Trump Mulls More Direct Investment in Critical Minerals

Core Insights - The U.S. Department of Defense has made a significant investment in MP Materials, marking a major federal intervention in the rare earths sector, aimed at establishing a domestic magnet supply chain and securing long-term pricing support for neodymium-praseodymium [1][3] Group 1: MP Materials and Market Impact - MP Materials' shares have surged 330% year-to-date, with other rare earth companies also experiencing substantial gains, such as NioCorp Developments at 332.2% and Ramaco Resources at 214.5% [2] - The Pentagon's investment includes a 15% equity stake through a $400 million preferred share issuance and a $150 million loan, alongside $1 billion in private financing from JPMorgan and Goldman Sachs [3] - A $110/kg floor price guarantee for NdPr magnets has been established, nearly double the current spot price of $63, creating a favorable margin environment for domestic producers [4] Group 2: Broader Industry Developments - The Trump administration is considering further investments in critical minerals, including a proposed equity stake in Lithium Americas, which is negotiating a $2.2 billion loan for its Thacker Pass mine [5] - Energy Fuels' CEO emphasizes the need for multiple investments to reduce dependence on a single company for critical minerals supply, with the White House open to similar deals as with MP Materials [6]