Trump Administration Takes Equity Stakes to Break China Rare-Earth Monopoly

The Federal government of the United States is implementing a strategy of strategic capitalism and industrial policy to end China's global monopoly over rare-earth elements, which currently controls nearly 90% of the world's refined supply. In response to Chinese export restrictions and market price suppression, the administration has departed from free-market principles to provide hundreds of millions of dollars in loans and direct investments.

Central to this effort is a partnership with MP Materials, where the U.S. Department of Defense took a 15% equity stake via a $400 million investment. To protect the supplier, the government established a price floor of $110 per kilogram for neodymium-praseodymium oxide. Further federal support includes a $620 million loan for Vulcan Elements and an $80 million loan for ReElement Technologies, which uses a chromatography-based filtration process to recycle rare earths more efficiently.

The administration is considering additional equity stakes for other miners, including Lithium Americas as it renegotiates a $2.2 billion Department of Energy loan for its Thacker Pass mine in Nevada. These moves follow decades of Chinese state-led strategies to consolidate control over the value chain, including the acquisition of U.S. technology. While the U.S. aims for self-sufficiency, analysts from Goldman Sachs suggest China's dominance remains strong, noting that some domestic facilities may not be operational until 2028.