolster the nation’s supply chain in a market dominated by China. […]
“Our investment in Vulcan Elements will accelerate U.S. production of rare earth magnets for American manufacturers,” Secretary of Commerce Howard Lutnick said. “We are laser-focused on bringing critical mineral and rare earth manufacturing back home, ensuring America’s supply chain is strong, secure and perfectly reliable.” […]
In July, the Defense Department agreed to invest $400 million in shares of the Las Vegas-based MP Materials, which runs the only American rare earths mine. The unusual direct investment in the company made the government the largest shareholder in MP Materials. […]
While it’s not unprecedented for the government to offer financial support to business and industries, historically those investments usually came during major economic crises.
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