The Trump administration is urged to secure multiple agreements with U.S. miners to safeguard the nation’s supply chain from China, according to Mark Chalmers, CEO of Energy Fuels, a company specializing in uranium and rare earth minerals.
Chalmers highlighted the Pentagon’s recent decision to take an equity stake in MP Materials, the largest U.S. rare earth miner, as a surprising yet necessary move. This action aims to diversify the U.S. supply chain and mitigate risks associated with relying on a single national champion.
“One company doesn’t fix it,” Chalmers stated regarding the MP Materials deal. “You have to have multiple deals to ensure that you don’t just have the company risk, because all companies aren’t going to deliver.”
A Trump administration official noted that while the White House is open to other deals involving equity stakes or price floors similar to the MP Materials agreement, not every initiative will follow that model.
Rare earth elements are crucial for various applications, including weapons systems like the F-35 warplane and consumer electronics such as electric vehicles and smartphones. In 2023, the U.S. was heavily reliant on China, which supplied 70% of its rare earth imports, according to the U.S. Geological Survey.
Ryan Castilloux, founder of Adamas Intelligence, pointed out that China has manipulated the market by suppressing prices to eliminate Western competition. The MP deal signifies the U.S. willingness to adopt strategic capitalism to counter China’s influence.
Possible Rare Earth Targets
Since the MP deal on July 10, Energy Fuels’ stock has surged nearly 200%, as investors speculate it could be a target for further government deals. Other critical mineral miners like NioCorp Developments and Ramaco Resources have also seen significant gains.
As MP Materials develops a second facility for magnet production under the Defense Department deal, it will likely require more heavy rare earths, which are essential for high-temperature applications in electric vehicle motors and defense technologies.
Energy Fuels, headquartered in Denver, is the largest uranium miner in the U.S. and is establishing a rare earth operation through its global acquisitions. Chalmers emphasized the importance of providing products that appeal to the U.S. government, complementing MP Materials’ strengths.
“The government cannot bet on one horse — it just doesn’t make sense,” Chalmers remarked, highlighting the company’s efforts to communicate its strategy to decision-makers in Washington, D.C.
Trump Eyes Lithium
Other critical minerals, including lithium, cobalt, and graphite, are also prime candidates for federal investment to stabilize price fluctuations affecting U.S. miners, according to Rich Nolan, CEO of the National Mining Association. These minerals are vital for battery production and other applications.
The Trump administration has proposed an equity stake in Lithium Americas, which is renegotiating a $2.2 billion loan from the Department of Energy for its Thacker Pass mine in northern Nevada. This mine is projected to become one of North America’s largest lithium sources, with operations expected to commence in late 2027.
Following news of the potential government stake, Lithium Americas’ stock surged over 90% this week.
Albemarle CEO Kent Masters indicated that a deal similar to the MP agreement could be applicable to the lithium sector, aiming to encourage private industry investment.
Masters pointed to Apple‘s offtake agreement with MP, which followed closely after the Defense Department deal.
Miners Seek Price Floors
Establishing a government equity stake may be necessary to stimulate the market, but the price floor set by the Pentagon in the MP deal is crucial for enabling private industry investments and expanding the supply chain, according to Masters.
Price support from the federal government sends a clear market signal that these investments are long-term and sustainable, emphasized Nolan from the National Mining Association.
Under the MP agreement, the Pentagon established a price floor of $110 per kilogram for neodymium-praseodymium oxide (NdPr), a vital component in rare-earth magnets. The government compensates MP for the difference when market prices fall below this threshold, while also claiming 30% of any profits when prices exceed $110.
Following the MP deal, NdPr prices surged by 40%, illustrating the effectiveness of the price floor strategy. Castilloux noted that this approach serves as a model for any market where suppressed pricing undermines competition against the U.S. and its allies, indicating a path to break free from China’s artificially low prices.
