US Government Takes Equity Stakes in Critical Minerals Companies: How Washington's Approach Compares With China and the EU

In July 2025 the Pentagon became a major shareholder in the company that runs America’s only operating rare earth mine. The Defense Department bought $400 million of MP Materials preferred stock at $30.03 a share, with warrants, added a $150 million loan, and promised two things a market investor never would: a ten-year price floor of $110 per kilogram for the company’s neodymium-praseodymium oxide, and a ten-year commitment to buy all the output of a new magnet plant.

That deal set the pattern. In fifteen months Washington has gone from grants and loans to owning pieces of mining and processing companies. On 9 October 2026 the European Commission chose its own approach again, picking 46 more strategic raw-material projects. And China, which the whole effort is aimed at, keeps its mineral export controls on a timer.

Each of the three is using a different tool.

Washington buys in

After MP Materials came Lithium Americas. In October 2025 DOE restructured the company’s $2.23 billion loan for the Thacker Pass lithium project, deferring $184 million of debt payments. In return the department took warrants for 5% of the company and 5% of the project joint venture.

The same month, the administration announced a $35.6 million stake of about 10% in Trilogy Metals, which is exploring for copper and other metals in Alaska, rising to about 17.5% with warrants. It was tied to restored approvals for the Ambler Road that the project needs. The deal closed in August 2026. In January 2026 the Commerce Department put $277 million into USA Rare Earth, with up to $1.3 billion more in CHIPS Act loans, for a stake reported at 8% to 16%.

DOE’s own role has shifted from grantmaker to lender and restructurer. On 1 October 2025 it terminated 321 awards for 223 projects, worth about $7.56 billion. In January 2026 it said it had restructured, revised or eliminated more than $83 billion of a $104 billion loan portfolio it reviewed, including about $9.5 billion of wind and solar loans. The Loan Programs Office became the Office of Energy Dominance Financing, with more than $289 billion of lending authority available.

China already owns the chain

China’s position makes the urgency clear. By the IEA’s count it mines about 60% of the rare earths used in magnets, refines 91% and makes 94% of sintered magnets. Beijing consolidated its state rare earth producers into China Rare Earth Group in December 2021.

It has also shown it will use that position. Licensing controls on seven heavy rare earths and magnets imposed in April 2025 are still in force. A much broader package announced in October 2025, including rules reaching outside China, was suspended in November until 10 November 2026. Whether it stays suspended depends on the wider US–China truce, now extended to January.

China’s model is ownership by the state from mine to magnet, with export controls as leverage. Washington’s new model borrows the ownership part, one company at a time.

Brussels picks projects

The EU’s Critical Raw Materials Act works differently. It sets targets for 2030: 10% of the EU’s needs from domestic extraction, 40% from domestic processing, 25% from recycling, and no more than 65% of any strategic material from a single outside country. It then designates strategic projects that get faster permits and help raising finance.

The first list, in March 2025, named 47 projects in 13 member states. In June 2025 it added 13 in other countries, including Canada, Greenland, Ukraine, Serbia and the UK. On 9 October 2026 it added 46 more from 102 applications across 16 member states, with more than €2 billion mobilised under its RESourceEU plan. That makes about 106 projects in all.

Brussels lowers the barriers and steers finance, without taking stakes. That’s slower and cheaper for the taxpayer. It also leaves the commercial risk with private investors, which is exactly the risk that has kept Western rare earth projects from being built.

What the comparison shows

The American price floor is the real break with past policy. Equity gives Washington a seat at the table. A guaranteed price takes away a reason often given for why Western rare earth projects failed: Chinese producers’ ability to push prices down until competitors went under.

The cost is exposure. Washington now carries market and operating risk in a handful of companies, picked by agencies rather than investors. The EU carries less risk and moves more slowly. China carries all of it, and has for decades.

None of the three will change the supply picture by November, when China’s suspension expires. The Mountain Pass mine and its new magnet plant are the nearest test of whether owning a stake buys anything the market couldn’t.