*This post has been corrected to reflect the fact that JP Morgan did not invest in MP Materials as the original version stated, but rather advised on the transaction with DOD and extended a $1 billion credit facility to MP alongside Goldman Sachs.

Last week, I started discussing the Trump Administration’s approach to critical minerals financing. Or more precisely, its treatment of the Biden-era portfolio, ongoing repercussions of those actions, and its resumption of DOE grant programs.

This week, I’m diving into its dealmaking and aggressive market interventions. That means debt and equity financing for commercial projects, direct procurement, coercion of allied countries through hardball tactics, and unrelenting efforts to reshape investor perceptions of projects and their markets. Part 3 next week will highlight specific projects as examples of how this approach can work…or doesn’t.

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When I started writing Tailings in December, I was afraid events would outrun me. Instead we’ve seen more data to support my observations from last year, even if it feels like analysts are still missing the bigger picture. More deals with few specifics, new programs that raise more questions than they answer. The ongoing war in Iran, and the Trump Administration’s successful jawboning of oil markets through control of information environments (including friendly “access” journalists) illustrates a broader pattern of trying to manifest reality where its actual capabilities are limited.

Full warning, this is my longest post yet. I’m addressing a number of interconnected dynamics and critiques that warrant substantiation. I see a story of risk-averse financial engineering inseparable from the individuals brought in to execute the administration’s agenda, theatrics characteristic of the administration from top to bottom, and a confidence game that requires companies, countries, and capital markets to believe the power this administration is wielding will endure as political winds shift. These tactics can undoubtedly produce short-term movement, but their durability and long-term effectiveness remain an open question.

As with last week, I’ll reiterate that I am bound by certain non-disclosure rules regarding company information and deliberative decisions. Any statements about administration policy are rooted in my interpretation and clear of the deliberative process. Nor is any sector commentary confidential. I will assume some familiarity of federal financing offices, though as I discussed last week, these authorities are increasingly coordinated by the White House and blended. Let’s get to it.

Making money on minerals

In my previous piece on the “Biden playbook for minerals financing,” I alluded to the stark differences between corporate and project fundraising needs. Bear with me for some illustrative examples, which I’ll note are simplified and do not capture the full range of corporate and project financing structures.

Let’s say you invest $100 buying common stock in a publicly-traded mining company. As long as that company can convince markets your shares are actually worth $150, you can make a healthy return on your investment. If you’re investing in a junior miner, the stock is likely cheap, volatile, and prone to momentum trading. The company may fail to build anything, bleed cash, and go bankrupt, but you net a nice return by selling your shares to someone else at a narrative peak before the stock price collapses. The “bag” is someone else’s problem.

Alternatively, let’s say you invest $100 for equity in a privately-held company developing technology for extraction of a mineral from unconventional resources. The company has a pilot operation, and is raising money to build a small commercial plant with room to scale quickly. Your shares are less liquid, and it’s both harder and more expensive to offload them. You want subsequent fundraising rounds to revalue your stake at a higher multiple, and eventually a public offering to cash out. So let’s say, aided by a sector hype cycle and lack of disclosure requirements, the company is able to sell a narrative that overstates its commercial prospects. Your stake is now worth $300 with little concern for the company’s fundamentals.1

But to fund detailed engineering work and the commercial project itself - including the working capital runway to endure customer qualification, ramp-up, and inevitable technical hiccups - the company needs a lot more money. The company also faces pressure to create an exit opportunity for longtime shareholders. Finding private fundraising increasingly difficult as investors go “risk off,” the company decides to tap public markets. In this sector, that usually means a de-SPAC. So the company executes a reverse merger, secures a solid cash injection, and (after a potential lockup period) shareholders get to cash out. There’s a risk that investor sentiment sours on the company quickly, but once again, it’s a matter of narrative and timing. Investors can net great returns completely disconnected from the company’s actual performance.

For corporate financing, while balance sheet fundamentals and tangible market opportunity anchor valuations, narrative heavily influences investors.

On the other hand, if you invest $100 into a project, your returns are fundamentally tied to that project’s cash flows and your collateral positions. Project equity is generally illiquid, and expected returns are measured over a specific time horizon. I’ve already covered internal rate of return (IRR), net present value (NPV), and other forecasted valuation measures in “How to build a mine: Part 2.” If you want to exit your stake early, you typically need an institutional or strategic investor to buy you out, subject to their own project diligence.

The project is likely owned by a special purpose vehicle (SPV), ring-fenced away from the parent company’s other assets. Though for high-risk projects typical of the mining sector, few institutional or strategic equity investors will participate without getting a stake in the parent company as well. Corporate equity is more liquid and subject to speculative value, and therefore typically offers more upside than a single project’s cash distributions. Investors may also secure other conditions for drawing on their cash, including royalties, warrants, and increased liquidation preferences in bankruptcy, and may offer high-interest debt alongside equity.

For project financing, returns are fundamentally tied to performance and asset value, including collateral positions.

Mineral project investors maintain time horizons over which they’re seeking to sell their stakes (typically five years), and often don’t position their assets for longer-term success in low-margin or highly volatile businesses—unless that offers a low-risk means of increasing sale value. Savvy investors can meet their return expectations even if the project fails relatively quickly. Distressed debt investors entering later in a project’s lifecycle - typically private equity (PE) - often structure their deals less to help companies grow than to extract as much revenue out of a business before it goes bust and to maximize returns in liquidation.

What makes it tick

The administration’s outward posture and messaging from Day One has been unabashedly pro-mining and promoting all things under the banner of “critical minerals.” Where corners of the Biden Administration clearly felt conflicted about mining/extraction activities and some high-profile projects, Trump officials have been more responsive to regulatory barriers and clearing the way for projects to advance.

In my exposure, political appointees made no effort to hide disdain for their predecessors, chalking up ineffectiveness to incompetence, excessive deference to lawyers, and ESG priorities. Much with the showmanship that pervades most other corners of the administration, Trump’s industrial policy prioritizes action over analysis and exercise of power over legal or constitutional concerns.

I covered some of the less-credible actions in “Policy kayfabe” earlier this year, but the most substantive effects by far have come simply from aggressive dealmaking and proclamations of broader market interventions to reshape sector economics. These moves have infused capital markets with a wave of speculative investment from both institutional and retail investors, with very mixed results. As I was wrapping up this post last Friday, President Trump hosted another major confab at the State Department with industry executives to announce more minerals deals.

By some measure, that approach has worked. Deals are happening, investors are making money, companies that have been stuck and struggling now see opportunities for reinvention and a second life. But appearances are deceiving, the quality and robustness of those deals vary wildly, and dealmaking does not necessarily translate to strategic outcomes.

About those government equity stakes

As of July 30, we’re now up to 30 equity stakes in private companies taken by the Trump Administration, and analysts are still debating the logic or strategy behind them—especially since there’s no single deal archetype for them. But I think most of these analyses are missing the mark, or at least not capturing the administration’s primary motivations.

Yes, you can use equity stakes to exert control over corporate decision-making, either through formal voting control or the implicit threat of dumping shares to tank a stock price. Yes, you can create a market signal with a strategic stake in a company, giving confidence to investors and crowding in private capital. Yes, you can ensure the government gets to share in the upside of high-risk, high-reward investments in earlier stage companies, much as a venture investor would. And yes, you could in theory try to exploit legal grey area to retain the proceeds of any equity sale rather than return it to Treasury, creating a slush fund “sovereign wealth fund” of sorts, potentially beyond Congress’ constitutional powers.

It’s possible there are corners of the Trump Administration that believe in these more strategic uses of government capital (for better or worse), and some deals we’ve seen to date even give that appearance. Some do involve board representation or other forms of control. In other cases, equity stakes have demonstrably stimulated outside investor enthusiasm.

The truth is far simpler. Equity is both collateral and a trophy.

The administration genuinely holds - from top to bottom - that “money shouldn’t be free,” irrespective of Congressional authorizations and program mechanics. The federal government should get something in return for its part in a transaction. If that stake comes with control, even better. Forget job creation, regional development, strategic sector growth, or economic multiplier effects. The only outcomes that truly matter are headline investment numbers, “winning” on every deal, and direct financial returns to the government—returns that go beyond simple principal and interest repayment on debt.

We’ve seen this play out across many policy areas over the past 18 months. I don’t need to rehash in detail the 2025 “Gulf Investment Tour” with fantastical financial commitments from the Gulf Arab monarchies to win US favor for other regional priorities. Or the administration’s spinning up trade fights, using US market power to extract concessions from allied trading partners. Or the treatment of every deal consecrated by the Biden Administration as subject to renegotiation for additional government upside.

There’s a clear pattern and psychology. Ink is never dry, bigger is better, and you can shape reality through control of information environments. Markets have thus far responded much as I imagine the White House hoped they would, but this approach has real limitations.

From Wall Street to Washington

We’ve also seen quite a bit of news about how the administration has staffed up its financing offices. Three of its five primary debt financing offices are now run by former PE senior executives.2 DOD has more broadly blurred the lines between its investment authorities and Cerberus Capital Management, Deputy Secretary of Defense Steve Feinberg’s PE firm.

The administration has largely pinned its hopes on the ability of experienced dealmakers to perform financial alchemy, spinning proverbial lead into gold. And as evidenced by its hiring blitz, reorganization, and legislative funding priorities, earnestly believes it can quickly solve America’s supply chain problems by arming financial engineers with a money cannon.

I’ve admittedly found some of this media coverage funny. Especially the splashy announcement that DFC would staff up a New York office to show it was serious about hiring Wall Street talent and engaging with banks, as though that’s new territory for federal financing agencies. At its late-2024 staffing peak, DOE LPO had probably 60-70 of our 400+ team in the New York metro area, including our Chief Investment Officer, Deputy Chief Counsel, and several dozen investment officers, portfolio managers, and transaction attorneys pulled from the ranks of Wall Street financiers and law firms.

LPO from 2021-2024 also pulled in large cohorts of highly accomplished energy industry professionals from Houston, Los Angeles, and San Francisco. Unfortunately, most of those quit when DOGE threw the office into stasis and said it would compel everyone to relocate to DOE HQ in Washington, then encouraged them to take “the Fork” if they didn’t want to move. When you give folks a mission, dry powder, and workplace flexibility, turns out you don’t need to dangle $400,000 salaries to staff up government agencies with high-caliber talent.3

The April-May reorganization at LPO initially sought to eliminate our entire legal and technical teams under aggressive DOGE staff reduction targets, leaving behind a single lawyer and single engineer to manage procurement for outsourced diligence and underwriting work. Fortunately senior staff was able to convey the value of retaining in-house expertise, court orders blocked both the return to office (RTO) and reduction in force (RIF) plans pushed by the Office of Personnel Management, and external pressure to preserve LPO’s capabilities all converged to neuter the more aggressive downsizing initiative.4

**It’s ironic that administration officials (not just DOGE) sought to eliminate personnel responsible for proper diligence and monitoring to protect taxpayer dollars, all while slinging the baseless fraud accusations I covered last week. This also raises questions about corners being cut now, and whether the next administration may have more legal ammunition than this one to cancel deals it finds improper.

This episode illustrated another dynamic we’ve seen across agencies with commercial project financing capabilities, where the administration’s political leadership downplays technical expertise and program management capabilities in favor of transactional skillsets. Yes, you need to execute deals to build a portfolio, but minerals projects requiring government capital are inevitably higher-risk endeavors that will need an active and supportive government partner long after loan closing.

Look no further than the ongoing efforts by LPO/EDF and DFC to keep our country’s sole battery-grade graphite producer, Syrah Resources, in play despite major policy and market headwinds. You need people who see struggling portfolio projects as policy challenges worth solving, not balance sheet liabilities.

Dealmaking is the easy part.

A growth mandate without growth

So what do you get when you stack your financing agencies with PE executives, and direct them to 1) finance deals, deals, and more deals where projects are deeply challenged due to broken market dynamics, and 2) make a healthy profit anyways?

An obsession with propping up corporate valuations, an emphasis on extracting equity as collateral, and a time bomb primed to blow up on the next administration.

I won’t unpack the bigger question of what this or the next administration does with its growing collection of equity stakes, but needless to say, the Trump Administration needs the minerals sector to stay frothy with speculative appetite. To “win” on many of these deals, stock prices must rise and stay elevated until federal divestment, as the complementary policy program may not lend itself to project viability. Or…you don’t disburse any funds at all and quietly allow failed projects to fade from memory.

For project success, you need either a perpetual subsidy of sufficient scale, or a viable market that projects can sell into once operating. The MP Materials deal is an example of the former — guarantee project(s) profitability over a 10-year lifespan, irrespective of the company’s commercial competitiveness, and investors will pile in. The government equity stake may be worth more to US Treasury than the annual taxpayer-funded operating subsidy, but if the subsidy gets pulled for any number of reasons, the equity value goes with it.5

Alternatively, if policy successfully improves a company’s commercial prospects, your equity stake should rise in value even as direct subsidies fade. So if you wanted to increase the value of a rare-earths project while reducing the subsidy dependence over time, you’d promote high-growth domestic manufacturing sectors that ingest large volumes of magnets. Better yet, higher-margin market segments where manufacturers can absorb a price premium vis-a-vis Chinese competition, and where magnets comprise a small percentage of the total bill of materials cost.

You may need to layer on additional tools, such as tax credits, domestic content requirements, or tariffs to mitigate cost imbalances with foreign producers, but market growth is essential. Aside from infrastructure investment with near-guaranteed returns, nobody wants to put real money behind a company selling into a stagnant or shrinking market.

Instead, as many have noted (myself included), they’ve rug-pulled commercial demand anchors for at least half a dozen high-volume critical minerals. When the president loathes wind turbines and sets the entire federal government on a crusade to destroy any project in the pipeline, you’ve stripped out half the expected domestic market growth appealing to investors. When the administration prioritizes reversing its predecessor’s electric vehicle policy support, you severely impair the other half. Magnet producers are now pretending drones (small), data centers (small and cyclical), and humanoid robots (non-existent) will fill the demand gap, but project financiers know better. The lithium-ion battery supply chain has suffered similar effects.

Alternatively, many minerals we deem critical primarily for their defense applications lack viable commercial demand anchors. Which means solving the problem basically requires picking projects to subsidize in perpetuity using DOD offtake or compelling defense suppliers to buy from higher cost US assets (which still gets passed on to US taxpayers when DOD buys higher cost products).

To complicate matters further, the Trump Administration’s dealmaking isn’t happening in isolation from the outside world.

Bending the world to America’s desires

Trying to keep up with tariff and other bilateral trade developments since January 2025 has been exhausting and, at times, an exercise in futility. I don’t really care to chronicle the events, and the different mechanisms the administration has pulled from our archives of long-forgotten trade law to keep the threat of elevated tariffs on trade partners. See the Atlantic Council’s tracker for a good illustration of authorities, categories hit, and timeline.

What’s clear is these moves are designed to reorient trade relationships around the beliefs that 1) all trade deficits are bad and a sign your country is losing (i.e., the Liberation Day tariff rates), and 2) durable trade arrangements rooted in mutual interest are passé, and America’s strategic objectives (no matter how narrow) should take primacy in any relationship.

Similarly, through the State Department’s FORGE initiative, tariffs, and other direct financing mechanisms, the administration is attempting to reorient global critical mineral and material supply chains around specific US interests. Much of this has focused on defense vulnerabilities, but also aims to fulfilling lofty industry-supportive rhetoric through exercise of US commercial power — rooted in our capital and consumer markets.

In practice, that means purchasing allied assets and steering them toward US supply, setting price floors that serve American junior miners with little consideration for mature allied producers, and liberal use of high tariffs to force domestic investment commitments. There’s far too much to unpack here - I may do so in a subsequent post - but will just say one could argue this approach is actually antithetical to US interests.6 It produces significant concentration risks.

Undeniably, there are now a number of verbal and written commitments acceding to the administration’s wants, fueling a narrative even from administration critics that President Trump is permanently reordering world trade. These bilateral agreements, however, have few enforcement mechanisms beyond “we will punish you if we’re unsatisfied with your progress.”7

It’s a similar playbook to the one used against American manufacturers, with the threat of tariffs (or lack of exemptions) hanging over them like a Sword of Damocles.

Navigating the tempest

All of this raises questions of durability — arrangements rooted in clear mutual interest are more resilient than those maintained through coercion. Speculative investors may be able to make a quick buck off deals promoted by the administration through the remainder of its term, but delivering for American interests into the 2030s and beyond requires companies betting on a longer-term commercial outlook. Think back to my comparison of corporate and project-level investments.

While administration officials and aligned think tanks have projected strategy onto these decisions - one could at least argue there’s some consistent directionality - most of them are directed by the whims of President Trump and a competitive inner circle of his most senior advisors. Mid-level political appointees made it clear they could not challenge the president’s directives and could only try to make lemonade from the chaos. Tariff rates in particular have been prone to wild and unpredictable shifts, rendering them ineffective in re-baselining project economics.

Other administration actions have produced second order consequences impairing minerals security objectives, and forced agencies into reaction mode. Liberation Day tariffs on China precipitated devastating export controls on dysprosium, terbium, and finished magnets, sending the entire interagency into a panic. In just the past few months, we’ve seen allied supply of high-purity aluminum and refined cobalt impaired by acts of war against US adversaries. We’ve also seen undue attention directed at:

• Non-viable rare-earth mines in Greenland with poor infrastructure access

• Various mineral assets in Ukraine that haven’t been surveyed since the Soviet era

• A decrepit Venezuelan mining sector plagued by a weak puppet regime

…all entirely unrelated to the higher order geopolitical interests of President Trump and key senior officials dictating US policy in those regions.

Some of these distractions are par for the course in any presidential administration, but the collateral damage from tariffs and bilateral trade restructuring may be substantial. And also may take several years to manifest. Pay attention to the following dynamics in particular:

1. While tariffs on minerals and their derivatives continue to fluctuate in ways that are too unpredictable to support domestic producers of those materials, the tariffs continue to wreak havoc on project construction costs, raising financing hurdles for developers. Same with increasingly stringent sourcing requirements for non-Chinese industrial equipment. We’re trying to support domestic mining companies and broader re-industrialization objectives, securing the project economics needed to meet investor expectations — and doing so in an already high-cost operating environment. Just as the Biden Administration struggled with the tradeoffs between materials and labor sourcing requirements and clean energy technology adoption, the Trump Administration will almost certainly see parts of its minerals agenda curtailed by its trade policies.

2. Supply chains are complex, and mandating higher prices for upstream materials via tariffs can impair the global competitiveness of downstream domestic sectors. If you force magnet manufacturers to pay $110/kg for neodymium-praseodymium oxide (MP’s deal) and comparably high prices for their terbium and dysprosium, you lock in higher magnet production costs and may render the US unable to produce competitive exports. This is the practical reason the Japanese, Koreans, Germans, French, etc. will mostly resist US efforts to dictate en bloc price floors.8 These allies have stronger and more globally competitive legacy industrial assets than we do, and with them, economics to defend. Nor can their downstream consumers bear the retail prices Americans can. Price floors can be useful - in some cases absolutely necessary - but should not be imposed haphazardly.

Staff at various agencies will continue to advance strategic interests through project support, trying to cobble together sector strategies that mitigate national vulnerabilities. But any sober policy analysis should recognize self-directed geopolitical uncertainty will continue to produce unpredictable headwinds.

Masking risk aversion

Some loan commitments DOE LPO issued in the Biden era were unlikely to close irrespective of administration. Market conditions changed, fundraising dried up, startups didn’t have the right leadership team to navigate commercial project development. But at a cost to the applicant of $3+ million and nearly a year of review and diligence often just to reach a conditional commitment, we never subjected applicants to the process without some expectation they could reach financial close. Too much diligence? Too long a process? Yes and yes, but that was the hangover from Solyndra’s failure and fallout.

We could have punted more extensive diligence to the closing process, especially since detailed engineering and execution of key commercial contracts were uniformly closing conditions. But an LPO conditional commitment announcement reflected exhaustive diligence and high degree of confidence in the project, and therefore produced a powerful market signal. We occasionally upsized loans at financial close, but conditional commitments reflected pressure testing of cost and revenue assumptions under many scenarios, validated by independent engineers, financial advisors, and external legal counsel.

The Biden-era LPO maintained a risk floor of CCC+ credit ratings, meaning the riskiest projects we loaned to had an assessed default expectation of ~50%.9 Individual project credit ratings are confidential, but I can say everything we financed in the minerals space from 2022-2024 was closer to that floor than investment grade (BBB-). These are inherently high risk projects, many of which still can’t raise enough equity after securing cheap government debt or grant support.

LPO/EDF risk tolerance is lower in the Trump Administration for nearly every sector, owing to more risk-averse leadership uncomfortable with projects requiring additional policy interventions to pencil. As a result, dealmaking activity largely shifted to other agencies throughout 2025, as DC lobbyists steered their clients toward the easiest path to a financing commitment: DOD’s Office of Strategic Capital (OSC), Commerce’s CHIPS Office, and the US Export-Import Bank (EXIM).

But looking at many of these minerals deal announcements now coming from the administration, I’m getting deja vu from many of DOE’s battery grants. Awards that are premature or poorly scoped, and unlikely to meet project financing needs. Projects that don’t appear to have customer-validated commercial products, offtake, or basic engineering work for commercial facilities. (See my previous walkthrough in “How to Build a Mine: Part 2”)

Those DOE grants were statutorily constrained by legislation and designed for high-risk projects badly needing capex subsidies, whereas these debt-and-equity commitments are underwritten by senior lenders required to perform serious diligence and limit losses. As such, I question how many of these deals are actually expected to close and disburse funds, versus merely giving companies an easy path to administration endorsement for fundraising purposes. The alternative may be worse.

That’s not suggesting any particular project isn’t potentially viable, or can’t eventually close loans with real diligence, but rather the Trump Administration is making an outsized show of support without putting real skin in the game. There’s a reason JP Morgan’s Strategic Resilience Initiative (SRI) has invested in the Korea Zinc (creditworthy parent) and Perpetua Resources (a literal gold mine backed by substantial EXIM diligence) projects, while steering clear of more speculative commitments to date.

Once again, corporate vs. project fundraising. Returns tied to narrative vs. diligenced cash flows and asset values. Boosting investors vs. advancing projects.

At some point late in the Biden term, companies started to figure out they could get a letter of interest (LOI) from EXIM with minimum scoping effort and effectively no diligence. Much like LPO’s flagship Title 17 Program and our Part 1 review letters, these were intended strictly to inform companies of eligibility, before they expended real effort and cost to run the gauntlet of government diligence. But companies eager to get positive news coverage (and egged on by their DC advisors) figured out they could get one of these “indicative term sheets” without scoping their project or demonstrating commercial viability. Believe me, EXIM staff were not encouraging it.

The LOIs themselves are only valuable as markers of demand for federal financing, not project viability or support as the administration suggests. Per my former DOE colleague Kate McMahon’s tracker, EXIM issued at least 35 LOIs for metals and mining projects worth nearly $15 billion between March 2025 and March 2026. Contrast that with its loans: $1.25 billion to Barrick’s copper-gold mine in Pakistan, $2.9 billion to Perpetua’s gold-antimony mine in Idaho (in diligence since early 2024), and just under $150 million to six US mines and processing plants, combined.

Additional projects may graduate from LOIs to loans, but given EXIM’s statutory limits on loss tolerance and required senior lending position, I struggle to see sufficient leverage extended to make most projects viable without additional federal support — if additional support is possible.

All roads lead back to subsidy

The hundreds of billions of dollars in credit authority across DOD, DFC, DOE, EXIM, and Commerce, even legally stretching those authorities for direct equity investments, can only go so far. Especially if the administration expects to make a profit on projects beyond interest payments on debt.

Equity extracted for other financial support is dilutive, and equity invested at the quantum necessary to fund commercial projects would give the federal government much larger stakes than we’ve seen to date, with one exception.10 The projects that have advanced to construction with smaller federal equity investments have received substantial subsidy commitments to unlock bankability.

Some form of operating subsidies will be necessary where markets can’t support project economics with concessional debt financing alone, and our sole sector-wide subsidy (the 45X production tax credit) is now slated to phase out beginning in 2031 courtesy of the administration’s signature One Big Beautiful Bill Act (OBBBA) legislation. OBBBA also did refill DOD appropriations for the National Defense Stockpile, but these are tied to specific strategic resilience needs, not open-ended purchasing commitments at above-market prices.

The US Export-Import Bank’s Project Vault has been floated as a demand support mechanism in addition to an industrial resilience stockpile, but the agency’s statutory loss tolerance is minimal and the ~$2 billion in private capital invested almost certainly expects returns that go beyond offering an off-balance sheet insurance product for industrial customers.11 (I strongly believe Vault should be used exclusively for this purpose, where it can be quite useful).

But the Vault SPV almost certainly cannot achieve any returns on equity without either 1) compelling industrial end users to pay well above market prices for materials and claiming part of the spread, 2) combining purchases with another to-be-determined federal subsidy, or 3) financing options trading (and gambling). It certainly can’t produce a credible demand signal on its own, and EXIM’s statutory export-import requirements may limit Vault’s use for sourcing from domestic producers.12

Most of the enthusiasm I’ve seen for this scheme comes from trading houses and politically-connected miners that clearly smell an opportunity for arbitrage.

The actual Trump playbook

What remains is a challenged commercial outlook but a White House imperative to get deals done and projects built, leaving the officials tasked with executing their mandate few options but to rely on financial engineering. There’s no single strategy, but the toolkit now largely involves:

1. Corporate equity stakes for federal support, boosting the government’s collateral position and allowing the administration to claim it got a good deal for taxpayers. Soaring stock prices after the MP Materials and Intel deals also clearly led administration officials (and many mining sector executives) to believe a government equity stake was “this one simple trick” to significantly raise corporate valuations.

2. Open-ended promises of project financing with little-to-no diligence, such as US EXIM letters of interest or conditional loan commitments from DOD OSC and other financing agencies, intended to boost investor confidence in companies and their projects without actually committing taxpayer dollars. Pro tip: if you see a conditional loan with big round numbers (e.g., $300 million, $1.5 billion), that almost certainly means the project hasn’t been seriously diligenced and the debt facility hasn’t been scoped.

3. Promises of procurement support that range from substantial (MP Materials, US Antimony), to trivial (potential purchases under the National Defense Stockpile), to poorly defined and credulous (enforcing effective price floors via Project Vault or steering allies into US-dictated price floors under FORGE).

I’ll reiterate, this approach has been remarkably effective at generating paper gains in the short-term for investors. But few projects have secured their commercial project financing, and without actual market structure changes, fundraising will be excessively difficult. As such, I find it hard to call the approach a coherent strategy outside projects anchored entirely by defense demand.

Rather, it amounts to little more than PE-style dealmaking and market manipulation. And the market seems to be catching on. Worse, the MP Materials deal set unrealistic investor expectations for subsequent federal support, and administration officials have spent the better part of a year trying to satisfy those expectations without the money to do it. But more on that in my next post.

Final thoughts

On an episode of the Global Lithium Podcast last month, Standard Lithium CEO David Park noted (starting at 12:20) that many federal agencies are “trying to do things critical minerals focused” and creating a lot of press releases without closing deals. More so in the Trump governance structure than any other, federal agencies have perverse incentives to make noise for internal political favor. While not necessarily what Park was implying, this noise comes at the expense of more viable projects and recipients of risk capital, and may produce a similar effect to what we saw with DOE grants in the Biden Administration.

In my next post, I’ll look at several of the administration’s equity investments, and how they fit (or don’t) with our strategic objectives. I’ll close this one by emphasizing two extraordinarily important principles for federal minerals financing.

1. We need to determine which materials require direct subsidies, those for which we can credibly anchor with defense demand, and whether we want a competitive supplier base. It’s easier to justify equity stakes and long-term subsidies for some materials than others.

2. The closer an administration hews to authorities clearly defined in statute and avoids personal conflicts of interest, the more likely the project will survive shifting winds in DC. Companies will lobby the next administration to preserve subsidies or secure bailouts for projects on national security grounds, contending that to abandon them would benefit China. Some of these claims may be justified and necessitate accommodations; many will be frivolous and self-serving.

Should the midterm elections produce a Democratic House and/or Senate with subpoena powers - portending increased oversight and leverage through the appropriations process - some of the tactics I’ve discussed may lose their effectiveness. Every administration accelerates project announcements in the run-up to elections, but in this case, investor sentiment, corporate acquiescence, and countries’ willingness to accommodate demands may recalibrate after November. Projects underwritten with credible diligence, legislative policy support, and no appearance of impropriety will find themselves on sounder footing when winds shift.

I see ex-Biden Administration officials and policy analysts arguing that President Trump has permanently changed America’s posture toward the world, its trade relationships, and its control of domestic industry, and it would be best to lean into it. In some cases, they’re envious of the toolkit and want to use at least part of it for their own agenda.

I’ll just say their posture is awfully reminiscent of Boromir’s in The Fellowship of the Ring. He sought to bring the One Ring back to his own kingdom of Gondor, and use its power to fight Sauron’s armies. But the ring answered only to Sauron himself, and progressively corrupted any other who possessed it.

The Fellowship had no choice but to destroy it.

Tools that have worked thus far for the Trump Administration are designed for shock-and-awe policymaking, and around an apparatus of one man. That makes these tools, and the deals they’ve enabled, inherently fragile. The approach is unlikely to work for the next administration — no matter the party in charge.

I’ll leave it there for now.

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And we’re back! It’s been a few months since my last post; pardon the delay.

If you’re new to Tailings, I’ll just note that I’ve strung together a series of posts discussing federal financing tools, and how the Biden and second Trump Administrations have evolved the toolkit to allow for greater intervention in what I’m axiomatically treating as a broken markets prone to foreign adversarial control. Here are those previous entries:

• 2/26: “How to think about federal financing tools for critical minerals” (link)

• 3/13: “Capital formation in minerals project finance” (link)

• 3/20: “The Biden playbook for minerals financing” (link)

• 3/27: “Where BIL and IRA went wrong” (link)

Today, I’m finally beginning to tackle the Trump Administration’s approach to minerals financing…at least as it stands roughly 18 months into the term. And to specify further, I’m really talking about the administration’s management of its legacy project portfolio, bilateral dealmaking with companies and countries, and other market-shaping actions.

If you’ve followed my previous entries, you may recall I spelled out baby steps taken by the Obama and first Trump Administrations on minerals security, responding to specific crises and primarily acting on rare-earth elements (REE). The Biden Administration significantly expanded the active minerals project support toolkit, built up bureaucratic capacity and credit authority at financing agencies, and made dozens of investments into commercial projects at varying stages of development.

The Trump Administration inherited all of that. Most of its actions in the sector since taking office have leveraged the foundations, though its use (or discarding) of them illustrates an inconsistent approach often exposing a lack of strategic vision.

I will emphasize two discrete but related principles:

1. An administration’s policy approach is never static, responding both to events and shifting permission structures.

2. An administration will always project strategic vision on its policies, no matter how haphazard and aimless its actions.

I could add a third…that it’s more lucrative for think tanks, industry advisors, and “permabull” financial analysts to pretend strategy exists where it very clearly doesn’t. I read too many explainers in 2025 ascribing sector-level strategic vision to specific company deals, and I could see very clearly from inside the administration that no such strategy existed.

Today in Part 1, I’m covering the administration’s management of Biden-era projects and programs, and its approach to grant programs generally.

In Parts 2 and 3, I’ll deconstruct the administration’s dealmaking philosophy and its broader market effects.

Since much of what I’ve written in this post may strike readers as sensitive or otherwise controversial, I will reiterate that I am bound by certain non-disclosure rules regarding company information and deliberative decisions. Any statements about administration policy are rooted in my interpretation and clear of the deliberative process.

I’ll leave it to the lawyers and Congressional investigators to weigh in on the legality of specific deals or actions, including grant cancellations. Rather, I’ll try to grapple with the implications of those decisions.

Squandering an inheritance

The first three months of this administration were predictably chaotic, and it was clear from the outset none of the incoming political appointees had bothered to assess the full spectrum of federal capabilities, the existing portfolio of project commitments, or set clear priorities.

That’s partly why they entered with a genuine assumption of widespread fraudulent and incompetent dealmaking by the Biden Administration, and froze most of DOE’s commercial projects for much of 2025. At the Loan Programs Office (LPO), we endured an exhaustive audit of our entire portfolio for each of the three directors appointed from January through April.1 They of course found nothing improper, even if they argued some deals were “bad” (e.g., not aligned with administration priorities, not an acceptable risk profile, or they just didn’t like how the deals were underwritten) and sought to change deal terms after ink was dry.2

Every deal or award from the Biden Administration was subject to review irrespective of alignment with Trump Administration priorities. In the end, more than 80% of the Biden LPO portfolio was modified or cancelled. Deals that moved forward with few or no modifications did so only largely because career staff fought for them, and because lawyers successfully imparted the likelihood of losing a lawsuit if cancelled or otherwise impaired. Closed loans - especially those that had already drawn funds - were on safer grounds due to binding contract terms.

In my first meeting with senior White House political appointees, in March 2025, they were unaware LPO was the only office in any federal agency to finance actual domestic mining activities in the past decade. Or that LPO, the Manufacturing and Energy Supply Chains Office (MESC) and the Office of Clean Energy Demonstrations (OCED) had portfolios of critical minerals and materials projects that were either shovel-ready or could be with more administration support.

I don’t share all of this to air grievances, but rather to illustrate that DOE had many commercial minerals and materials projects between LPO, MESC, and OCED that were immediately thrown into limbo, and held there for many months. To my knowledge, many of the grants are still stuck in some manner, despite public signaling to the contrary. All of this was happening at the same time the administration was:

1. Aggressively attacking the very electric vehicles and renewables expected to drive demand for lithium, nickel, cobalt, graphite, REEs, aluminum, and other minerals.

2. Cutting the tax credits that partially offset higher domestic production costs.

3. Tariffing raw materials and manufacturing equipment, raising construction costs for new mines, processing plants, and other supply chain projects.

4. Prioritizing data center buildouts and the artificial intelligence economy, further constraining construction labor and affordable power availability. This has been particularly devastating for our ambitions to build new aluminum smelters, which need huge amounts of affordable baseload power.

Clearing out the brush

That’s not to say every project the Trump Administration inherited was viable. Grant awards by their very nature were designed to be speculative. Administration officials would have been well within their rights to initiate a rules-driven portfolio assessment in early 2025 to cull genuinely non-viable projects. Particularly those with poor scoping, no clear investment thesis, and/or lack of credible path to raising private capital. Doing so would free up funds for new solicitations and reallocation.

It also would improve the competitive landscape for offtake and capital by clearing out “zombie” projects,3 likewise removing them from market assessments produced by industry analysts. I’ve noticed many of these analyses tend to have an uneven grasp of what’s real and what isn’t, relying primarily on public announcements rather than genuine market intelligence. As such, they tend to overstate forecasted production.

Instead of a reasonable cleanup effort, we got stasis and strangulation across the board — even for minerals processing projects the administration was publicly supporting. My attempts in the early spring to get the White House and/or leadership DOE to “whitelist” all critical minerals projects, clearing them from political review and allowing them to resume spending, received an agreeable reception but no action at all. As I understood it, even Trump-appointed politicals at DOE felt they could not act without direction from the White House inner circle, and DOGE’s mission to deliver extensive cuts from BIL and IRA took precedence over industrial priorities.

We’re now more than a year from when DOE Secretary Chris Wright told Congress that review would be completed, and it appears not only are grants still in the balance, but those that have been ostensibly cleared from cuts don’t exactly have a green light to proceed either. Projects that may have been viable in early 2025 are now effectively dead and beyond the help of federal policy.

Companies talk. Lobbyists talk. They won’t castigate administration decisions publicly, but widely recognize the benefits to the sector from this administration’s more aggressive dealmaking and deregulatory actions have been at least partially offset by its other policies, largely made without concern for collateral damage to its stated minerals agenda.

Picking up the pieces

Starting around the end of 2025, we started to see DOE move forward with funding opportunities again. Following its formal reorganization and creation of a consolidated Office of Critical Minerals and Energy Innovation (CMEI), DOE finally relaunched many of its grant solicitations for minerals processing technology and project development.

Priorities have slightly changed, with decreased emphasis on environmental or community benefits in grant criteria, but the solicitations are designed much as they were previously. CMEI has also tried to focus its funding on specific minerals deemed the highest priority by the White House, including REEs and gallium, and leveraging artificial intelligence (AI) for enhanced processing capabilities.

There’s also, of course, the continued charade that we’ll be able to economically extract REEs from coal resources. But I’ll note once again that these programs are bipartisan and Congressionally-directed, and they have little to do with the other Trump Administration efforts to prop up the declining coal sector.

DOE still holds hundreds of millions of dollars in dry powder to support minerals projects with grant funds, and I expect we’ll see most of it awarded before the midterm elections. Other projects falling by the wayside and de-obligated will free up hundreds of millions more for re-solicitation next year.

Even as the Trump Administration’s dealmaking takes center stage on industrial policy, it will continue to manage grant programs for earlier stage technology and project development. Thus far, it has done little to overhaul the status quo. “Throw AI at the problem” won’t solve much, so we’ll need structural program reforms to better incubate promising technologies and projects.

New life for the battery grants

The third round of Infrastructure Investment and Jobs Act (IIJA) battery grants is currently under review, and in terms of topic coverage, not much has changed. Priorities are still lithium, graphite, nickel, and cobalt, which hopefully also indicates a commitment to advancing legacy portfolio projects for these materials.

Here’s what I like from the solicitation:

• It specifically delineates between demonstration and commercial scale projects, and carves out funding for the former. This encourages applicants to seek funding for smaller-scale projects and not just grab at the largest award possible. Unfortunately, statute still require a $50 million minimum award, so DOE is somewhat restricted in the demonstration projects it can support.

• DOE solicitations are now spelling out how applicants seeking both grants and loans could combine them. This is language that my counterparts at MESC (now the Manufacturing Deployment Office (MDO)) and I developed in my final months at the agency, and without broader statutory changes defining clear pathways for combining these tools, was probably the best we could do.

Here’s what I don’t:

• Including REE eligibility in battery recycling grants looks like an attempt by DOE to claim more support for REEs than it can actually provide. There are no REEs in lithium-ion or sodium-ion batteries, or any commercial chemistry for battery energy storage systems (BESS). Small volumes of lanthanum and cerium are used in the nickel-metal hydride batteries traditionally used in hybrid vehicles, but even these are rapidly phasing out for lithium-ion chemistries. No magnet REEs at all.

• I’ll discuss equity stakes in Part 2 next week, but forcing recipients to give up company shares as conditions of award mostly defeats the purpose of grants. Taking warrants or venture stage equity as part of a larger fundraising round with private investors may be less inhibiting, but any attempt to grab 10-15% of a company developing a high-risk commercial project will significantly complicate fundraising. DOE should tread carefully here.

Otherwise, not much else to say here until DOE makes its awards.

Toward a unified investment front

Just last month, DOE and other financing agencies launched a “common investment screening” form for companies seeking federal funding. The requirement follows from a Presidential Memorandum last summer titled “Simplifying the Funding of Energy Infrastructure and Critical Mineral and Material Projects,” which involves several actions aimed at centralizing investment activities with the White House.

In theory, this allows companies to connect with multiple individual funding offices without needing to hire lobbyists to knock on every door in Washington. In practice, financing agencies are already familiar with the universe of advanced projects through years of continued industry engagement. Companies frequently approach the administration with “newly-discovered” opportunities to extract a trendy mineral, but these are rarely developed sufficiently to offer credible solutions. Moreover, the White House has already established interagency channels to track opportunities and coordinate financing activities.

There’s some value in appearing accessible, especially to deter Congressional complaints that agencies aren’t responsive to their constituents’ needs, but it’s not really a mechanism to streamline or accelerate financing. DOE created a “Front Door” program in 2023 to help steer companies to the most appropriate program office, but ultimately it turned into little more than a feel-good customer service center for seed-round startups and one-man “companies” with Hotmail and Yahoo! addresses. More engaged project developers seeking grant or loan funding still hired DC advisors to help them with access to the right offices. I don’t expect that to change.

Another of the directives required DOE and other financing agencies to share confidential applicant and borrower information across the interagency. Fortunately, the final memorandum emerged watered down last summer after several LPO colleagues (including our lawyers) and I fought the requirement on grounds it was too broad and risked exposing sensitive diligence materials to unauthorized parties.4 Publicly-traded mining companies might not have much in the way of truly confidential information, but applicants building nuclear reactors, battery gigafactories, and semiconductor fabs generally don’t want their applications publicized — let alone technical information leaked.

These policy actions speak to this administration’s strong preference for breaking down silos between agencies and steering all investment decisions from the White House, which shouldn’t be news to anyone in the sector. Putting aside concerns for the moment about political inference or other improprieties, there’s clear value in centralizing investment activities for projects of national significance — especially if synchronizing multiple tools is necessary for success (i.e., don’t make investments disconnected from trade/tariff policy).

What we’ve seen thus far is an ad hoc reorganization largely unsupported by legislation, and that will need to change. While some policy pros are already floating proposals for a new infrastructure bank, I’ve yet to see a grand theory tying together financing mechanisms and operations across agencies. The closest I’ve seen is buried near the end of this recent Foreign Affairs piece from former National Security Advisor Jake Sullivan — but it’s still light on mechanics and guardrails.

Final thoughts

I had to put Tailings on pause in April and May while writing a grant for a client, and it was…an enlightening experience.

I reviewed many grant proposals while at DOE for several offices, but this was my first exposure from the applicant side since 2022. It’s every bit the miserable slog I remembered, and badly in need of reform. In total, DOE solicitations typically require submission of roughly 20 different files, including a 25-page technical narrative, comprehensive budget worksheet, project workplan, data management plan, resumes of key personnel, and multiple screening statements aiming to ensure we’re not awarding money to Chinese Communist Party agents or locally-opposed projects. R&D grants further require extensive information about personnel research credentials and existing commitments, while commercial project grants now demand financial statements, supplier and offtake agreements, and more.

The logic behind all these requirements is sensible. For starters, you want some degree of quality control, risk management, and deterrence against frivolous applications. The more rigorous your submission requirements, and the stricter your program parameters, the harder it is for less-meritorious and politically-connected companies to lobby their way to the front of the queue. And these are typically the companies I’ve seen press hardest to relax the rules.

It’s not simply an anti-corruption measure; it also preserves staff bandwidth for more valuable work. Evaluations can suck up weeks or months of staff time, already at a premium after DOGE’s purges last year. AI can speed reviews by gathering information from across the applicant’s materials and mapping it to solicitation requirements, yet lacks the experience and intuition to make qualitative assessments.5

Since pre-commercial projects are especially susceptible to timeline slippages, work scope modifications, and key personnel changes, asking for so much detailed information at an initial submission deadline is unreasonable and impractical.6 Especially when so many specifics will change before execution of an award, often 9-12 months after submission. A few final points:

• DOE should make the process more iterative, with requests for more information (e.g. budget details, detailed workplan, project schedule) and online forms allowing for later completion of more screening- and compliance-oriented tasks.

• Rolling or batched selections for award, with applicants allowed to update submission documents, would also allow fast-advancing projects to benefit from substantive developments.

• Companies shouldn’t have to spend tens of thousands of dollars on external grant-writers or prematurely commit to critical project decisions in a race to hit arbitrary deadlines fundamentally at odds with project development cycles, even if this is accepted common practice in academia.

I’ll leave it there for now. See you next week.

Last week I said this post would be my look at the Trump approach to minerals financing. As with much of my other Tailings entries and their sequencing, I’ve done a remarkably poor job of estimating the work effort required to effectively convey my message, and with sufficient context. So I end up missing self-imposed deadlines, writing and publishing more entries than anticipated, and at much greater depth.

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The “Trump approach to minerals financing” post is coming, I promise.

However, I’ve found myself unable to balance the proper work required to get that post right with other professional obligations, and need to focus on the latter. I had outlined several weeks ago that would be my final post before taking a break in April, and picking back up in May. That’s still my intent, but it may slip into next month.

I’ve also candidly been spending too much time, as the kids these days say, “monitoring the situation.” As I’m sure many of you have. This Iran War is slow-motion snowballing into the sort of worst case scenarios for global supply chains and energy markets many feared would result from a Straight of Hormuz closure.

It’s also a throwback to my first career track.

Blasts from the past

I headed off to Vanderbilt University in August 2007, right as the Iraq War peaked in intensity. That year, General David Petraeus spearheaded a “surge” of troops to regain control of the country from what had spiraled into a brutal insurgency. America was also in the process of slowly ramping up its troop presence in Afghanistan, an increasingly ineffective occupation then in its sixth year. The US military commitment to the Middle East and troubled regions across the Islamic world seemed to be a new long-term normal, and the highest priority for national security.

I’d ultimately major in Middle East Studies at Vanderbilt, conscripting myself to serve what I believed to be America’s long-term security needs. I took Arabic, studied abroad at the American University in Cairo for the fall 2009 semester, and had intended a future in military intelligence after school. That’s another story. Along the way, I interned at the American Enterprise Institute (AEI), covering the Gulf of Aden in AEI’s Critical Threats Program.

I distinctly remember my final interview question for that job in March 2010, “What do you consider the greatest threat to America today?”

My response: A Saudi-Iranian long war engulfing the region in destabilizing proxy conflicts from Yemen to the Levant to Iraq, fueling extremism and creating more fertile ground for al-Qaeda to grow, threaten our military operations in the region, and project terrorism into the US. I doubt I mentioned Hormuz, largely because I wasn’t so versed in supply chains or global commerce back then.

Bin Laden was still hiding out in Pakistan. Al-Qaeda, defeated in Iraq, had embraced a decentralized network and was building syndicates in safe havens across the Islamic world. Including of course in the Af-Pak region. Anwar al-Awlaki was tapping into digital media for recruitment out of its Arabian Peninsula syndicate (AQAP) in Yemen. Al-Shabaab and Hizb al-Islam in Somalia had reduced the African Union and US-backed federal government to a few blocks of control in Mogadishu. Boko Haram had risen in Nigeria, and like al-Shabaab, would ultimately align itself with the wider al-Qaeda network.

It would be nine months before Mohammed Bouazizi lit himself on fire, sparking the Arab Spring and toppling longtime dictators in Tunisia, Egypt, Yemen, and (with NATO help) Libya. Bashar al-Assad nearly fell with them, but then dragged Syria into a horrific civil war that killed hundreds of thousands, displaced millions, and gave the Islamic State (IS) its launchpad to terrorize the region such that the US and Iran joined forces (sort of) against them. The refugee crisis fueled by the region’s civil wars and the IS-led resurgence of transnational terrorism fundamentally altered European and US politics in the mid-2010s, and in ways that still influence the former today.

My first assignment at AEI was to build a research dossier on the Houthis, looking for any mentions or indications of ties to the Iranian regime. That was May 2010! Hardly anyone knew about the Houthis then. And through all my open-source sleuthing, I found no smoking guns. Just distant, circumstantial exchanges of pleasantries between them and Iranian representatives. Despite both representing Shi’a sects,1 the Houthis didn’t properly align themselves with Iran until the Saudi and Emirati invasion of Yemen in 2015. Those implications we’d only feel later, in October 2023, when the militant group joined Iran’s other proxies in a campaign against Israel and effectively shut down Red Sea shipping lanes.

It was a different world. One where Islamist terrorism and other non-state threats dominated national security concerns. Minerals and supply chain security were the purview of obscure academic research and less favored corners of the Pentagon. Having met some of those folks in the past three years, I came to respect their dogged commitment to under-appreciated threats, now clearly vindicated by events.

But in May 2010, Euromaidan was several years off, which would set in motion Vladimir Putin’s wars of conquest in Ukraine. The inflationary shocks from Russia’s 2022 invasion were only just finally fading when President Trump took office. The China-Japan Senkaku Islands dispute would occur later in 2010, precipitating the first rare-earths crisis and waking America from its long-neglect of minerals supply chains, albeit meekly. DOE’s Loan Programs Office was spinning up its first wave of clean energy projects, with jobs, innovation, climate change, and Middle East oil dependency front of mind, not competition with China. Solyndra would go bankrupt a year later amidst China’s solar panel dumping onslaught. That political backlash would sap America’s appetite for federal financing of frontier technologies and supply chains until the Biden Administration.

I was hardly paying attention to any of that. I was busy digging through poorly-transliterated English language sources out of Somalia to build the best resources on regional militant groups open-source intelligence (OSINT) could offer.

The war in Iran will change things forever

A few weeks ago, I spoke on a panel at the UNC Clean Tech summit with a couple of former federal colleagues who worked on minerals security at other agencies. Knowing I had an audience half-comprised of students, I opened my introduction by mentioning the Iran War (then two weeks in) and my Middle East Studies degree.

My message: Don’t stress about your major and first job out of college. There are plenty of opportunities to change course if you discover new interests after school. And even if you find yourself on a completely different career path, the things you’ve learned and experienced have a funny way of making themselves relevant again.

So here we are in 2026, and once again, all eyes are on the Middle East. This time, conflict is roiling global energy, agricultural, and industrial supply chains. It feels like my career has come full circle. I wouldn’t call myself a regional expert at this point, to the extent I ever was, but I still knew enough to appreciate how badly the situation could spiral in a true hot war. And unlike the me of 2010, I now have a pretty good handle on several major impacts to industrial supply chains.

Much of the American media focus has been on oil prices, with natural gas, fertilizer, and helium right behind them. These are the stories most likely to create humanitarian crises, prompt rationing campaigns or other emergency measures across Asia and the developing world, and rapidly sap war tolerance, so their media prominence is sensible.

For minerals, I’m watching sulfuric acid, some petrochemical byproducts of oil and gas refining, and aluminum. All have earned their share of attention, though to lesser degrees outside policy circles. Sulfuric acid shortages will hit myriad industrial processes in Asia, but could be particularly problematic for Indonesian nickel processing and Chinese and Japanese conversion of Australian spodumene to battery grade lithium. Lithium-ion battery components like separators, electrolytes, and binders require unsubstitutable petrochemical inputs, including ethylene, polypropylene, and polyvinylidene fluoride (PVDF) — all dependent on oil and gas refining, with major producers already hiking prices due to input shortages.

Don’t sleep on aluminum

I expect to write a longer standalone piece on aluminum, but that’s still one of the more underreported stories in this conflict. The US was already looking at at a ~$2/kg aluminum premium to the global market as of late January, thanks to the massive tariff hike President Trump imposed last year.

We just learned that Emirates Global Aluminum’s (EGA) Al Taweelah smelter likely suffered catastrophic damage from an Iranian ballistic missile strike this past weekend. The fact EGA is selling future feedstock inventories of alumina seems to confirm the company expects that smelter, one of the world’s largest, will be offline for a long time. Restarting from a controlled shutdown takes months as is, but the damage reported could stretch recovery into late 2026 or even 2027, especially with the conflict still raging.

That smelter alone is worth 2% of global primary aluminum production, and along with EGA’s other smelter in UAE, contributes close to 5% of America’s total aluminum supply.2 Combine that loss, damage to Bahrain’s Alba smelter (also 2% of global production), and shut-in effects from the Strait closure…and we’re looking at sizable, potentially long-lasting effects to US aluminum supply. Per Trade Data Monitor, we sourced 22% of our primary and alloyed aluminum from the Gulf Arab states last year. All shipped through the Strait of Hormuz.3

UPDATE (4/3, 11AM) - EGA has now confirmed the extent of damage at Al Taweelah, citing potentially **up to a year** before the smelter resumes production. Worst case scenario.

With 50% tariffs now locked in, and very little additional primary smelting capacity expected online this year, US manufacturers and builders should expect to see significant inflationary impacts from aluminum alone. We’ve seen a 10% spike in LME aluminum pricing we’ve seen since the conflict started, and it’s reasonable to expect US buyers could see a premium even above that due to our tariff-and-supply constrained market.

All the more reason for us to be investing in growing our smelter capacity, as well as improving recycling rates for aluminum cans (~20% of our total consumption, <50% recovery and recycling).

We can’t solve for today, but we can build a more resilient tomorrow.

Final thoughts

Finally, I’m watching for impacts to the Gulf Arab economies, with these countries having made a combined multi-trillion dollar “commitment” to President Trump for Monopoly money US investment in the coming years. This war will cost them hundreds of billions in physical damage, lost export revenues, and crippled tourism when its all said and done. I would strongly doubt their ability, let alone interest, in following through on all but the most lucrative investments for the foreseeable future.

I wrote this post to illustrate the difficulty of forecasting national priorities 10-15 years out, which can prove challenging for state support to long-range investments with lengthy development cycles. I wouldn’t dare try to prognosticate the world in 2040, America’s role in it, or its most pressing challenges of that era. But I maintain a core conviction that this presidential administration needs to put as much effort into supply chain vulnerabilities we can forecast into the 2030s…as it does the urgent priorities of 2025-2026. De-prioritizing minerals just because Chinese can’t flip a switch today and choke off our supply is no way to run an industrial strategy.

Keep that in mind when I publish my next piece. I can’t promise it’ll land next week, but expect it soon.

Until then, keep on monitoring the situation.

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I was nowhere near the policy deliberations that created the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA), nor the administrative discretion in shaping them after those bills passed. So I can’t weigh in on the thinking that went into legislative language, and only saw the products of those deliberations.

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And even if I had been…hindsight is 20/20. I wouldn’t have been in a position to recognize the faults in program designs. But since policymaking is dynamic, and we’ll assuredly see continued changes to federal assistance programs…I figured I’d offer some substantive observations and critiques of the two bills as they pertain to minerals projects. These aren’t meant to be exhaustive across agencies and programs, but rather highly illustrative of specific high-profile policy tools.

When eyes are bigger than stomachs

I think you can boil most of the problems we ultimately saw with BIL and IRA programs down to several fundamental issues, all of which I think I’ve touched on at least a little in previous Tailings entries:

1. Democratic coalition politics fostered the now-maligned “Everything Bagel-ism,” which overburdened funding programs with tangential objectives that bogged them down with myriad checkbox exercises.

2. Climate imperatives to reach net zero emissions by 2050 meant decarbonizing everything, everywhere, all at once, which demanded spreading attention, manpower, funding, and political capital across too many technologies and applications.

3. Selling the “Green New Deal” to America writ-large and winning political insulation (in theory) meant making everyone in every geography feel like a winner, which meant lots of huge grant programs. And aside from some formula programs, grants needed to be competitive for the perception of fairness.

4. The bills passed at the tail-end of a cleantech bubble that had inflated private and public equity valuations in dozens of product categories, casting an appearance of strength or viability on many companies and projects that had neither.

I don’t really want to cover #1 in any more depth than I already did in my “Policy kayfabe” post. The “Abundance” crowd has that one covered.

Others can also better explain where #2 went wrong generally. For instance, I’ve already seen plenty of recriminations about the excessive effort and funding directed to hydrogen, direct air capture (DAC), and other carbon capture technologies. I understand the political “why,” but these misfires should serve as a cautionary tale for policymakers as they design future programming.

Rather, I’ll focus my critiques here on #3 and #4.

Everyone’s a winner

The Biden Administration came into office both promising a “return to normal order in Washington” and that the entire country would benefit from his major spending packages. The Infrastructure Investment and Jobs Act (IIJA) was an early testament to that commitment, picking up the Senate’s Republican-crafted surface transportation reauthorization bill from 2020, adding a bunch of clean energy spending programs to the legislation, and passing it with broad bipartisan support (hence the “BIL” moniker). While IRA passed the following year via reconciliation on a party-line vote, the programs were similarly structured to promote clean energy jobs growth in every region of the country.

I discussed this dynamic previously in “Policy kayfabe” and how it futilely directed awards to projects with poor viability prospects, largely to increase geographic coverage and political buy-in. Which…fine, that’s more or less how Washington has always approached spend on earmarks, defense, and other infrastructure. However, these are industries we largely expect private capital to fund, so the federal incentives need commercial alignment. And to send constructive signals.

For reasons I’ll discuss momentarily, DOE was inherently limited in the diligence it could perform on these projects. For early-stage R&D projects leaning on scientific merit, that’s fine. Sow a thousand seeds, hope a few bloom. For commercial projects, every award is a signal to capital markets and supply chain partners. And because securing federal financing support was all but existential for US projects in multiple energy supply chains, just about everyone applied. That created…issues.

If you hand out 100 grant awards to install electric vehicle (EV) chargers, the worst that can happen is some percentage get built, and some of those end up a waste of taxpayer money. If your core policy objective is to increase the number of charging stations, you’ll almost certainly succeed by some measure—it’s just a question of efficiency and overall effectiveness.

But if you hand out awards to five graphite projects, and the US market can really only support two them, you risk confusing capital markets and splitting support across all of them in ways that render all projects incapable of raising sufficient equity. Moreover, automakers were watching federal funding decisions for indications of project viability. I heard from more than one OEM that DOE’s awards to multiple companies for a particular battery mineral had complicated decisions about where to place their own chips. They performed their own diligence via product qualification, but had assumed federal grant selections were indicative of more robust commercial viability assessments.

Sowing a thousand seeds may produce positive headlines and talking points for more states and congressional districts, and insulate administrations against “picking winners” accusations, but may inhibit any one project from blooming.

Walking on air

Compounding these issues, the cleantech bubble formed during COVID provided a facade of viability on many energy sector projects. While few were as egregious as Nikola’s fraud-induced $30 billion valuation in 2020, an unprecedented wave of de-SPACs1 from 2020-2022 (see below) gave dozens of companies a sugar rush of strong public market valuations.

At the same time, a run-up in global transition minerals prices due to rapidly scaling EVs, batteries, and renewable energy production, as well as post-COVID supply chain constraints, sent many mining company stocks soaring. President Biden’s election and aggressive clean energy agenda may have added some fuel to the cycle’s peak, but this was fundamentally a China story.

More than once last year, I had to educate DOE political leadership that the US did not dictate global spot pricing. They were convinced all battery mineral pricing had been artificially inflated by “Biden’s Green New Deal,” had fallen to earth when that agenda “failed,” and wouldn’t recover without EV subsidies. No…it was China. China. China. I found worldview-affirming narratives tough to shatter even with clear data.

Graphite, manganese, cobalt, and nickel followed similar (not exactly the same) trajectories. Each ran up in 2021 and peaked in 2022, before falling back to earth.2 Copper similarly saw its current bull market start in the wake of COVID, with a temporary nosedive in mid-2022 before resuming rapid price growth.

It wasn’t just prices. Automakers chasing Tesla’s meteoric growth (and market cap) decided they’d race to hit what were, in retrospect, outlandish EV production targets by the 2020s. They (and Tesla) feared an inability to secure enough raw materials for battery production, and ran around inking poorly-conceived commercial agreements with junior miners.

I’ll note the automakers have all wisened immeasurably on materials sourcing since 2021, but it’s still wild to look back at the environment of just a few years ago. Ford alone had inked deals with six(!) lithium companies by the middle of 2023. Sourcing requirements in the IRA 30D tax credit amplified that dynamic, but wasn’t the only factor. Those requirements for both critical minerals and battery components also prompted the Asian Tier 1 battery manufacturers, seeking 30D compliance for their customers, to sign up their own offtakes.3

The result of all this? A lot of projects with large equity valuations, solid fundraising, offtake commitments from creditworthy customers, and policy tailwinds. And in most cases, it was nowhere near enough to get a project into construction, even with a sizable federal grant, 48C tax credit, or loan.

The anatomy of a poorly-designed grant program

This post feels timely, in part because DOE just opened up the third round of its BIL “40207” grants, aka the Battery Manufacturing and Recycling Grants. Or as we just called them…the “BIL battery grants.”

The latest round, at $500 million in total available funding, is the result of multiple projects already failing to advance and having their awards de-obligated. The Biden experience illustrates how things could’ve been done more effectively from the outset:

1. Offices that award financing for commercial projects need in-house commercial and financial expertise, not just technical staff

President Biden signed BIL late into 2021, and the administration clearly wanted to spin up funding programs as quickly as possible. While President Trump inherited a relatively well-oiled bureaucracy with ample appropriations runway last year, he left his predecessor with far less at the end of his first term.

New shops like the Manufacturing and Energy Supply Chains Office (MESC) and the Office of Clean Energy Demonstrations (OCED), both of which Biden’s DOE created using BIL program funding, needed to staff up from scratch. MESC pulled in career staff from DOE’s R&D program offices at launch (primarily the Office of Energy Efficiency and Renewable Energy (EERE)), and moved quickly to open its first solicitation for the battery grants.

MESC’s leadership and staff at launch were highly qualified technical experts, but largely lacked financial and market experience. Moreover, getting the first solicitation out quickly required modeling the program on other DOE R&D grants, albeit with a heavier weighting for commercial viability factors. While grant reviews pulled in experts from across the agency, and even external reviewers with financial expertise, the types of information requested and review timelines were inadequate to properly diligence projects.

2. Do not structure grants for commercial projects like R&D grants

As with other grant programs, projects are expected to submit budgets, provide commercial contracts with key suppliers and customers, and spell out fundraising plans. But panels of reviewers have no ability to vet project information. They’re not supposed to research companies and technologies outside information submitted by applicants. They can’t drill into project cost assumptions, rarely have the legal or commercial expertise to assess contract terms, and don’t have real financial models to understand impacts of grant funds on project viability or bankability.

Even as DOE recognized these shortcomings following its first round of battery grants, staffing up more commercial project expertise and requiring submission of more detailed financial information in the second round, the program structure was ill-suited for financial diligence. That would have required far more manpower, expertise, and interrogation of the project team, its consultants, and their data than DOE’s budget or review protocols would allow.

Moreover, R&D grants require projects to submit budget worksheets that amount to annual sources and uses forecasts, along with a series of stage gates as “go/no-go” decision points. For research activities or demonstrations with clear technical objectives, milestones, and potential for variance in the single-digit millions of dollars, this makes sense.

For commercial projects, pre-construction feasibility and engineering activities can increase budgets by tens or hundreds of millions of dollars. Customer validation steps needed to lock in binding commercial agreements can delay projects for many months. Heck, commercial circumstances can change entirely, forcing developers to rescope their projects. Budget sheets are not robust financial models, the assumptions and outputs of which will also dictate whether project sponsors can actually raise the quantum of private financing to meet cost-share obligations and reach a final investment decision (FID).

Those delays and rescoping exercises can also incur significant costs, warping project economics and potentially rendering grant awards inadequate to crowd in private capital (assuming the project should move forward at all). An ill-timed bout of materials and labor inflation in 2021-2022 drove up project costs for many of the Round 1 battery grant awardees, as well as some of our loan recipients. While DOE could potentially rescope and resize loans, grant awards were fixed amounts and still at risk of further upward cost pressures.

3. Solicitations should remain open and evaluate projects on a rolling basis, as funding is available

The narrow solicitation window meant sponsors needed to submit applications when a round opened if they wanted access to program funding, irrespective of their project’s readiness. That meant sponsors often submitted projects without the requisite engineering work, commercial development, or really any near-term path into construction.

Get the grant while the money is available, then figure out the next steps from there.

More extensive project diligence only occurred after award (technically “recommendation of award”) and prior to execution of a grant agreement. During that period, DOE staff would often learn applicants were…overstating some things. They would then need to baseline project milestones and condition funding tranches accordingly. Again, for speculative R&D projects, this approach is totally reasonable. You make bets on technical merit and theoretical value proposition.

For commercial projects, you not only risk sending signals of viability to projects that disadvantage more advanced (or credible) alternatives, but also size funding awards for projects prematurely. Recipients may expect they can renegotiate scope and timing after award, but neither are ideal from a policy standpoint.

Policymakers love generating national headlines by announcing large groups of projects with huge aggregate award figures, especially in even-numbered years. But we should push for longer solicitation windows awarded on a rolling basis, available until all funds are expended. While neither were perfect, both the DPA Title III and CHIPS offices evaluated projects and awarded grants in this fashion.

For starters, you can prioritize the projects that are most obviously capable and ready to move forward, without stretching personnel bandwidth (especially procurement and legal staff) across a large portfolio simultaneously. Also, office staff have an ability to properly diligence projects and negotiate scope before sizing awards.

Project sponsors themselves would almost certainly prefer to submit proposals when ready, versus scrambling to fork over six figures to a DC lobbyist so they can meet an arbitrary solicitation deadline.

4. Grants should focus less on total financing need, and more on derisking activities that increase bankability

When submitting a grant, applicants will - almost without fail - ask for the larger of 1) the maximum award size, or 2) the maximum federal share allowable of total expected project costs, which is typically 50% for commercial projects.

In other words, if the maximum award is $150 million, applicants will ask for $150 million. Unless their project is $200 million total, in which case they’ll ask for $100 million. The scope of support is arbitrary; they’re just seeking to grab as much federal grant money as possible to minimize their private fundraising need. It’s hard to blame them, but this is a bad way to design a commercial grant program. Grants should focus on specific needs.

Here, I’ll split applicants into two categories. There are experienced, mature manufacturers and miners with strong balance sheets who seek federal support to mitigate market risk and/or improve the financial return on investment for their projects. And then there are startups that still need significant derisking capital to crowd in external investment. They tend to be venture-stage companies that still need a hybrid of corporate and project fundraising due to technology and execution risk.

In principle, I don’t actually have a problem giving federal grant money to mature companies with the financial werewithal to self-fund projects. Because given the nature of modern Western shareholder capitalism, there’s a good chance they do need it to actually greenlight a project. I saw plenty of this with the 48C tax credits as well. Sponsors that expected something like a 2-3% boost in internal rate of return (IRR) with an award, with that being enough to push the project past their company’s internal investment threshold.

Otherwise, they’re just not going to build the project. That explains a number of the multibillion dollar awards from the CHIPS office for semiconductor fabs to major manufacturers. The Trump Administration has taken a…different approach here, which I’ll cover in my next post. But in any scenario, awards to these companies should involve diligence on robust financial models to demonstrate need.

For startups, junior miners, and other more speculative project sponsors, grants should serve as derisking capital. As I explained in “How to build a mine: Part 2,” nobody wants to finance a proper demonstration plant, offtakers are only willing to contract for larger production volumes, and very few of these startups raise sufficient capital to equity-fund those facilities. So project developers typically attempt scaling up to commercial plants without properly derisking their flowsheets.

Ideally, that’s where DOE should step in with grant funding. Rather than cover some portion of an entire commercial facility, perhaps defray the cost of detailed engineering, the “pilot” line,4 and some additional working capital. If there’s a need for federal assistance beyond that, leverage other tools. I want to save my equity discussion for next week, but remember that it’s a dilutive form of capital that can just as easily crowd out other investment as serve an additive function.

5. Agencies should not evaluate commercial projects for grant and debt financing separately

By the time I’d landed at LPO, the first round of battery grants had already been awarded. And it was already widely recognized that…mistakes were made in the program design. Despite standard language in program solicitations requiring project cost-share come from non-federal sources, many applicants seemed to be under the impression they could get both a DOE grant and loan for the same scope of work. They intended to use DOE MESC grant dollars in lieu of raising equity against DOE LPO debt, and using LPO debt to satisfy their MESC grant’s cost-share requirement.

Partially because projects costs rose substantially over the course of 2022 and partially because LPO’s lending was more valuable than a grant for higher-dollar projects,5 several recipients opted to abandon their grants in pursuit of DOE debt financing. Only one of them, Entek’s $1.7 billion battery separator plant in Terra Haute, Indiana, has been successful to date.

DOE internalized the experience, and in MESC’s second round, explicitly prohibited applicants from simultaneously pursuing a grant and loan for the same project. For LPO’s part, we didn’t want to expend staff bandwidth as a company’s backup option, and likewise informed applicants they could not advance their loan application while pursuing a MESC grant.

It was the wrong mindset, and resulted from an excessive (if understandable) desire to keep offices firewalled on information sharing and project decisions. The former of an overly cautious interpretation of the Trade Secrets Act, and the latter out of concerns for fairness in an open competition.

The third round of battery grants (now under the renamed “Manufacturing Deployment Office” (MDO)) has shifted to a better middle ground, allowing projects to receive both a grant and federal loan if scopes are clearly delineated and there’s no funding overlap. This approach allows for grant money to serve as de-risking capital and cover some activities ineligible for debt financing, while still allowing applicants to simultaneously pursue a loan for the project’s scale-up or lower-risk activities.

This approach is probably the best DOE can do under existing grant authorities. Moving forward, policymakers should look to legislative solutions that give the agency more flexibility to evaluate projects and deploy grants and loans as complementary mechanisms in a single financing package. Equity investors certainly will find these opportunities more attractive if sequenced and structured property.

Tax credit tug of war

Let’s shift gears to tax credits.

As the Biden team learned with the 30D tax credit, and the Trump folks likely will with the One Big Beautiful Bill Act’s (OBBBA) reworked 45X for battery production, sourcing requirements are a tricky business.

On one hand, we should want demand-side incentives to promote domestic or allied sourcing (or at the very least, non-Chinese suppliers). On the other, we need market scale to justify investments and imposing higher costs on producers means those costs pass on to consumers (much like tariffs!) and erode product demand. For certain material inputs, we simply don’t have credible alternatives to Chinese suppliers and won’t for some largely-unknowably period of time before those alternatives can secure project funding, execute, and qualify their products with customers.

During IRS rulemaking for 30D,6 automakers and battery materials producers pressed their cases for (respectively) less and more stringent foreign entity of concern (FEOC) guidance. The critical minerals agreement signed with Japan in early 2023 more or less solved for lithium, but automakers lobbied that, with no credible non-Chinese sources of graphite and few qualifying options on nickel and cobalt, they couldn’t possibly qualify for the credit. EVs would be more expensive, and demand for both those and batteries writ large would falter. The administration wouldn’t be able to hit its ambitious 50% market share objective for plug-in vehicles by 2030.

They were not entirely wrong. Moreover, with less downstream demand, there’d be weaker commercial cases for investment in domestic production of the very minerals and battery components the credit’s sourcing requirements sought to incentivize. The result of these “negotiations” with industry was a “transition rule,” temporarily exempting only graphite from content requirements until January 2027, and requiring OEMs to report auditable progress on qualifying ex-China suppliers.7

The reprieve predictably reduced the imperative for sourcing from compliant suppliers,8 and the Biden Administration turned to tariffs as a solution. As I discussed in last week’s post, the International Trade Commission mostly nixed that pathway earlier this month. And now the sourcing restrictions battle has started anew under the revised OBBBA 45X credit requirements for battery cell production.

We’re now nearly four years post-IRA without a resolution on graphite policy. Not a welcoming environment for investment capital!

Both automakers/cellmakers and graphite producers have valid points, and ultimately I don’t think the Biden Administration’s policy design could have adequately solved the problem. I’ll share more on my ideal solution when I cover graphite in greater depth in a future post.

On the topic of tax credits…

I’m not ruling out additional legislation supporting the sector, but aside from the still-pending EXIM reauthorization and potentially some things very narrowly focused on defense supply chains, I haven’t gotten the sense this administration is particularly interested in legislating new authorities. But in the event we see some of Congress’ proposals make headway, here are a few tax credit changes I’d like to see:

• Restore the permanent 45X PTC for critical minerals created under IRA.

• Steepen 45X for critical minerals to 20% for the first 5 years a taxpayer claims it, with the credit reverting to 10% after that.

I’d also consider adding two more tax credits to more broadly incentivize sector growth.

• First, a 5% mining9 PTC.

• Second, create an exploration ITC scheme along the lines of Canada’s. Or just expand the US tax credits that currently exist for oil and gas drilling. I am more ambivalent toward the structure and specific rates, but I’m sure others have better thought-out policy schemes to put forward.

You may ask with these generalized mining credits, “Why should we be subsidizing gold and iron mines?” Well, building a mining workforce through funding university programs and targeted federal initiatives is good and fine, but it’s slow and we just spent the past year bludgeoning our national academic infrastructure.

We need to fundamentally change the relationship between capital and domestic mining projects. Make this stuff more lucrative, the industry will find ways to grow and upskill its workforce. And while resources have different characteristics…geologists are geologists, chemical engineers are chemical engineers, metallurgists are metallurgists. It doesn’t matter whether they’re working with gold, iron, tungsten, or bauxite. They may need further specialization, but that’s easier when the base workforce already exists.

Final thoughts

This post ended up being much longer than I initially intended, in large part because I felt it important to explain in detail major status quo issues in policy design. I don’t want to say the BIL battery grants were a complete failure, because many projects are still active, and may yet prove critical links in the US lithium-ion battery supply chain. But do some googling (or ask Claude) for the status of the first round of these projects, and the track record isn’t great.

America was talking about “waste, fraud, and abuse” long before DOGE drove a clown car full of teenagers into Washington. But for critical industries, you know what’s as bad as wasting billions of taxpayer dollars on projects? Committing those billions to projects that never end up spending it. I think the “critical minerals race” framing is absurd and misrepresents our national challenge, but time is still money and urgency demands we deploy capital. Holding dry powder is losing.

The second round of battery grant awardees was stronger, and a testament to better preparation on both the agency and applicant side. Unfortunately, the Trump Administration left nearly all projects from both rounds in limbo for much of 2025 as it tried to figure out what it wanted to cut from DOE programs, all while its tariffs and attacks on EVs undermined project economics and commercial viability.

Even as it apparently recognized the need to support batteries for grid and AI needs later in the year, and publicly states support for these projects, I still have yet to see evidence the administration knows how it wants to handle the legacy Biden portfolio of projects. And frankly, just about everyone at or near commercial readiness was a DOE grant or loan recipient from 2022-2024. Little of near-term viability waits in the wings behind them if the Trump Administration doesn’t embrace these.

Finally, since we’re on the topic of BIL battery grants this week, I want to acknowledge the DOE staff’s supply chain expertise informing battery grant and 48C tax credit priorities. DOE got some big things right thanks to its strong in-house analytical capabilities, embracing a full value-chain approach to supporting domestic battery manufacturing.

That meant not just investing in battery minerals, separators, and electrolyte, but also essential chemical ingredients serving as precursors, solvents, and binding agents for those components. The Iran War and global supply chain fallout is exposing some of these vulnerabilities now, including polyethylene. I wonder if the Round 2 grant for Braskem’s Texas plant expansion is still moving forward…

See you next week.

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First of all, I’d like to share a word of gratitude. Whether you’ve been reading Tailings from the beginning, or joined me somewhere along the way…thank you. I didn’t have any real expectations for this project when I started writing in December. It is, as I said then, a way for me to share many of my observations from my time at DOE’s Loan Programs Office (LPO).

Many of you have reached out with wonderful feedback about my writings since, from startup founders and sector executives to industry analysts and reporters. And of course, former colleagues. I’ve been fairly candid about my knowledge gaps, and have tried to lean into topics as much as possible without getting too far out over my skis. So hopefully you’re finding these posts offer a decent balance of introductory and substantive commentary.

I haven’t yet discussed the extent to which my seat at LPO gave me exposure to other programs - and projects - across DOE during the Biden term. I and others at LPO participated in reviews for various grant and tax credit programs, expanding our sector visibility well beyond the scope of our own loan application pipeline.1 It helped us become better sector strategists, and appreciate the supply chain adjacencies, co-dependencies, and needs for increased federal focus.

That exposure also helped me understand why certain projects needed to secure grants or discretionary tax credits to advance commercial projects, even with strong corporate balance sheets. Also, where competitive grant programs fell short in enabling industry growth, and how we should adjust policy accordingly. DOE got smarter as the Biden term progressed, asking for more information oriented toward assessing commercial viability…realizing projects would still need to raise tens or hundreds of millions of dollars to reach construction.

This entry of Tailings is my deep dive into the Biden approach to minerals and broader industrial financing support. If you haven’t caught my past two posts in the series, “How to think about federal financing tools for critical minerals” and “Capital formation in minerals project finance,” they serve as something of a preamble, and are worth reading first.

I do need to offer another mea culpa. I want to keep each entry at a manageable length, and more than 4000 words into this one, I realized I would need to split it again. My schedule for pausing things in April hasn’t changed, but it just means I’ll have a shorter bonus post next week before I get to my take on Trump-era dealmaking.

With that, let’s get to it.

Explaining Biden’s industrial policy

I won’t rehash the entire three-legged stool of President Biden’s industrial policy (BIL, IRA, CHIPS), but some elements of those legislative efforts are worth highlighting as illustrations of the administration’s market-oriented approach.

America can’t build competitive industries without creating market conditions that crowd in private capital, and therefore it wasn’t sufficient to simply fire a money cannon at manufacturers. You need demand for their products, and more importantly, a market outlook that both investors find appetizing and lenders deem creditworthy. Where that market outlook still couldn’t offer the risk-adjusted returns necessary to enable project bankability, the Biden legislation kicked in different forms of subsidy.

I summarized most of these forms of project support a few weeks ago, and will reshare my table below. The Biden Administration’s favored direct support tools were investment and production tax credits, grants, and loans at very affordable rates. It complemented these supply side mechanisms with consumer subsidies, primarily in the form of different tax credits and regulatory requirements. These in turn would accelerate demand growth, give manufacturers a better shot at securing favorable offtake contracts, and offer a more favorable commercial package to prospective debt and equity financiers.

That wasn’t all, though. Workforce capabilities and availability have been a persistent constraint, so the administration created or expanded programs to redress it. Or in more tangential cases nodding to its political coalition, promoted or favored unionizing projects and inserted workforce requirements into grant programs. Site suitability and power availability emerged as constraints later in the term, though project cancellations have been freeing up many of these prime industrial sites.

I’ve largely focused on critical minerals and their downstream end uses to date, and haven’t covered adjacent supply chain components that constitute essential parts of the whole. For instance, you can’t engineer a successful graphite or battery cathode metals (e.g., lithium, nickel, cobalt) policy without accounting for other battery materials like separators and electrolytes, chemical precursors, and binding agents. You also can’t neglect the highly specialized equipment we largely rely on the Chinese to supply—or at much higher cost, the Germans, Japanese, or Koreans.

I’ll touch on these ecosystem considerations more in my next post when I cover some of the grants and tax credits in greater depth. Investors frankly don’t ask the questions they should about workforce availability and suitability. Banks certainly don’t.

While meeting with a Southeast state economic developer in 2023, I asked him how he sold project sponsors on his state for workforce availability at a time of acute skilled labor constraints. He said something to the effect of: “Every state is in the same boat; we likely can’t meet project needs on Day 1. We just point prospective companies to our metro population growth projections and hope they’re confident the people will be there when they start staffing.”

Prospective lithium or graphite project investors also aren’t concerning themselves with the buildout of lithium-ion battery separator or electrolyte capacity. They’re looking at project fundamentals and market considerations, such as competitive landscape, demand growth, and product-market fit. Ultimately those are the factors that shape their views of risk-adjusted returns.

Making projects bankable

As project developers plan their capital raise for commercial projects, they’ll start with market opportunity and competitive landscape, rough order of magnitude (ROM) costs of project construction and operations, and various passive and discretionary federal incentives.

Which brings us to…

Biden tool #1: IRA tax credits

After IRA’s passage in 2022, critical minerals projects could claim a 10% production tax credit (PTC), including all input costs associated with production of the 50 minerals on the 2022 Department of Interior list. The IRS final rule in September 2024 confirmed the credit applied to mining activities as well as processing, though placed guardrails against vertically integrated mining companies claiming a double benefit.

That 10% factored into financial models on the other side of the ledger from operating costs, and as a permanent tax credit, was something any project developer could expect to eventually receive no matter how far from production they were. With the One Big Beautiful Bill Act (OBBBA) imposing a sunset on the credit, the Trump Administration effectively rug-pulled domestic projects in development.

Projects across the critical minerals landscape could also pursue the $10 billion made available through 48C investment tax credits (ITC), structured like a competitive grant program and managed by DOE. Project sponsors could apply for a credit worth up to 30% of eligible capital costs associated with equipping manufacturing facilities in energy supply chains. The credit was available to projects across many industry segments, but uniformly required projects waive their right to claim any PTC (in this case, 45X) should they utilize the 48C ITC.

From the vantage point of trying to get projects financed and into construction, I found 48C more effective than commercial facility grant programs, in large part because the amount of financial and technical information required of applicants necessitated projects be fairly advanced in development with a complete bill of materials (BOM). While the credit’s four-year clock from time of award to placing equipment in service will likely prove too inflexible given the reality of industry setbacks, the credit could represent as much as 15-20% of a project’s capital raise requirement.

Projects expecting to receive 48C (i.e., awarded but not claimed) or 45X tax credits could use these for project financing in multiple ways. They could incorporate the credits into their project cash flows, improving the forecasted project financials they put in front of lenders and equity investors. They could sell the credits (tax equity) to investors using IRA’s transferability allowances, raising project equity with some discount for likelihood of project completion and time value of money. They could also draw short-term debt against the 48C ITC, expecting to claim the credit before projects started commercial operations. Or finally, they could build the credits into their product pricing structure, effectively passing discounts to customers in exchange for offtake commitments.

Biden tool #2: Demand support

Most BIL and IRA energy programs contemplated both supply and demand, providing simultaneous support to each side of the market. As I noted last week, the Biden Administration leaned hardest into specific critical minerals in EV and renewable energy supply chains—and not just because these directly supported the president’s climate agenda.

Electric vehicles, batteries, solar panels, wind turbines, and other clean energy products offered rapid market growth and supply chain onshoring opportunities. Upstream mining and midstream minerals refining projects could ultimately serve downstream manufacturers with large domestic markets. The 30D consumer tax credit for new electric vehicle purchases also embedded battery content sourcing requirements for critical minerals and other components for tax credit eligibility.

Automakers signing long-term offtake contracts for battery and magnet materials pre-dated the IRA incentives, but the increase in domestic downstream demand was significant in both project siting decisions and new offtake agreements with qualifying suppliers under a complex set of rules.

I saw both firsthand, with projects initially expecting to site outside the US free trade area (FTA), particularly in Europe and Southeast Asia, deciding to move minerals processing to the US for qualification. And while 30D rules allowed project siting in Mexico or Canada for battery components and across the US FTA for minerals, the addition of 45X PTC, access to the 48C ITC and DOD/DOE grant programs, and cheap debt from LPO redirected multiple refinery projects into the US.

Syrah Technologies’ anode processing plant in Vidalia, Louisiana, which vertically integrates feedstock from the company’s graphite mine in Mozambique, pre-dated the IRA credits, but served as a model for many other Australian junior miners seeking concessionary financing for their projects across the Southern Hemisphere. I’ll explain next week how this approach fared, but the project attraction impact was undeniable.

As I noted in my last post, there’s simply no universe in which American rare-earth magnet manufacturing startups gain commercial traction over the past 5-6 years without strong EV sales growth and expected demand. That also pre-dated IRA, but was broadly supported by the various tax credits supporting EV (30D, 45W, 25E) and wind turbine (45Y, 48E) market growth.

Domestic magnet producers benefitted from other forms of federal support as well.

Biden tool #3: Trade actions

I would distinguish President Biden’s trade actions from those of the first Trump Administration in their targeted nature for critical minerals. While Trump levied Section 232 tariffs on aluminum and steel in 2018, and aluminum is a designated critical mineral, those tariffs were more conventional protectionist measures intended to support domestic production for large volumes of material in construction, industrial, and consumer end uses.

Biden’s 232 investigation into rare-earth supply chains in 2021 mapped the supply chain’s vulnerabilities primarily vis-a-vis China, setting the stage for subsequent administration actions. Ultimately, he levied Section 301 tariffs on imports of Chinese permanent magnets in May 2024 (alongside other products), which took effect in January 2026. That 25% tariff alone wasn’t enough to fully bridge a cost differential with Chinese manufacturers, but I can attest has increased the appeal of downstream manufacturing investment.

Likewise, the administration in 2024 moved to levy 301 tariffs on Chinese natural and synthetic graphite, setting a 25% rate on both. It launched antidumping and countervailing duty (AD/CVD) investigations into Chinese manipulation of the graphite anode market later that year. We’ve seen the outcome of these investigations only recently, with the Department of Commerce last month announcing a final determination of an additional 160% combined AD/CVD rate, only to have them nixed by the International Trade Commission last week.

It’s true the second Trump Administration has taken a far more aggressive approach to using various tariff mechanisms in support of minerals objectives, and I’ll discuss tariffs in greater depth when I cover his approach to the sector. But I do want to emphasize that Biden also moved in that direction for priority materials, albeit more deliberately…in large part because it didn’t want to impose higher costs on downstream manufacturers and impair market growth.

Similarly, the Biden Administration also responded to downstream industry concerns about availability of refined battery critical minerals for 30D tax credit qualification, which required sourcing from countries in the US free trade area, by signing a critical minerals agreement with Japan in 2023. International project developers frequently asked me in 2023-2024 whether other deals could be in the offing (particularly for Indonesia and the Arab Gulf states), and I had to relay “highly unlikely.” The Japan deal created heartburn with domestic interests, and, as I understand it, soured the Biden team on additional one-off deals.

Other initiatives, like the State Department’s Minerals Security Partnership (MSP), were largely ineffective at crowding in project financing, but important diplomatic first steps to align the US and its allies on developing projects outside Chinese control and influence.

Biden tool #4: Grants

I’ve covered several grant programs in prior posts, including R&D grants from DOE, earlier-stage mining and processing plant project grants from DOD under the Defense Production Act Title III program, and…at a very high level…the DOE Battery Manufacturing and Recycling Grants (aka “BIL Battery Grants”).

Grants are, of course, not a Biden innovation. The role of federal grants in industry R&D2 funding extends back many decades, shouldering much of the investment burden for longer-shot technologies and projects with great potential payoff for national industries. We’ve also used grants for civil and commercial projects during economic crises and other periods of sustained infrastructure buildout.

No…the Biden Administration’s unique approach was the scale and breadth of its competitive grant programs across the energy sector. These were considerably larger than what President Obama’s American Recovery and Reinvestment Act (aka “The Obama Stimulus”) offered, and mirrored the scale of Depression-era programs. While the “Green New Deal” moniker became a political punching bag, the sheer reach and potential impact of his grant programs was staggering. Grants for startups to build their first commercial projects, grants for state and local governments, non-profits, Indian tribes, and other community groups to buy or scale zero- or lower-emission products, and grants to mature manufacturers for scaling new product lines in support of clean energy supply chains.

Putting aside social factors (jobs, environment, investment in historically disadvantaged communities), these grant programs all in some way, shape, or form aimed to accelerate technology adoption by derisking manufacturing and deployment. They offered both supply and demand support, and without forcing manufacturers or consumers to accept a higher-cost product through regulation. Everyone wins, in theory, and with broad distribution of awards across the country, the administration could make almost everyone feel like a winner on a rising tide.

For minerals, most of the administration’s commercial-scale focus was on battery supply chains, specifically lithium-ion chemistries. The $6 billion battery grants program offered applicants a minimum of $50 million, with project cost-share requirements of at least 50%. While not its sole program, DOE established the Manufacturing and Energy Supply Chains Office (MESC) after BIL’s passage, with a mandate of rapidly standing up the battery grants and advancing its first round of awards in 2022.3

Over two rounds from 2022-2024, MESC awarded $5.8 billion to 46 projects across the battery supply chain. While the Trump Administration has gone to incredibly petty lengths to erase records of Biden era activities on official websites, you can find Round 1 awards here and Round 2 here.4 These grants offered what amounted to non-dilutive equity that could support up to half a recipient’s expected total project costs, though most applicants underestimated those.

Many of these grants are still active, and as with much of the Biden legacy, it’s still too early for definitive scorekeeping. That said, some shortcomings are already obvious, both in terms of how the programs were structured and how the tools fit into the capital stack. I’ll be covering that in greater depth next week.

But at least in theory, the size of these grants would meaningfully curtail a recipient’s private capital raise requirements and increase project return profiles for investors. For startups, these grants intended to help them bridge the proverbial “valley of death.” For mature manufacturers, the grants boosted a forecasted internal rate of return (IRR) needed to sell projects to corporate leadership. The reduced capital raise requirements also improved recipients’ leverage with lenders, and should have helped them secure debt financing on more attractive terms.

If not, they could forgo grants and pursue the alternative offered by the Biden DOE.

Biden tool #5: Loans

At some point, I imagine someone will write the definitive book on LPO, from its roots in the George W. Bush Administration through its first heyday in President Obama’s first term, then its long quiet period after the Solyndra collapse, and finally its revival and reloading in the early days of the Biden Administration.

All in all, LPO closed loans or conditionally committed more than $100 billion during the Biden term, nearly all of it in 2023-2025. Critical minerals projects comprised more than $9 billion of that total.5 Beyond that, most of LPO’s portfolio was supportive of the domestic industries necessary to grow demand for domestically produced minerals and intermediate products.

Some of the corporate press releases and SEC 8-K filings for DOE loans to (US) publicly traded companies can give a sense of how these loans were structured, though covenants, amortization schedules, collateral, and other terms aren’t in the public domain. What I can say is:

• There was not a single minerals project we financed that was investment grade with a creditworthy parent guarantee. Welcome to the sector. In other words, you were almost certainly looking at interest rates north of 10%, compared with a flat Treasury rate under our Advanced Vehicle Technologies Manufacturing Program (ATVM). All critical minerals projects with the exception of Michigan Potash were financed under ATVM.6

• Absent other strengthening factors (creditworthy parent guarantee, collateral, etc.) commercial lenders generally won’t offer tenors (terms) beyond offtake commitments, and certainly not beyond product cycles or useful asset lives. For manufacturing projects, we told applicants to expect roughly a 10-year tenor, which was generally better than commercial lenders could offer them. That said, credit terms were all subject to diligence and repayment expectations. Thanks to my new friend Claude, I’ve illustrated what a standard 10-year tenor looks like with 10% interest versus today’s 10-year Treasury rate. A project of this scale (let’s say $500 million in debt on a $1 billion total project cost) might generate $150 million to $200 million in annual revenue, so reduced interest payments alone could be worth 15-20% to margins in the first couple years of operation. After factoring in a construction and commissioning duration of 2-3 years, two years that might be an investor’s entire time horizon before expecting to exit their stake.

• LPO has other traditional underwriting levers at its disposal to further extend support on a discretionary basis, including upping its debt-to-equity (DTE) ratio to the statutory maximum of 80%, allowing capitalization of interest accrued during construction (ultimately used on all minerals projects), sculpted amortization to preset debt service coverage ratios (DSCR), and pairing extended tenors with cash sweeps. The latter minimizes scheduled principal and interest payments to give a project more operational runway in tough times, while capturing some percentage of profits in upside scenarios to accelerate debt repayment. In other words, give projects a better shot at success without just making investors rich off government latitude. Here’s the same project, but now with a 20-year tenor. At the bottom of a commodity cycle where the project may struggle to break even, the reduced debt repayment is now worth up to 30% of revenues. In boom times, much of the additional profit is swept into repayment of principal, and shortens the effective tenor. The loan gets repaid in 12 years instead of 20, etc.

  

• LPO could reach a conditional commitment with just a front-end engineering design (FEED) study, but would not close a loan without detailed engineering completed. Unlike earlier stage gates in the LPO process, or the letters of intent (LOI) with “indicative terms” we frequently see issued by other federal financing agencies, an LPO conditional commitment involves months of intense diligence involving technical, financial, market, and legal advisors. Investors recognized the substantial endorsement it signaled. But only with detailed engineering could we lock the financial model’s assumptions, properly size the debt, and finalize various reserve accounts for contingency and collateral. Otherwise, the project’s potential cost variance is too high to effectively underwrite.

• LPO under the Biden Administration fundamentally embraced an enablement approach to projects deemed to be of national importance. Project return on investment was measured in traditional lending terms—repayment with interest, but also creation of new industries, mitigation of supply chain vulnerabilities, and jobs creation. The government should involve itself as a lender because we want to see projects succeed, not to maximize capital returns. As I said last week, this is where the Biden team embraced an economic developer’s mindset.

Finally, I’ll note that the US Export-Import Bank (EXIM) and International Development Finance Corporation (DFC) were also active in minerals financing during Biden’s term, though statutory restrictions on loss cap for EXIM and countries in which DFC could then operate (only nations classified as “developing”) severely restricted their mandate to lend. Both faced similar challenges of international project maturity as well, going up against a far more aggressive risk appetite from competing Chinese financing.

Leaning in to compete with China

A critic might argue these loan features were excessively concessional. Especially since, unlike the Trump Administration, the Biden team didn’t pursue greater monetary upside (i.e., equity) for the US Treasury than loan interest. However, relatively few projects made it through to conditional commitment in the first place, and fewer have raised the equity necessary to close—even with LPO’s favorable financing. If anything, you could argue DOE failed to take enough risk due to its scars from the Obama-era failures of Solyndra and Fisker.

As I noted in my last Tailings post, banks concern themselves solely with debt repayment; investors expect a specific return profile. Extending DOE’s lending authorities to their limits for projects of strong national interest increased the likelihood of crowding in necessary private capital. Executing a term sheet for federal financing might boost a company’s stock price, but doesn’t guarantee project financing will materialize. (Something to contemplate before I cover the Trump era.)

I can also assure you, whatever “concessional capital” LPO has offered critical minerals projects, it pales in comparison to what China has systematically subsidized over the past several decades. DOE was under most circumstances prohibited from mixing LPO debt with other federal grants or agency offtake (e.g., DOD procurement), though could do so under ATVM, provided financial modeling demonstrated a project was commercially viable absent that federal support.7

Production tax credits provided a base level of financial support to improve project economics, and deployment/consumer tax credits along with general “pro-cleantech” policies fostered a stronger commercial ecosystem for upstream and midstream supply chain projects. In certain cases, trade barriers provided a bit of additional insulation against Chinese competition.

And then after layering those tools, grants and low-cost loans (and potentially 48C tax credits) on a discretionary basis substantially reduced the cost of debt or quantum of equity financing necessary to fully fund projects. The inability to combine DOE lending with grants was, in my opinion, the most glaring deficiency in the Biden toolkit. Some Biden DOE alums have argued these were administrative not statutory constraints, and the agency should have more aggressively used its Other Transactions Authority (OTA) to better leverage its tools for project enablement.8

Final thoughts

While mining and industrial sector investors have taken a shine to the Trump minerals financing agenda thus far, it’s not their first bout of euphoria this decade. The Biden package of IRA tax credits, grant programs, market support, and open door for federal debt financing drew praise at the time as well.

That mood soured in 2024 with battery mineral prices in the gutter, corporate valuations crashing alongside them, many developers unable to raise project equity, and some Biden Administration priorities conflicting to slow decision-making. And as I noted in a previous post, most of the federally-designated critical minerals simply didn’t have viable projects to finance and still needed grant funding to complete feasibility work.

I’m not weighing in on legality of President Trump’s deviation from legislative intent for various grant and loan programs, but will note that the new funding flexibility afforded agencies on a discretionary basis is something needed for many projects. If not legal through existing OTA powers, Congress needs to legislate it with guardrails.

I’ll explain why next week, where I’ll better illustrate where I think the Biden Administration got things wrong. I’ll discuss BIL grant programs and IRA tax credits, with a more pointed critique of how their design failed to deliver intended results.

See you then.

Much has already been written about Joe Biden’s legacy as president, and his administration’s failures to translate what was undoubtedly an ambitious industrial policy into electoral success for his party.

We’re just more than a year removed from the end of his term, and so most attempts at categorically judging certain programs or policy initiatives are likely premature. I certainly won’t be doing so here. But I do think we can highlight failures to boost certain industries or project categories, or explain away more isolated project failures.

Where I give the Biden Administration an immense amount of credit was their economic developer’s mindset in trying to build industries or accelerate their growth. The results have been uneven, and in some cases were hampered by embracing too many objectives all at once, but I don’t think we can succeed in our national objectives without embracing that economic development mindset in principle.

This is a theme I’ll frequently revisit in my posts from here on out, and a contrast I’ll make between the Biden and Trump approaches to the sector:

Biden the economic developer. Trump the private equity dealmaker.

A good economic developer is competitive, results-driven, and savvy as a negotiating counterparty. But also, fundamentally a growth-oriented public servant trained to think about returns on investment (ROI) beyond direct capital returns. Jobs created, industries development, workforce skilling, economic clustering, consumer and tax base growth, and project success.

A good private equity (PE) financier deploys capital quickly and ensures returns to their limited partners (LP) meet expectations. That’s more or less it. There are of course different flavors of PE, and I’m probably oversimplifying things in ways that will prompt eyerolls from the finance pros reading this, but you can see a clear pattern emerging in the deals the Trump Administration has consummated to date. Particularly the demands for equity as collateral and product pricing guarantees (i.e., price floors) that appear oriented toward investor internal rate of return (IRR) targets.

I’ll leave it at that for now, but I wanted to at least give broad strokes before discussing the project capital stack. We’ve yet to see how the Trump Administration is approaching ecosystem or value chain development beyond perhaps rare-earths, versus its rapid flurry of dealmaking. But the Biden team’s approach on that front was crystal clear—at least where it chose to focus its efforts. The next two posts will better illustrate that juxtaposition.

Building the capital stack

There are really four discrete approaches to building and growing a national industry.

1. Clear government out of the way, deregulate and slash taxes across the board.

2. Provide government support on the margins for the sorts of enabling activities that don’t generate financial returns for investors (i.e., early-stage R&D, infrastructure, workforce training), while mostly remaining hands-off on core business activities.

3. Provide direct government support to favored sectors to the extent necessary to incentivize (“crowd in”) private capital.

4. Anoint champions and subsidize them to the extent necessary to produce what policymakers deem optimal.

Though many a libertarian will scream #1 has never been truly tried, it just doesn’t work. And while proponents of many incumbent sectors (*cough* fossil fuels *cough*) will boast they don’t need the subsidies flowing to their alternatives, they either haven’t picked up a history book or are lying.

#4 is the refuge of central planners, and the 20th Century offers plenty of examples as to why Americans reject this philosophy for Plans A through D. Only in rare instances where there is truly no good market-oriented solution do we even try.

For most of American history, we’ve oscillated between some variant of #2 or #3, with policy momentum since the start of the Biden Administration shifting decidedly toward the latter. The CHIPS Act showered semiconductor manufacturers with massive subsidies to coax otherwise reticent companies into green-lighting multibillion dollar projects. Similarly BIL and IRA threw overwhelming support to battery and solar panel manufacturers, sweetening the pot for mature foreign incumbents to invest in US plants.

I summarized most of these forms of project support a couple weeks ago, and will reshare my table below. The Biden Administration’s favored direct support tools were investment and production tax credits, grants, and loans at very affordable rates. It complemented these supply side mechanisms with consumer subsidies, primarily in the form of different tax credits and regulatory requirements. These in turn would accelerate demand growth, give manufacturers a better shot at securing favorable offtake contracts, and bring a more favorable commercial package to prospective debt and equity financiers.

For startups, or riskier expansionary programs for industrial conglomerates, the Biden program offered competitive grants and discretionary tax credits (48C) to adjust the risk calculus for lenders, equity investors, and corporate decision-makers. Low-interest, long-duration debt financing tools had been fixtures since the Bush and Obama administrations, and was expanded to support all categories of manufacturer or producer.

These tools layered on what had been long-extant forms of state support associated with #2, crafted by state and regional economic developers. Free or heavily-subsidized land acquisition, favorable power tariffs coordinated with local electric utilities, steep tax benefits, infrastructure investments such as highway interchanges and rail spurs, and workforce development programs…all tied to following through on investment commitments and jobs creation.

Meeting financiers where they are

We still face a fundamental challenge in US policy discourse with too many Americans anchored to the notion government regulations or general tax rates are inhibiting investment in critical sectors. In reality, it’s not the 1950s anymore, or the 1980s. Few financiers are willing to deploy capital into risky assets without the prospect of outsized returns. And even if individual manufacturers are currently trading in public markets at absurd multiples, these businesses almost universally represent poor risk-adjusted returns relative to software or other trendy targets of financial engineering.

Therefore, we need government incentives to level the playing field for these businesses against other repositories of investment capital, increasing their anticipated return profiles to draw in investors. I’ve already talked about corporate fundraising at some length in my two “How to build a mine” entries (here and here), as well as in my entry on innovation in critical minerals mining and processing. But whether or not the tools were properly sized and designed to meet their objective, the Biden approach largely aimed new tools at financing for demonstration stage or commercial projects. And it’s those later-stage projects I’ll focus on here.

Companies will pursue both equity and debt simultaneously when seeking project financing, though they feed off one another.

A favorable debt facility will minimize both 1) the equity raise needed to fully fund a project, meaning less shareholder dilution and greater potential returns for an individual investor, and 2) the principal and interest payments required of a borrower, freeing up larger cash flows that can be returned shareholders.

A stronger equity raise both 1) signals to lenders that companies may have easier access to additional capital in the event of project cost overruns or downside operating scenarios, and 2) increases the pool of cash available to trap as borrower collateral, increasing a lender’s comfort in extending more favorable terms.

But lenders and investors ultimately have different thresholds. A bank sets clear return profiles—strictly whether a borrower can generate enough revenue to cover financed capital costs and interest, after also subtracting operating costs and any other royalty or debt obligations further up in the cash waterfall.1 Equity investors expect returns above and beyond the cash flows necessary to generate a simple profit, and those return expectations scale with a project’s risk profile.

Oftentimes, project cash flows alone aren’t sufficient to deliver adequate returns, and investors may demand their own royalties sitting above general distributions to shareholders, corporate equity, or other collateral as conditions for investment. Mezzanine debt may similarly layer into the capital stack to squeeze additional value2 out of a project. Different classes of investors may expect different return profiles, and some (particularly in private equity) are downright predatory with such onerous demands that projects have little chance of success. And if/when they fail, equity investors have siphoned enough revenue from the project and secured enough collateral in liquidation to hit their fund’s return expectations.

They would argue that’s just the price for access to capital. I would argue it’s a policy challenge for industries we want to grow or sustain.

All of this is to say, raising capital for project financing is extraordinarily challenging for higher-risk supply chain projects. Critical minerals in particular, generally facing immature or outright broken markets, are not inherently creditworthy. Government support needs to fundamentally alter both credit risk and equity return profiles for project success. We should not, as a general principle, want projects of high national value striking financing deals in desperation.

Enhancing project bankability

As developers plan their capital raise for commercial projects, they’ll start with the landscape as is. Market opportunity and competitive landscape, rough order of magnitude (ROM) cost of project construction and cost of operations, and passive federal incentives.

They’ll decide to advance the project, draw in enough early-stage investors to fund engineering studies, and begin site evaluation as project needs manifest. Obviously upstream mining projects are constrained by the geography of their resource, but standalone processing plants and other manufacturing facilities will site where developers determine most advantageous. I mentioned some of these factors earlier in this post, as well as in “Policy kayfabe” several weeks ago.

State and local economic developers have two sets of tools to attract and strengthen projects: those that directly defray project capital and operating costs, and those that strengthen the project’s operating profile and likelihood of success. The latter involves workforce development programs designed to directly support project hiring and skilling, complementing longer-term regional investments in universities, proximity to suppliers and customers, and operations-enhancing transportation infrastructure. Georgia, for instance, benefits from Delta’s headquarters and strong relationship with the state. There’s a reason Delta maintains direct flights from Atlanta to Stuttgart, Germany (Mercedes and Porsche North American HQs) and has increased direct flights to Seoul, South Korea in recent years (Hyundai, SK On, Hanwha Qcells).

But the economic developer’s primary toolkit involves land acquisition and site development grants, infrastructure improvements, property and sales tax abatements, corporate income tax credits indexed to hiring and capital investment, and collaboration with various utilities to secure favorable rates and lower operating costs. The extent of monetary or in-kind support depends heavily on state and type of project. Obviously a $300 million minerals processing plant won’t fetch the same incentives as a $5 billion vehicle assembly plant or battery gigafactory, or a $20 billion semiconductor fab.

At this point, projects can expect to benefit from federal tax credits and generous state and local incentives, and what are hopefully justifiable expectations of robust market demand and broadly healthy macroeconomic conditions. Even then, we at the DOE Loan Programs Office (LPO) found minerals projects still largely unable to raise the balance of debt and equity capital necessary to advance projects into construction.

Project developers lacked the balance sheet or credit history to secure affordable debt, and if they could get a loan, they’d draw 10%-12% interest rates (or higher). Equity raised was almost entirely at the corporate level. For most critical minerals projects, the actual project and its corporate sponsor are virtually indistinguishable from a balance sheet and creditworthiness perspective, but some companies retain intellectual property (IP) and other speculative assets that offer corporate investors slightly more upside.3 With few other options, they near-universally turned to direct federal assistance programs for project financing support.

For both grants and loans, we looked at the complete package of private financing and state/local support project developers brought to the table as measures of likely success. We’d require they submit all of these documents as evidence of support, and also to better understand actual terms and conditions (i.e. concreteness). Same for any offtake and supplier contracts they’d already executed, or progress toward securing them. Letters of intent (LOI) and memoranda of understanding (MOU) are commercial agreements, but are of little value from the standpoint of financing.

Similarly, binding offtake agreements are ideal, but there’s a broad spectrum between a two-year option agreement with discounted product pricing versus a five-year take-or-pay4 arrangement with price floors. In an ideal world, sponsors would come to LPO and other federal debt financing agencies with most project equity already raised, but we found as the Biden term progressed that this simply wasn’t realistic. Especially as metals prices started their rapid descent in 2023-2024, and financiers regained an acute awareness that China could wreck a project’s operating economics effectively overnight.

With few exceptions, investors wouldn’t touch projects without a strong credit facility extended by the federal government, offering longer tenors and higher leverage (i.e., debt-to-equity ratio) than banks would afford.5 And at significantly lower financing rates. In my next post, I’ll cover some of the mechanisms we employed in attempting to crowd in investment capital—without significantly increasing the risk of losses.

However, even with favorable debt financing, equity investors still need to see the right risk-adjusted return profile to commit hundreds of millions of dollars in capital to these projects. Again, this isn’t just about breakeven costs. Depending on the class of investor, they could demand to see an expected IRR of anywhere from 15-25% for minerals projects, adjusting for perceived risk. You hardly ever see a junior miner’s feasibility study and investor prospectus claim anything lower than a 20-22% IRR in a “downside scenario.” (Which, as I’ve stated in previous posts, are rarely grounded in reality.)

And that highlights most significant hurdle to critical minerals project financing, as well as the most unsettled questions in the sector today.

• How much risk should the federal government be willing to embrace so private capital can hit investor return targets?

• And to what extent should the federal government demand upside in exchange for its risk-taking?

It’s not implicitly our federal government’s responsibility to assume all project risk just so financiers can make more money. However, Americans (mostly) agree the state shouldn’t be dictating investment except in the most exceptional of circumstances. So…returning to my original four-choice framework, we end up with policy disagreements along the spectrum of #2 and #3. For projects we know we want to build, how much are we willing to subsidize a project for some corporate sponsor or external investor’s hypothetical IRR target?

We’ve already seen a wide divergence between the Biden and second Trump Administrations on these questions, and the latter may further evolve its approach. We should assume the next administration will need to grapple with and define its own philosophy and operating principles.

Final thoughts

As I alluded at the top, I had intended to cover the Biden program in full when I started writing this post. But I really don’t want to subject anyone to 6000 words in a single sitting.

My writing cadence will slow from here, unfortunately. Expect my post on the Biden program next week, followed by its sequel on the Trump approach around the end of the month. And then I’ll shut down for April as I need to turn to other professional obligations. I can’t promise I’ll be back to a one-a-week cadence after that, but should be publishing new content regularly through May, and potentially June.

There’s an advantage to my slower writing pace, though—a lot is happening in this sector right now, especially with the Trump Administration’s major policy initiatives. And its military actions. I’ve noted I plan to write about aluminum as a standalone topic, and this ongoing Iran conflict has already exposed the need to diversify that supply chain. We’ve seen other significant actions by the US and its allies on graphite, rare-earths, and a group of other metals targeted for an effective “price floor” scheme in just the past few weeks.

I’ll be able to incorporate those developments as I move forward. See you next week…for real this time.

Before I get into it this week, I think a bit of roadmapping is in order. When I started writing Tailings, I expected to publish a series of 8-10 posts, but gave myself flexibility as the project evolved. Well, we’re already on the eighth entry, and I feel like it’s just the halfway point. Which means I should be at this at least a couple more months.

This will be the first of three consecutive posts I plan to publish specifically on critical minerals financing—particularly the tools we’ve seen deployed by the Biden and Trump Administrations to date. After this series, I’m planning individual posts on lithium, rare-earth elements, graphite, and aluminum…all as exemplary of different challenges and opportunities in the sector. And then finally, I will likely wrap the series up with one or two 30,000-foot sector-level posts. Plans are subject to change, but that’s how I’m thinking about things for now.

Let’s get to it.

The federal toolkit

Ever since the COVID-19 pandemic roiled global supply chains and triggered a bipartisan rethink of state intervention in our industrial economy, we’ve seen the Trump, Biden, and second Trump Administrations employ new tools at home and abroad in the service of US mineral security.

Previously, we’d limited support to defense stockpiling, research and development in materials science, and information gathering (e.g., geological survey work) to help prospectors with early stage project development. I’m not the first to state the obvious - that Washington was far too slow to respond to a massive set of problems decades in the making - but the financial and other commercial support mechanisms employed over the past six years are more extensive and varied than anything we’ve seen since the mid-20th Century.

Each of these comes in different flavors, but generally speaking we’re talking about the following tools:

• Grants

• Loans

• Tax credits

• Trade barriers

• Direct procurement

• Indirect demand support

• Equity stakes

And then there are even multiple specific mechanisms within each of these categories. I could probably write a post on each individually, but neither you nor I want me to do that. Since plenty of think tanks and other industry analysts have been writing up explainers on these tools for the past few years, I’m going to refer you to their prior work for more detailed explanations (See here, here, and here, for starters). And then I’ll just leave you with this summary table I’ve created.

We’ve now seen flavors of each of these tools employed by the US federal government over the past two administrations. Some are more appropriate for early stage project development, others for scaling commercial deployment, and others still as stabilizing mechanisms for existing producers.

Each also offers different signals to project developers and investors. Grants and discretionary tax credits like 48C (which operates very much like a competitive grant program) come from limited appropriations. As do the more tailored forms of direct project support we’re seeing from the Trump Administration now—producer price support, equity stakes, and direct purchasing for stockpiling…although the new ‘“Project Vault” initiative appears structured as a working capital loan. These mechanisms create a frenzy of sorts, with companies racing to shake the money tree while it’s giving, and ensuring they’re not boxed out by competing projects.

The Department of Energy (DOE) Loan Programs Office (LPO) and other federal lending agencies have appropriations, capped loan authority, and other duration restrictions, but are largely (correctly) seen as available to prospective borrowers on any relevant time horizon (i.e., after several years of project development). Similarly, certain tax credits like 45X1 and market growth for downstream demand drivers like lithium-ion batteries sent long-term signals to investors of economic upside, even if projects were years away from construction.

Tariffs are more complicated, as we’ve seen some prove stickier than others. President Trump’s aluminum and steel tariffs from his first term remained intact through the Biden term, and to a small degree boosted that administration’s re-shoring efforts. Ditto President Biden’s rare-earth magnet tariffs (more on that shortly) that just went into effect and are unlikely to roll back. But they rarely influence project investment decisions on their own; capital providers view them as too easy to dial back with a single pen stroke.

Ignore the scoreboard

The most offensive sector commentary I continue to see on LinkedIn and guest op-eds, primarily from self-promotional individuals leaning into sensationalism and obsequiousness to the current administration, is that America is only now in the past year taking critical minerals seriously.

Pardon my language, but that’s complete and utter horse****.

In reality, we’ve seen an evolution over the past 15 years from awareness to increasingly assertive actions, with mixed, but still-unsatisfactory results. Yes, each Administration has clear priorities shaping their investments across the space. However, we’ve spent the past half-decade committing real resources, sharpening tools, and learning how to provide meaningful support across the full value chain and at all stages of project development.

While I’ll save the deep-dive for my upcoming post on rare-earths, that value chain best illustrates this evolution. It also benefited from being an early national security fixation, with more early stage development in the Obama and first Trump terms, investor enthusiasm (enabling corporate fundraising), and federal attention to “solving the crisis” than just about any other group of minerals.

There are also no rare-earth magnets in production anywhere in North America without the Biden Administration’s grant funding, IRA tax credits, and electric vehicle (EV) market support. Period.

Companies weren’t going to get project financing off retail investor enthusiasm for rare-earths. We needed steeper incentives to accelerate corporate development, and clear market signals from large industrial end users to enhance bankability…all while continuing to fund the next wave of startups. Tax credits, tariffs, grant funding, and absolutely crucial offtake agreements from General Motors for its then-ambitious electrification goals advanced several key projects.

Whatever you think of the second Trump Administration’s dealmaking on rare-earths, none of it would be possible without foundations laid by his predecessor and in his own first term. I created this table to illustrate most of the investment mechanisms we’ve seen employed since 2016 to foster a domestic rare-earth magnet supply chain, as well as high-performance rare-earth-free alternatives.

This table is by no means exhaustive, as other companies in the rare-earth magnet have received support to date under various Department of Defense (DOD) and DOE grant programs.2 I also don’t capture the magnitude of investments made…certainly the most recent Trump financing deals dwarf all prior funding commitments. But this table does illustrate that we have funded companies at all stages of development and across the value chain.

I should also note President Biden ordered a Section 232 investigation into the neodymium magnet supply chain shortly after taking office in 2021, and levied Section 301 tariffs of 25% on Chinese permanent magnets in 2024, which took effect on January 1, 2026.

Without nearly a decade of prior financing and trade actions, President Trump’s options would have been far more limited after China’s retaliatory response to his April 2025 (“Liberation Day”) tariffs.

In fact, many financing actions we’ll see in this Trump term will be the result of corporate and project development completed during the Biden era and, in some cases, before that. And the same will eventually be true for his successor. This isn’t a scorekeeping exercise—it’ll be quite a few years before you could even give it an honest attempt. But policymaking needs to be dynamic. America’s adversaries aren’t idly watching our moves, which means we need to assess the effectiveness of tools in real time so we can adjust course where necessary.

Simple rules about federal financing

If you’ve been reading my posts or listened to my recent podcast episode, my experience at DOE left me with strong views about how we should approach financing solutions across the sector, without being too prescriptive. This isn’t an exhaustive list, but hits the high notes:

1. Customers should always come first. I think we can and should do a lot more to support the domestic mining sector writ-large, but critical minerals are fundamentally defined by demand from industry. We should lean into that demand where possible, and directly intervene on behalf of upstream producers only insofar we’re solving for risks to their downstream end users.

2. (Nearly) every mineral has different extraction and processing economics, requiring tailored solutions for each. As I discussed in “What exactly are critical minerals,” almost every one of these minerals matters because of some end use in our industrial economy, typically as a refined material. With very few exceptions (e.g., neodymium and praseodymium), these minerals each have a unique set of characteristics that dictates where and how much of them we use.

3. Critical minerals/materials represent industrial chokepoints worth far more in economic value than the actual cost of materials traded. $5 of Material X may enable production of a $1000 product, and Material X may not be easily substitutable. If the market can’t ensure secure supplies of Material X, even at elevated prices in a supply crunch, then federal subsidies may be worthwhile to address the market failure.

4. The traditional federal grant-making process has clear advantages in seeding early-stage companies, but struggles to adequately evaluate commercial projects. The mining sector is full of half-baked projects attempting to capitalize on national security imperatives, and competitive grant solicitations rarely collect the extent of information needed to properly diligence them. If a venture capital shop sinks money into a glorified PowerPoint, it makes a bad investment. If a discretionary federal grant program selects a non-viable project, it not only draws political scrutiny, but also starves alternatives of capital and investor attention.

5. Losing money via subsidies or failed projects isn’t necessarily “waste,” but we should exercise caution about actions that crowd out private investment in alternatives. I will have plenty more to say about this in the next couple of weeks, but most of the critical minerals we’ve designated face severely broken or entirely non-viable markets, and effective solutions will demand producer subsidies and/or a stronger federal risk appetite for losses to crowd in private capital.

6. Tax credits need to be the foundation of any successful critical minerals policy; unilateral tariffs3 should be used thoughtfully and probably sparingly. Again, more to come in the next couple of weeks, but passive tax credits and tariffs (or other trade barriers) are the two tools that don’t involve directing support to a specific competitor. Tariffs can produce nasty dislocation effects across the supply chain, are seen by capital providers as impermanent (and therefore less predictable), and hit downstream customers in ways that can destroy demand. Tax credits obviously involve outlays from the US Treasury, but generally offer predictable support, can meaningfully change the risk-adjusted return profile for a project to entice equity investors, and don’t penalize customers.

The federal debt matters, but we’re still the richest country on earth and solving for most minerals on the list constitutes a pittance in the grand scheme of our industrial economy. Unleashing a money cannon on the sector won’t help if done recklessly, but there’s no reason to be stingy given the potential risks of supply chain vulnerabilities.

Building the pipeline

Because individual critical minerals vary greatly in extraction and processing economics, geography, and market value, we’re starting from different places on each of them. In some cases, our current positions of relative strength warrant asking whether we should consider certain minerals critical at all.

But for base and precious metals, or common co-products of their ores, we may already have operating or advanced mine projects backed by mining majors or other well-capitalized sponsors. I have many questions about Korea Zinc’s plans for Nyrstar’s Tennessee zinc smelter and a new multi-metal processing hub, but the Trump Administration’s deal there will benefit from existing operations. As such, we’re also in a better position to recover germanium and gallium from those zinc ores than from a greenfield exploration project responding to recent policy signals.

In Idaho, the revival of Sunshine Silver’s shuttered mine and Perpetua Resources’ nearby Stibnite Gold Project have both been long in development4 on the basis of their precious metals’ value. Silver’s inclusion on the Critical Minerals List notwithstanding, both projects offer potential for antimony co-production. Like several of the rare-earth projects, Perpetua received a sizable DPA Title III grant from the Biden Administration, and has been working with the US Export-Import Bank on project financing.

And then there are our legacy assets. Even after several decades of American de-industrialization and post-Cold War de-prioritization of minerals production, some older mines and processing plants remain active. These facilities tend to trade hands frequently, with owners taking a disciplined approach to capital investment, focused on maximum value extraction over growth. Sometimes these operations are buoyed by defense contracts, but often the market risk is simply too great and potential returns too small to justify meaningful investment.

Examples include Talon Metals recently-acquired but dwindling Eagle Mine (nickel-copper), US Antimony’s lone processing plant, and Atalco’s Grammercy, Louisiana alumina refinery. The latter is our only remaining alumina producer, and recently received a DOD financing package for sorely needed upgrades and potential buildout of a gallium extraction circuit. I’ll be writing more about this one both when I cover equity stakes and then aluminum.

To be clear, these assets offer different positions in terms of viability and readiness for commercial project financing support from the federal government. The magnitude of impact from key investments will also vary, but they all represent pieces on the board we can work with. Several managed to meaningfully advance their projects during Biden’s term due to grant support or tax credits. Others sought steeper support than his administration could offer, and only with President Trump’s more aggressive dealmaking approach are they now able to secure transformative financing.

Leaning into market growth

Finally, there are those minerals for which market signals initially stimulated investment and development activity apart from policy levers. I already discussed this dynamic with rare-earths.

The market opportunity created by rapid growth in EV and renewable energy deployment fostered a similar dynamic with a number of those technologies’ constituent minerals. This effect was most pronounced with lithium due in part to the presence of massive resources across the US, but the EV boom also incentivized development in graphite, nickel, cobalt, manganese, and battery recycling to recover those very minerals.

While President Biden made building these supply chains a cornerstone of his industrial policy, and unloaded a large arsenal of grants, tax credits, and concessional debt financing tools to support them, the start of that commodity cycle pre-dated his administration. He simply leaned into it at its peak.

The Bipartisan Infrastructure Law’s (BIL) DOE battery grants made $6 billion available to projects building commercial facilities across the value chain. LPO ended up closing loans or making conditional commitments to three vertically-integrated lithium miners, two graphite producers, and two battery recyclers. Projects backed by these grant and loan programs had been able to reap significant venture and public markets fundraising off the “clean tech” boom (and bubble). The 45X critical minerals production tax credit and 48C investment tax credit, while mutually exclusive for any one project, offered multiple pathways to enhancing project financing.

And last but certainly not least, the 30D EV consumer tax credit carried sourcing incentives for critical minerals that gave domestic mining and refining projects leverage in offtake agreements with automakers and cell manufacturers. While the 45W commercial vehicle tax credit (and its leasing loophole) had no content requirements for critical minerals, the boost it gave to EV sales and their demand forecasts similarly supported prospective mineral suppliers in their fundraising and offtake negotiations.

The results of this approach have been mixed due to a combination of factors including, but not limited to: ineffective program design, conflicting Biden Administration priorities (i.e., producers vs. consumers), quality of project developers, poorly-oriented capital markets, decline in mineral prices from 2023-2024, the Trump Administration’s all-out sabotage of the EV sector, its general ambivalence toward the battery supply chain,5 and DOGE.

You can more or less choose your own adventure from the list above, but I plan to spent most of next week’s post elaborating on these factors. Many projects still hang in the balance, with meaningful grant or debt financing commitments from DOE and ostensible alignment with Trump Administration sector objectives. So while it’s too early to cast project-specific judgments, and I’m still limited in what I can share, I can discuss the mechanics employed by the Biden Administration with straw man examples that illustrate strengths and weaknesses.

Final thoughts

The Biden Administration instituted our first concrete policies aimed at advancing commercial development for all designated critical minerals, though largely focused on so-called energy transition minerals. Critics often attribute that focus to myopic climate objectives, but the reality is more rational. These minerals, more or less represented by DOE’s 2023 Critical Materials List, had already drawn more investment capital, leaned into markets for rapidly growing consumer products, and featured a landscape of companies that appeared more ready to ingest federal financing for commercial projects.

It also simply wasn’t feasible to attempt solving for the entire critical minerals and materials lists simultaneously with equal degrees of effort. Especially with many of these minerals effectively requiring a cold start. However, the Biden Administration established several of the policy tools we’ve now seen the Trump Administration leverage to great effect, and also left it a stronger pipeline of projects in 2025 than existed in 2021.

I struggle to see how a hypothetical Harris Administration would have pursued financing solutions for antimony, gallium, germanium as aggressively as we’ve seen from the Trump team—and for better or worse, rare-earth magnets.

Next week I’ll cover the Biden financing approach, with a focus on its grants, loans, and tax credits in capital formation. See you then.

I said this week’s post would be much shorter on account of travel. I lied. Sorry. Let’s get to it.

Even if you’re entirely new to critical minerals, you’ve certainly seen the problem in your own line of work.

Some call it the “better mousetrap” problem, I prefer “shiny object syndrome.” But there are no shortage of engineers, financiers, policymakers, and enthusiasts who see a competitiveness deficit, and latch onto alternative speculative technologies as the sole or optimal solution. This group of people never seems interested in iterative process innovation, finding ways to improve performance, reliability, and cost competitiveness of existing products.

No material in the mineral insecurity realm illustrates this challenge better than graphite—both natural and synthetic. The material is virtually irreplaceable in lithium-ion batteries (for now), completely dominated by Chinese producers, and uneconomical for US production without incentives and/or protectionist trade barriers.

As a result, many…and yes, I’ve encountered this A TON…people in and around the battery sector have concluded that graphite is a lost cause, and America should look to the next, more advanced materials as substitutes. That means silicon anodes or, beyond that, lithium metal anodes in solid state batteries. I’m optimistic about both technologies over a longer time horizon, but would aggressively reject the assumption we can just give up on high-quality domestic graphite production. More on that momentarily.

Similarly, we see many too-good-to-be-true solutions hawked for extracting or processing minerals more efficiently or unlocking entirely new classes of resources. I’m not in a position to throw stones at someone’s lab-stage intellectual property, but also recognize the overwhelming majority of these technologies, however promising, are still many years from commercial readiness—if they reach it at all.

Technological innovations are inevitably part of the solution, but we should also be cognizant that addressing risks in the short-to-medium term will also involve brute forcing our way through problems via subsidies for less-economic production, or other market interventions that buy us time for longer-term alternatives.

The breakthroughs we seek

Technology innovations can help us tackle minerals security challenges in three areas:

1. Exploration and extraction

2. Processing

3. Product substitution

The first two are pretty straightforward. Someone develops technology that helps us identify and scope mine assets far better than we’ve been able to, cutting the cost and time needed to complete exploration and feasibility work. Or technology that helps us extract a purer and more economical product directly from the resource. Or technology that sits in the midstream refinery, and meaningfully reduces the cost of separating minerals from ore concentrate, brine, or other unrefined material.

The graphite problem I laid out is a good example of product substitution, whereby a breakthrough in silicon anode production may allow cost-effective replacement of some graphite in battery anodes. Many cellmakers already mix in small quantities of silicon, mostly to enhance charging performance, and technology breakthroughs are more likely to increase their proportion of anode content versus displace graphite entirely. The extent of replacement will likely depend on performance requirements in different market segments.

I’d also differentiate between product substitution enabled only by real technology breakthroughs (no matter how transformative), and more readily attainable outcomes by trading cost or marginal performance differential for supply chain security. In some cases, it’s as simple as just being able to identify the material vulnerability in your supply chain, and then engineering it out.

Another oft-cited substitution opportunity is rare-earth free high performance magnets, such as the iron nitride products Niron Magnetics seeks to commercialize. Lower cost magnets that can match performance of even just the lower-end rare-earth-based chemistries would minimize some supply chain vulnerabilities. I’ll explain in greater detail why these particular technologies are unlikely to completely displace demand of status quo materials in my future posts on graphite and rare-earths.

In reality, there are very few “blue ocean”1 technology opportunities in mining and materials processing, owing to the diversity of mineral resources, market dynamics, and maturity/optimization we already see across different value chains.

This is an important distinction…because it limits where and how venture capital may be willing to engage in the sector, and that means we’ll need to mobilize more conventional corporate R&D to solve many of our problems. Or at least enlist/entice established industrial players into technology development as strategic partners. And those different pathways require different federal support mechanisms to foster innovation where beneficial.

I’d also argue that we need to step back and look at the broader set of critical minerals through a framework of where innovations can enhance US competitiveness or help us circumvent chokepoints, and those where we’ll simply need to find ways to reduce consumption or accept other market interventions to mitigate security risks.

Bringing venture into mining

If you read my “How to build a mine” posts (or at least Part 2), then you might recall a schematic I shared comparing mine development to venture investing stages. If not, here it is again:

As I said then, it’s not a perfect comparison, especially because junior miners typically go public at very early stages, long before they have revenue. But venture capital does layer into the ecosystem as well, increasingly showing up as the primary financing pathway for most of these technology-driven solutions.

As with venture funding in other sectors, these solutions need to promise high degrees of scalability across multiple resources. This is why we tend to see them in the midstream processing stages, and also, if not targeting a large volume mineral (like copper or lithium), we tend to see them roadmap an ability to process many different critical minerals. See ReElement, or newer startups Valor and Mariana Minerals. As with exploration-oriented startup Kobold Metals, these newer entrants increasingly rely on promises of machine vision, robotics, and artificial intelligence to enable what the miners and metallurgists haven’t been able to achieve, and with unlimited customization.

I’ve seen other technology startups with more specific mineral focus, covering graphite, magnesium, gallium, and others, but some of the highest profile venture financing activity we’ve seen over the past 5-6 years concentrated around recycling and lithium. Why? Market size and domestic market opportunity.

Big promises, bespoke progress

Nonetheless, every one of these companies faces challenges around slotting into the value chain, with diverse geologies or mineral feedstocks that limit practical scalability of their products.

Developers of direct lithium extraction (DLE) technologies - which I plan to cover in my upcoming post on lithium - like to talk about the scalability of their solutions across many resources. But they ultimately require extensive technology refinement from one lithium mine to the next, and each technology certainly needs a strong anchor project just to prove viability at commercial scale.

My time at the Department of Energy (DOE) left me hopeful that DLE will ultimately help us tap America’s landscape of unconventional lithium resources, but these technologies aren’t well-suited to the venture funding model and its scalability expectations. I’m not saying the venture-backed startups will fail and their mature industrial competitors will succeed, but DLE looks more like a bespoke industrial product for each lithium resource than a plug-and-play catalyst of rapid growth. Without larger structural market changes, DLE is unlikely to unleash a fracking-style burst of new supply brought to market in rapid succession.

While not attracting the same degree of venture interest, copper’s market size and *extremely* challenging project development in the US (for both mines and smelters) created an opportunity for what may be that market’s DLE equivalent. And interestingly…incubated by one of the mining majors, not external venture capital. In December, Rio Tinto’s Nuton subsidiary began producing its first bio-leached copper in situ (i.e., processed in the ground), which could transform copper economics and increase domestic production of cathode without requiring new smelter capacity.

It’s not yet clear how the technology performs across different ores and mine designs, but for now at least, the technology appears supplemental where copper would otherwise be uneconomical to extract. That means the big money will continue to focus on conventional mine development domestically, where we lack additional smelter capacity to process copper concentrates. And I’ve yet to see anyone come forward with a technology solution to atrocious project economics for a greenfield US copper smelter.

Finally, recyclers of batteries and e-waste often promise feedstock-agnostic solutions, but recycling economics say otherwise. These operations typically require large volumes of material containing high-value metals, and as with other recycling, over-engineer their lines around the expected presence of contaminating materials. These companies were able to raise large sums of venture funding in the early 2020s during the clean tech boom, promising rapid scalability alongside hockey-stick growth forecasts for recyclable feedstocks and surging metals prices.

While not rocket science, these companies all claim to leverage technology innovations allowing them to more efficiently process various battery feedstocks. In reality, hydrometallurgical processing (i.e., acid washing) has limitations. Battery market shifts, including slower demand growth and changing chemistry preferences2 have taken their toll on the sector outlook, forcing business model adjustments and calls for federal support to buffer operations until electric vehicles are retiring enough batteries to help domestic recyclers achieve economies of scale.

The common thread tying these examples together is the need for other market reforms, interventions, or natural evolutions to complement technology innovations for both mining and mineral processing. None are likely to achieve big “breakout moments” that create radically improved project economics overnight.

Fostering innovation

Federal support for critical minerals requires end-to-end support for both technology and resource-specific project development, which intersect but don’t necessarily advance in conjunction. DOE funding activities skew toward technology, especially at earlier stages of development, but ultimately require physical resources as testbeds for those technologies. And mining is a conservative industry where established players are structurally biased toward established practices with little incentive to risk innovations.

Earlier in 2025, I was helping some of my colleagues in a couple other DOE offices map out where they sit in the mining commercialization pathway, an exercise to help their new political leadership with strategic planning. I’ve provided a crude re-creation of what we conjured. Note that this isn’t a full representation of all DOE program offices with critical minerals funding opportunities, just its primary ones.

This schematic represents DOE prior to its November 2025 reorganization, which put what had been the Manufacturing and Energy Supply Chain Office (MESC) and most remnants of the heavily DOGE’d Energy Efficiency and Renewable Energy Office (EERE)3 all under a new roof. The new Office of Critical Minerals and Energy Innovation (CMEI) will now own responsibility for most grant funding and sector strategy outside the earliest stage breakthrough innovation, housed in ARPA-E, some specific mine resource programs4, and the Energy Dominance Financing Office (EDF) (née Loan Programs Office (LPO)).

The drive to orient DOE around commercialization, and not just R&D, was very much the product of the Biden Administration’s industrial policy vision. Agency leadership, supported by new programming funded under the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA), tried to structure a continuum of program funding covering the entire technology development lifecycle in many technology areas.

In theory, there was a program office for every Technology Readiness Level (TRL), from 1 to 9, though gaps emerged for mining and processing. I described the most glaring of these in last week’s post, where we lacked grant funding structured to support the pilot or demonstration plants needed to de-risk commercial scale-up.

But there were others.

Where DOE couldn’t bridge the gap

For critical minerals-oriented programming, we lacked adequate funding tools to advance the mine projects themselves, instead focusing primarily on the technology for processing. Which…makes sense. Ultimately, DOE is a technology agency, and had awkwardly assumed the primary role of supporting domestic mine projects during the Biden Administration. All while lacking the funding tools or flexibility to do so.

LPO sat at the end of that funnel, with every other office’s grant funding serving to derisk technologies and projects before they could ultimately seek debt financing for commercial scale-up. Most manufacturing or supply chain projects at LPO involved some innovative technology, even though we generally didn’t take technology risk. Our charge was to finance TRL 8 or 9 projects (in rare instances, TRL 7) that featured degrees of market or other commercial risk.

We collaborated with colleagues in other offices to infuse more commercial orientation into their grant programs for earlier stage projects, but the tools available to them were generally inadequate in scale and flexibility. Mostly because these programs mirrored R&D funding in other sectors, with more generically scalable and less bespoke market applications. In other words, these worked fine for companies seeking seed or other early stage venture funding in relevant technology areas (like recycling), but less so for resource-specific technology development.

The Fossil Energy and Carbon Management Office (FECM) had some smaller funding programs (i.e., $2-3 million awards) that could partially fund feasibility studies on mines, but they were structured as any other multiyear R&D grant with technical milestones. These were awkward fits, often tied to specific technology areas of DOE’s choosing*, too infrequent for mining companies to plan around, and simply didn’t align to industry project development timelines.

*Sometimes these directions come directly from Congress in authorizing/appropriating statute, another problem I’ll discuss in a subsequent post.

As such, most of the funding ended up supporting science projects with mine tailings and other waste streams, or highly speculative “host” developers willing to partner with researchers on snag small grants for resources with poor commercial prospects. And no buy-in from major industry stakeholders. I see merit in funding standalone technology development, but we also need funding that allows more formidable mine developers to advance innovative technologies alongside their commercial project. And ensure those projects can demonstrate market relevance.

My colleagues at FECM (now under HGEO) spent the past several years developing their recently-launched “Mine of the Future” initiative that potentially addresses some of these disconnects. The program is still technology-focused, but offers larger grant awards to entice commercially-focused projects as prospective applicants. If successful, we’ll see projects that enable technology and mine development symbiotically. Funding levels are woefully inadequate at launch, but could nonetheless serve as a foundation for program scale-up with subsequent appropriations.

Drawing back on my prior comparison of private funders, programs like these lend themselves more to corporate R&D, bolting promising technologies onto existing project development to solve specific problems—not the venture-style “blue ocean” mindset. Given project development timelines, financier risk appetite, and mine lives once in operation, we simply don’t have many opportunities to embed major innovations in projects. Mine plans tend to stick for life.

I’m hopeful that the reorganized DOE is better suited to support mining projects from inception through construction, with innovation improving American competitiveness against global alternatives. However, the Trump Administration has thus far shown little interest in incubating earlier stage projects given its orientation toward dealmaking and quick wins, and I could also see much of this necessary programming languish until a subsequent administration picks it up.

Final thoughts

I didn’t address electrification and surface automation technologies (e.g. automated trucks) here because I see these as helpful on the margins, but likely not the sort of breakthroughs that unlock new resources. Other technology oriented toward industrial efficiency may also help processing plant operations, but have much broader commercial applications and are too broad to discuss in this series.

I also didn’t include it in my schematic, but the Department of Defense’s (DOD) Industrial Base programs, including Defense Production Act (DPA) Title III, had greater flexibility and ultimately impact to project development over the past few years. I would often refer projects seeking feasibility study support to DOS programs, since DOE lacked the tools to effectively serve those projects. I don’t think DPA should be the longer-term tool for commercial projects not specifically tied to the defense industrial base, but until policymakers streamline funding programs, developers will (and should) continue to lean on it.

I’m not an expert on innovation policy, and won’t pretend to be. Someone else needs to conjure the grand vision for reorganizing the way we incubate promising technologies and increase their likelihood of commercialization. But we do need to better tie federal R&D programming to commercial objectives, even while reserving a place for “science for science’s sake.” I found many of the grant programs in DOE’s R&D-oriented offices too detached from commercial objectives, feeding niche research favoring certain political constituencies (e.g., fossil fuel producing regions) or what amounted to make-work for the national labs.

Next week I’ll dive back into financing topics, starting with the corporate/project capital stack and government tools to support capital formation. See you then.

I’ll also quickly plug my appearance on Heatmap News’ Shift Key podcast last week. Punchy headline notwithstanding, it was a robust discussion covering a variety of critical minerals topics, with some of my takes on policy tools in the news.

Congratulations! You’ve raised enough money to complete a Preliminary Economic Assessment (PEA) and demonstrated a promising mine asset, such that you’ve raised enough money for your Pre-Feasibility Study (PFS). Maybe you’ve even pulled in a strategic investor. If not, you’re active on the conference circuit meeting with every mining major, private equity shop, family office, prospective offtaker, buy side analyst, and other institutional investor who’ll give you fifteen minutes.

You’re actively working on permitting, telling investors you plan to move right into your Bankable Feasibility Study (BFS)1 after completing the PFS, and can be in construction within two years if fully funded. You have an investor deck you refresh for every conference…with project status updates, the most favorable independent market forecast you can get your hands on, and fresh return on investment (ROI) calculations. Of course, your resource is “world-class,” and you’re expecting the next round of geology and/or engineering work to demonstrate even better economics than what you’ve got there in your glossy handout.

As I indicated in my previous post, this is just the nature of the game. You can’t afford to not paint an exaggerated picture of your project’s projects. Everyone else is doing it, and you’re fighting for a limited pool of risk capital.

The truth is your project likely isn’t “world-class,” but it still might be investable under the right market conditions. You financial projections, typically reflected as net present value (NPV), internal rate of return (IRR), and payback period from the start of production, are wildly overoptimistic—even your “downside” case.2 And there’s no way you’re getting into construction within two years because, even if there are no permitting or other legal hiccups, you have more engineering work ahead and will need to firm up any commercial agreements before you can actually raise the financing needed to reach a final investment decision (FID).

You want to project a quick return on investment—most investors don’t want to think more than five years out. But project development and fundraising remain an uphill climb from here.

Raising the big bucks

Last week I shared a process flow that sketched out the project development pathway. I’ve gone ahead and modified it now to reflect roughly how various capital raises for minerals projects might translate in the world of venture capital.

Now you might be thinking, “Wait, but all those venture rounds occur pre-IPO, and Nathaniel already explained last week that mine developers frequently take their companies public long before they build anything. How are these remotely comparable?” Yes, it’s an imperfect comparison, but one I think illustrative for those readers who may be more familiar with entrepreneurship and venture funding outside the mining sector.

Fundraising for early exploration often resembles “family and friends” financing, with subsequent progression largely depending on the size of the project and cost of feasibility work. A small project with expected capital costs in the high tens or low hundreds of millions might be able to clear its feasibility work with $10-25 million all-in, especially if the plan involves selling less-refined product into the market. But a large mine and refinery might easily require well north of $50 million just for the feasibility and preliminary engineering work. That doesn’t include any other planning and permitting, corporate development, and subsequent project development costs.3

Putting aside even the extreme cases like Resolution Copper ($2 billion and counting), larger projects might need to raise several hundred million dollars just to reach construction, not including financing for the project itself. As with venture capital in other sectors, successive corporate fundraising rounds focus primarily on product and commercial development. Project financing only enters the picture later, as the developer prepares its first capital investment expected to generate positive returns.

Until then, uncertain cash flows with little collateral means developers can’t secure meaningful debt financing. Developers might claim high NPV figures for the mine, but until there’s a functional buildout, it’s worth effectively nothing to a lender. At best, companies can secure a small credit line, which they will attempt to pay back with other fundraising.

They also generally won’t want to fund detailed engineering work until they have a credit facility secured, creating something of a chicken-and-egg problem for scoping their fundraising needs. Often this logjam only breaks in bull markets, making counter-cyclical investment extraordinarily challenging.

Building a refinery

Thus far I’ve focused on mine development, but will now hit pause on the project development walkthrough to discuss mineral refineries, a.k.a. processing plants. You’ll notice I use those terms interchangeably.

Unlike a mine, which requires extensive resource definition, processing plants follow roughly the same development pathway as any other industrial facility. There’s no need for additional exploration and geological work, other than the typical site selection and planning around environmental and logistics concerns. So these projects usually start with a feasibility study, and have a much faster timeline to delivery (assuming they can raise capital).

I’ll also distinguish between upstream processing, such as crushing, grinding, and relatively rudimentary chemical processing to develop ore concentrates…versus downstream processing. Almost every mine has some immediate processing step onsite for ease of transport and sale, but downstream refining depends heavily on the resource and market. It more resembles specialty chemical production.

There are in effect five types of minerals project:

1. Standalone mine, no plans for a processing plant

2. Mine with third-party sales until construction of processing plant

3. Standalone processing plant fed by existing mines in operation*

4. Processing plant fed by third-party feedstock until mine construction

5. Vertically integrated mine and processing plant upon start of operations

*You could also consider a recycling plant fed by manufacturing scrap and end-of-life material as a variant of a standalone processing plant.

From my experience, most critical mineral projects in the US opt for door #5, though I’ve seen examples of each.

Typically only the highest grade mines will produce unrefined minerals, as they can reap the upside from low operating costs and sell into global commodity markets from a competitive position. We really don’t see any of these mines in development for critical minerals in the US, other than perhaps copper and precious metals.

Everyone else wants to build a processing plant. Whether they’re tied to their own resource or plan to exist solely in the midstream. Because that ultimately allows them to hedge against potentially volatile commodity pricing, strike direct offtake with industrial customers, and/or sell investors on technology differentiation to produce favorable economics.

If you’re going head-to-head with Chinese or other low-cost producers, you need a plausible competitiveness narrative for investors. Innovation offers one, though it may require actual technology development and/or licensing, depending on the material and application.

Tax credits and their sourcing requirements, low-cost government debt financing, grant funding opportunities, and tariffs may also increase the value of pursuing vertical integration with a US refinery, whether or not the mine is stateside.

After LPO financed Syrah Technologies to build a graphite processing plant in Louisiana, fed by its mine in Mozambique, foreign junior miners (primarily Australian) flocked to our office seeking to build US refineries downstream of their mines in Africa, South America, or Australia. These were mostly for battery metals that could help automakers qualify for the 30D electric vehicle tax credit (or pursue DOE grant funding), but I saw a handful of other examples, including rare-earths.

Seeking credit

Because constructed-and-equipped facilities offer real collateral, project debt is finally attainable as those facilities approach reality. And since debt is typically the cheapest form of capital available,4 you’re almost certainly going to pursue as much of it as a lender will extend. (Private equity owners and mining majors may pursue a more balanced project financing strategy.)

But financiers are looking for several key measures of project readiness and viability that go well beyond a feasibility study. I mentioned last week that LPO would expect a project sponsor have at least a BFS in hand before seriously engaging with us. But over time, and with more experience engaging junior miners (and other manufacturing startups), we established more robust readiness goalposts and eventually published them in updated program guidance.

In addition to a BFS, we wanted to see:

1. A front-end engineering design (FEED) study,

2. A large pilot- or demonstration-scale facility in operation to validate an applicant’s flowsheet (if they were seeking financing for a processing plant), and

3. Offtake contracts with credible counterparties to demonstrate commercial traction.

These weren’t hard and fast rules, but at least filtered out many premature applications. Sometimes we could start an application review early if elements were demonstrably in progress, and set completion conditions for entry into due diligence.

For those unfamiliar with industrial projects, a FEED study is the first serious engineering design completed and should include a facility’s full (not necessarily final) bill of materials (BOM). I won’t explain the full project design process,5 but at this diligence stage we’re looking for what would be considered a Class 4 engineering estimate. That still leaves project costs at a rough estimate, with up to +50% variance. We’ll want a project to complete detailed engineering and achieve a Class 3 estimate before closing a loan, for reasons I’ll explain momentarily.

Definitions of “pilot” or “demonstration” plants can vary, but we’d be looking for continuous operations from a plant that was no more than one order of magnitude from what sponsors were asking us to finance. In other words, if you wanted us to finance a 20,000 metric ton per annum (tpa) production facility, we wanted to see your company operate a facility producing at least 1,000 tpa for six consecutive months. This would ensure developers demonstrated consistent production operating comparable equipment to what they’d install in their commercial facility.

Finally, while commercial offtake agreements are an important signifier of market acceptance and plug into modeled project economics, they also serve as technical validation. Financiers will hire independent engineers to evaluate project design documents and pilot data, but ultimately have no way of assessing whether the output is suitable for customer use. Progress on a contract’s technical milestones is the best indicator of viability, even if final product qualification won’t occur until the commercial facility is operational. While we could accept letters of intent (LOI) and memoranda of understanding (MOU) to start, we would want to see these preliminary agreements evolve into binding commitments with bankable commercial terms.

Most of these requirements are no different than those of private financiers, but there was definitely an industry expectation that federal agencies should exhibit more leniency toward projects. That expectation grew as market prices for critical minerals collapsed in 2023-2025, capital markets soured on projects, and policy consensus shifted toward greater federal intervention.

Fighting for exceptions

Because project sponsors wanted to tell prospective investors they were making tangible progress on government financing, we saw persistent attempts by applicants and their advisors to submit premature applications and then…let’s call it “brute forcing”…their way through to subsequent milestones. It was not a successful strategy.

Project sponsors would conjure reasons their project merited exceptions, and why they were ready to submit an application despite not meeting our stated requirements. Their Washington, DC advisors, more often than not, amplified the refrain. Here are just a few of the examples I commonly heard:

• “Our PFS is really more like what you’d see with a BFS.”

• “Our flowsheet uses off-the-shelf technologies and there’s nothing complicated about it.” (After telling me they had multiple patents and their tech was “secret sauce”)

• “We had a world-class engineering firm validate our flowsheet during our pilot.”

• “Our team has [x years] of combined experience and has executed projects like this before, so we don’t need a larger pilot.”

Some would tell me they didn’t want to invest more into project development until they had an application progressing through our pipeline. Everything boiled down to how much money they’d need to raise to scope and de-risk their project before they could convince debt and equity financiers to pull the trigger. Obviously they wanted to minimize that obligation and take any shortcuts they could.

The most contentious issue was adequacy of pilot operations for their processing plant. Unlike the FEED or offtake agreements, which are part of a standard commercial roadmap, these project developers don’t want to raise or expend the money necessary to build a proper pilot (really, demonstration) facility.6

They have valid reasons for that reticence, and it exposes one of the most fundamental challenges in critical minerals financing.

Holding the (pilot) line

Most project sponsors will top out their “pilot” work at a run rate 1/100th of their planned commercial facility. You want a couple thousand tpa, they’ll demonstrate a fraction of that.

Oftentimes, they’re not even building a single line for continuous production, but rather a mockup to demonstrate they can produce batch samples with their flowsheet. This can involve sending material between multiple test facilities with the appropriate equipment in aggregate. Those samples may be enough to partially qualify product with an offtaker—it demonstrates your material is capable of meeting their specification with the right treatment.

However, you still haven’t demonstrated you can consistently produce material that meets commercial specifications with a high degree of quality assurance. Equipment on each line needs to be sized for the same output you’d expect in commercial production, and organized for automated processing capable of meeting expected throughput. Timing breaks down, valves don’t regulate material flow properly, bespoke machinery produces uneven results. A lot of stuff can go wrong.

In practice, greenlighting construction without adequately de-risking the production flowsheet can expose the project to massive cost overruns on the backend. That means you either need to force borrowers to carry oversized equity reserves as contingency, or risk the project going bust before it can ramp up production. The former can prove fatal to fundraising efforts in all but the frothiest market conditions.

Worse, developers cannot get financing to built a demonstration plant, and industrial offtakers aren’t interested in committing to the lower volumes those facilities would produce. Hence the lack of interest to build them, and the pushback against financiers asking for them. So producers will overcommit to their customers, inking larger volume offtake agreements and then attempting to skip critical validation steps so they can meet commercial obligations on overly ambitious timeframes.

And that, maybe more than anything beyond market factors themselves, is why financing these facilities is so damn difficult.

I would argue lack of dedicated funding for demonstration scale facilities was the biggest oversight of Biden-era funding programs, and I saw little movement under the Trump Administration to remedy that gap. If anything, the bias toward quick solutions via grand dealmaking is exposing projects to even greater scoping and execution risks, with more cost overrun and bankruptcy potential.

More on that in a future post.

On the goal line

Commercial financing obviously progresses much faster than government alternatives under normal circumstances, though the Trump Administration has tried to bring timelines down closer to what you’d expect in the private sector. LPO’s application review and diligence could take a year or longer, depending on the readiness and strength of a project. We spent 2024 working to streamline and shorten the end-to-end process, continuing that through 2025, but practical limitations remain for the highest-risk projects (including critical minerals).

Balancing the desire to move quickly with both risk mitigation and genuine concern for project success is no simple task. It’s much easier to offer deal terms quickly when your financing rates or collateral demands are punishingly high.

Despite our stated requirements, projects still tended to start our application intake process with gaps that slowed reviews. Key project details would change, and market swings forced sponsors to shift their commercial roadmaps. Investor decks spell out optimistic timelines - especially for offtake and fundraising - that projects will never meet. Financing in this sector requires learning to live with broken promises and less-than-ideal risk profiles.

We could reach a conditional commitment with a Class 4 cost estimate, but needed greater fidelity to properly size the debt and collateral package, especially various reserve accounts for contingency. Therefore, borrowers needed to complete detailed engineering and achieve a Class 3 estimate, cutting their potential variance in half.

These requirements also allow our borrowers to properly size their equity raise requirements. Not just base equity to match debt for capital expenditures, but also working capital and other reserve accounts to guard against cost overruns. Projects ultimately should have all of these accounts filled before reaching FID and beginning construction.

They would reach a Class 2 estimate early in construction, with most major equipment ordered and EPC (engineering, procurement, and construction) firms locked into contracts. From there, it’s just a matter of execution.

And the hope that new tariffs don’t jack up your material costs overnight.

Final Thoughts

I recognize readers of Tailings come from different professional backgrounds, and am trying not to assume too much technical, finance, or policy knowledge. So my apologies if some subject matter feels elementary. Ultimately, I believe solving America’s minerals security challenges requires policymaking informed by at least a basic understanding of these principles. And I frequently found in my briefings of policymakers that they still had a ways to go.

I’m stepping back from project development and financing next week to cover technology, which I’ve held off discussing to this point. It should also be quite a bit shorter than my other posts. After that, I’ll dive into federal policy and financing tools.

Until next time.

Correction: In the initial post, I mistakenly stated this was the fifth Tailings post. It’s the sixth.

When I decided to take geology freshman year of college, I went in truly believing the geology profession was akin to paleontology for rocks. Try to understand the earth’s past, monitor volcanoes and earthquakes, maybe help astronomers explore the cosmos, and mostly exist to spit out cool science facts for documentaries and such.

Then one day my geology professor brought in her geologist husband as a guest speaker. He worked for Exxon, and it hit me immediately, “Oh, okay. These guys can make bank.” That also helped me understand why the class was not, in fact, “Rocks for Jocks.” I got a B-, thanked my lucky stars Vanderbilt only required one lab science, and never looked back.

Until February 2023, when all of a sudden I found myself talking to a lot of geologists. Both inside government and from the mining industry. Unfortunately they’re also something of a dying breed, thanks to our decades-long neglect of the industrial economy and supporting educational pipeline. But they’re the foundation of our global mining sector, and will remain central figures in our attempts to find and secure critical mineral resources.

I’ve found building mines to be a lot like building urban infrastructure. No two projects are exactly alike, you don’t truly know what’s underground until you start digging, you inevitably have to make some site modifications to avoid upsetting locals, and you spend a hellish amount of time fundraising for planning/engineering studies.

I’m going to do my best to summarize the project development process here. If you’re looking for more depth, I can recommend picking up a copy of Mining Economics Explained (also available on e-reader), which offers a solid explainer of the work done at each stage of project development, how projects are scoped, increasing definition and fidelity of estimates, etc.

The long and winding road to production

In my permitting post two weeks ago, I recited the statistic that the average development timeline for a new mine in America is now 29 years. I finally dug up the S&P Global study producing that number, and as I expected, it’s based on a fairly small sample size. I have plenty more questions, but will move on for now.

Nevertheless, developing a new mine is often a generational effort. And as I’ll cover throughout this post, the policy tools we currently maintain to support projects at those progressive stages vary wildly in effectiveness…and availability. Since we’ve already established critical minerals almost by definition require policy support to extract and refine, we need a stable continuum of incentives and direct support mechanisms spanning the full project development timeline.

I’ll come back to this momentarily.

Love ‘em or hate ‘em, the industry’s junior miners lead a lion’s share of exploration and early stage project development work in the sector. Not too dissimilar from most other sectors, the guys with big balance sheets and profit margins to defend let their hungrier, smaller brethren toil on the frontier of discovery.

And when the typical project development timeline looks something like this high-level process flow I sketched, why wouldn’t you let someone else do the hardest work with the most uncertain timeline?

I’ve heard more than one person in the industry sardonically characterize many junior miners as “three guys and a truck.” For much of a mine’s development, that’s not far from the truth.

It can definitely feel cowboy-ish, with lean teams often operating on a shoestring budget for years. Many of these guys (and yes, they’re overwhelmingly men) are geologists, or have one in tow to help them scour the land for untapped opportunities.1 They’re all veterans of the majors, and the teams they pull together generally are highly-credentialed on paper. But in the end, project fundamentals matter, and that all starts with exploration.

Finding critical minerals

It’s not exactly aimlessly walking through a desert with a metal detector; we’ve spent decades surveying geologic resources and logging resource compositions—especially in highly developed industrial economies. In the US, we have a wealth of federal and state records to get folks started. Older mines, even those long abandoned, offer clues or investment opportunities as increased market prices both improve the economics of long-neglected minerals and offer an urgency narrative to draw investor interest. Technology improvements can also catalyze interest in what had previously been unfeasible resources.

Several years ago during the lithium boom, prospectors rushed into the region around Tonopah, NV because Albemarle’s Silver Peak mine had been in operation there for decades. Where there’s a brine, one can reasonably assume there must be lithium in the surrounding (clay) deposits. Most of the region is federal lands, so they went about staking claims on large concessions, then raised money primarily in the public markets to finance drilling campaigns and resource studies. I’ll cover these projects more in my lithium post, but here intend only to illustrate how a rush unfolds the moment a narrative (and forecasted economics) shift.

More recent talks of mining Ukraine for rare-earths, titanium, graphite, and other minerals are rooted in survey work mostly dating back to the nation’s Soviet era. Opportunists see potentially high-quality resources coming available in a post-conflict environment, provided the right risk appetite and political connections to secure an inside track on concessions. I doubt we would have seen such a frenzy 10 years ago, before securing critical minerals became a Western obsession.

And finally, a new market catalyst for certain materials sends geologists searching operating and abandoned mine tailings for secondary, tertiary, etc. metals that hadn’t been worth recovering in the past. I shared this “Wheel of Companionality” a couple weeks back in my permitting post, and think it also illustrates the thought process guiding miners in their search for viable critical minerals resources.

Need gallium? Look to bauxite (alumina ore). Germanium? Look to zinc. Cobalt? Look to copper or nickel.

The potential for discovering untapped value is seemingly everywhere, but few resources offer viable economics in reality.

Abundantly present, rarely worthwhile

You’ve probably heard the refrain “rare-earths aren’t actually rare” at some point in the past year, or maybe even saw President Trump say “there’s a lot of rare-earth” last month. It’s true, rare-earth elements are everywhere.

But we rarely find them in sufficiently high concentrations to justify attempting extraction. Even in a world where China lacked its globally dominant position in rare-earths processing and its ability to manipulate market prices, most of the resources claimed as “containing high concentrations” of rare-earths would not be viable commercial assets. I don’t want to use the word “worthless,” because in extreme scenarios just about anything can have value.

Rare-earths are probably the most extreme example of a dynamic we see see across the critical minerals space, which involves prospectors rummaging through long-neglected mine tailings, identifying some concentration of highly desirable mineral, and declaring they have the solution to America’s problems. You may hear these projects called “trash to cash.”

For some reason, these pitches always reminded me of Brawndo’s slogan in Idiocracy.

Rare-earths are a particularly notorious example because the 2010 China-Japan crisis exposed them as an early chokepoint, and they feature as indispensable materials in high-profile military weaponry like nuclear submarines, fighter jets, and precision-guided missiles. Consequently, the 2010s saw them morph into a bugbear for the US national security community, and captivated retired enthusiasts who spend too much time watching cable news. Some of these folks self-published books, others (typically politically-connected businessmen in Western states) secured rights to long-abandoned mine tailings and started knocking on doors in Washington for funding, and many of them started piling into small cap mining stocks.

I talked to quite a few of these upstart companies, most of which had at least one retired senior military officer along for the ride to present national security bona fides and help navigate Defense procurement. It’s not just rare-earths—antimony, tungsten, vanadium, scandium, and others became popular targets.

I’ll also note it’s not just outright speculators contributing to the noise.

1. Companies developing projects for other primary minerals trying to capitalize on investor zeitgeist by claiming they’ve discovered “significant” quantities of some buzzy mineral in their resource. See a couple recent rare-earth examples here and here. Press is cheap.

2. The Department of Energy (DOE) has unfortunately played a role in hyping lower-value endeavors by allocating too much small-dollar grant funding to programs for recoveries of critical minerals from fossil resources (e.g., rare-earths from coal mines or ash ponds, lithium from produced water in shale gas fields). These funding priorities are designed more to appease Congressional interests - particularly in coal-mining regions - than for scientific merit.

Maybe you’re reading this as an investor covering another sector, asking, “So what? I see hundreds of vaporware startups, and we just master finding the real gems.”

And I’d say, fair point, however…viable projects in that sector may not be quite so dependent on direct (i.e., not tax-related) federal support to advance through development. I’d argue the relationship between mining companies, their lobbyists and other political connections, and the federal government’s general “open door” approach to engagement has become comparable to only the defense sector itself.

But with far more noise, fewer funding opportunities, and less material to diligence.

The view from Washington

Most projects will begin seeking funding once they’ve published a preliminary economic assessment (PEA), the first formal report completed by a professional engineer summarizing exploration findings. A PEA will roughly scope a project, characterizing geology and providing the first meaningful resource size and economic estimates. These estimates are very crude sketches of a future project, but conform to a regulated standard so as to not mislead investors.2 They therefore tend to be the first big project milestone used to raise equity in public markets and begin soliciting strategic investors.

At this stage though, there is very little to diligence and all economics are hypothetical under an aggressively favorable set of assumptions. PEAs are marketing documents, little more, but they also often serve as the basis for grant funding applications to the Department of Defense’s (DOD) Defense Production Act (DPA) Title III program and various DOE programs now housed under its new Critical Minerals and Energy Innovation Office (CMEI)3

At LPO, we frequently received meeting requests from mining companies that had just completed their PEA and were fundraising in earnest for their (pre)feasibility work. It was premature in every situation. In a best case fundraising and project progress scenario, developers needed another two years to complete their pre-feasibility study (PFS) and then bankable feasibility study (BFS), which would only then may have enough project definition to begin diligence with us.

I encouraged them to look at grants in other DOE offices, or DPA Title III, which could help them fund feasibility work and then come back to LPO (or any other federal debt financing office) when they at least had a BFS in hand. These earlier-stage funding mechanisms got a boost from Biden-era legislation, particularly the Ukraine Supplemental Appropriations Act of 2022 and Inflation Reduction Act (IRA).

President Trump’s One Big Beautiful Bill Act (OBBBA) added to the DPA Title III arsenal, though it’s to be determined how the administration uses it. In any case, these programs are the only early-stage financial support the US can offer its mining sector, and are purely discretionary. Unlike Canada and Australia, the US doesn’t offer any tax credits for minerals exploration.

The long game

Mining projects ultimately need a supportive commercial narrative to raise money not just for the mine and/or refinery, but also their preceding feasibility and subsequent engineering work. Projects may need anywhere from $20M-$50M just to complete their feasibility and preliminary engineering work, not including corporate overhead. That also doesn’t include more detailed engineering work leading into construction.

Mining is an industry driven by hype, momentum, and the never-ending need to raise cash in public and private markets. While some projects backed by mining majors or private equity shops can take a quieter approach, publicly-traded junior miners spearhead the vast majority of projects and, like venture-backed startups, live from one fundraise to the next.

Most will list on the ASX or TSX4 prior to completion of a PEA, and may even use their initial share offering to fund it. From there, they feel constant pressure to boost their share price. Hate the game, not the player.

If the market turns south for a particular mineral - or for the mining sector broadly - market valuations suffer and fundraising grows substantially harder. Developers will try to pump their stock price through aggressive marketing, and then raise money through additional share offerings if they can’t land a major strategic investor. Contra most technology startups, companies can sustain themselves for many years with effectively no progress because the asset isn’t going anywhere, and it’s not like competing technology leaves their product in the dust. It’s maybe akin to sitting on patents.

Because of these dynamics, there’s nothing a mining executive loves more than the ability to make a public announcement about something the company can spin as a positive step forward, however minuscule (or entirely meaningless). Projects have a natural set of milestones, some of which I included in the process flow earlier, and also includes necessary permitting steps. Developers supplement these with additional drilling campaigns, “pilot” testing, and commercial agreements to improve the forecasted economics for their projects.

Sorting wheat from chaff

Junior mining companies are constantly looking to Washington and other Western capitals for support, not just for tangible financing assistance, but also - yes - to help them boost their stock prices.

During both the Biden and Trump Administrations, companies have increasingly sought out any sort of federal action to claim political support for their project. I mentioned FAST-41 designations last week. But any sort of progress on federal financing, including something as meaningless as an application submission, ends up in a press release. I’ll talk more about some of these next week, as they pertain to facility financing.

A clear majority of the mining companies I met with in my time at LPO were these early-stage juniors, most with projects too premature for any sort of project financing discussion. And lest I sound resentful about these exchanges—for the most part I didn’t mind!

Yes, I eventually tired of hearing every single executive boast of a “world class resource,” namedrop policymaker support, and exaggerate readiness…but I also engaged nearly every project in the country (and many international ones seeking to build US processing facilities), learned a ton about geology and various mineral markets, and developed a strong eye for project readiness and viability.

Those conversations also helped me recognize where the US was well-positioned to build its own assets, and where it would need to look abroad to allies to mitigate supply chain chokepoints. I and my counterparts across US financing agencies were able to use those insights to inform policymakers in both the Biden and Trump Administrations. Think of it as the best market intelligence database money can’t buy.

Festivus in February

Before I wrap things up…I’ll share a couple minor gripes about the relationship between industry and government:

1. I did grow annoyed with many DC lobbyists/advisors who clearly exercise little discretion in accepting clients, and will demonstrate their “value” by getting non-viable projects in front of every federal office they can — no matter the program fit. They did their clients no favors.

2. In Washington, “no” is often not an acceptable answer. Remember how I said many of these more speculative projects are led by politically-connected businessmen in Western states? “No” would often result in renewed engagement via some member of Congress or another corner of the executive branch. And those attempted end-arounds grew more frequent in the Trump Administration.

I appreciate that my leadership in both Administrations relied on my judgement to speak for the office…that a project wasn’t a good fit for us.

LPO was the wrong tool for most domestic projects that sought federal financing support during the Biden Administration, in large part because many of those with strong potential weren’t sufficiently advanced. They needed grant support, and thanks to DPA Title III, some of those stronger projects were in a position to receive full project financing from the Trump Administration.

We’re building a pipeline of projects across administrations. Policy continuity matters.

Final thoughts

Much of what I explained in this post pertains to the publicly-traded junior miners that comprise the majority of critical minerals project development. Projects developed by private equity, family offices, and mining majors can share many of these characteristics, but often acquire projects at more advanced stages and have more disciplined development spend, as they don’t constantly need to tap public markets for sustaining capital.

You also may have noticed I haven’t talked much about innovative technologies to unlock resources previously considered uneconomic for extraction, or recycling. There’s some really interesting and promising work in both areas, and I plan to cover them in a future post. Also, how federal policy supports (or doesn’t) those areas.

Next week I’ll continue with project development through feasibility and engineering, and discuss financing for commercial projects.

See you then.

Last week’s post addressed permitting as an overstated barrier to US critical minerals production. This week, I’m touching on what I’ll call “policy kayfabe,” where an administration pushes what it frames as bold or transformative action to support an industry, but accomplishes little in reality.

President Trump has done this more explicitly with minerals permitting to demonstrate support for the mining sector. The Biden Administration’s socio-economic initiatives and “raise all boats” messaging produced varying effects across different industrial sectors, but delivered more good feelings than results with critical minerals. If anything, these approaches have diverted resources better spent addressing first-order chokepoints.

Both administrations have pursued their respective policies with too much attention to parochial or ideological interests, giving the appearance of action while not sufficiently addressing industry needs. Much of it amounts to empty signaling.

Let’s dig in.

The underwater rock collection

The Trump Administration has made a concerted push to support deep sea mining, with an executive order in April 2025 and action last week by the National Oceanic and Atmospheric Administration (NOAA)1 to accelerate project permitting, effectively circumventing international law.

I’ll just come out and say I’m not a fan of deep sea mining, and it has nothing to do with attachment to international law or environmental concerns. I find it to be a fascination of industry outsiders - tech guys in particular - with no practical knowledge of mining economics or industrial supply chains.

Silicon Valley loves deep sea mining because it relies on breakthrough innovations that “disrupt” the status quo, and purports “massive scalability” on claims of a huge addressable market. And something about scooping little metal balls (nodules) from the ocean floor just sounds cool.

The Trump Administration loves it because Silicon Valley loves it, and because it feels like a “Great Power” competition battlefield with China.

I can’t categorically say American deep sea mining won’t ever produce meaningful metals recoveries, but the logistical and economic hurdles to operationalizing these resources are staggering. I saw pressure within DOE to support deep sea nodule processing in our funding programs, without any real consideration for commercial merit. Hopefully, we don’t see meaningful commercial funding support steered away from more viable resources and processing technologies.

1. The infrastructure is non-existent to support a fleet of mining ships (which also don’t exist),

2. The Jones Act would apply if we mine in US territorial waters,

3. The flowsheets for processing polymetallic nodules have never been demonstrated at meaningful scale, rendering the economics of commercial processing entirely speculative, and

4. The Trump Administration’s war on electric vehicles snuffed out any attempts at building domestic pCAM production for nickel-based cathodes in the US, all but rendering domestic nickel and cobalt processing to battery-grade sulfates unfeasible and undesirable.

I’ve stopped trying to rationalize market valuations, but this is one of the sillier manias I’ve seen in the sector.

Base-d refineries?

Another genuine head-scratcher is the Trump Administration’s obsession with siting critical minerals refining on military bases. It’s one of those things that sounds like a creative solution unless you actually know how our industrial economy and site selection work in practice.

Typically when siting refinery projects, developers evaluate three broad priorities:

1. Logistics and geographical alignment

2. Incentives and costs

3. Ease of doing business and speed to commissioning

You’re not building a mineral processing plant in the middle of nowhere unless it’s next to your mine. Otherwise you want proximity to suppliers, customers, and the transportation network that minimizes frictions between you and them. And if you’re not co-locating at your mine site, you’re definitely not building a plant without some combination of meaningful state and local incentives, a reliable labor pool, and affordable access to power. Finally, because you may be working with toxic materials, including reagents and waste byproducts, you want to site somewhere relatively permissive from a permitting standpoint.

Which brings us back to the scheme prioritizing critical minerals refining on military bases. I don’t see the point. Free land, a permissive federal government, and (depending on the material) access to your final customer sounds great in theory. In reality, we have no shortage of available sites for small and medium-scale projects—sites that state and local governments prepare precisely to enable industrial facilities.

Now it’s possible the Administration finds some small-scale defense manufacturing chokepoints that it can address with on-site production at a base, but we don’t design military bases around industrial projects in the first place. I find it unlikely they’d be conducive for processing minerals given the requirements of those facilities, let alone stronger candidates than our existing industrial zones. And certainly we don’t want to expose any military living quarters to the more toxic minerals processing facilities that might be more difficult to permit.

How critical minerals refinery site selection works

I maintained an open dialogue with state and regional economic developers during my LPO tenure, and was privy to many site selection processes on the applicant (and prospective applicant) side. There’s a reason the same states kept popping up on shortlists—free land, proximity to suppliers and customers, great incentives, growing metropolitan regions with the right kind of workforce, and ease of permitting.

The most competitive states, primarily in the Sun Belt, do a phenomenal job of collaborating with their electric utilities on quick access to cheap power,2 develop both industrial parks and megasites with access to highway and rail infrastructure, and ensure those sites are clear of (or at least designed around) environmental and cultural resources to avoid permitting snafus.

For critical minerals refining, the Gulf Coast has a particular advantage with the petrochemical sector and cheaper access to chemical reagents, as well a proximate market for some waste products. For projects expecting to rely on imported mineral feedstocks, access to key port and river infrastructure presents a significant advantage. I found many projects drawn to the Mississippi River, where they could barge imported materials upriver from the Port of New Orleans.

States can reform their policies to improve competitiveness vis-a-vis one another, but as a nation we have no shortage of attractive sites that offer the benefits military bases purportedly would…without the downsides.

Too much listening, not enough doing

The Biden Administration had its fair share of unproductive policy steers too.

I’d argue its greatest crime was trying to appease everyone, not just various progressive interest groups (“The Groups”), but also industry stakeholders that held implicitly opposing interests. I’m planning to cover the latter when I write about demand signals in a few weeks, but for now will stick to community interests.

Too much stakeholder input, too much fear of upsetting any coalition member. Too many listening sessions and box-checking exercises that aren’t tied to tangible outcomes, or worse, may divert resources from producing tangible outcomes.

I want to separate community-oriented activities into two discrete groups:

• Those that are required by law and help deter lawsuits.

• Those that go above and beyond what insulates projects from lawsuits.

As I discussed last week, reforming federal statute at the expense of environmental or other protections may enable cost and timeline reductions for the mining sector writ large (though are of little help for critical minerals). But our laws are our laws, and agency activities performed to ensure compliance or reduce litigation risk are not inherently a waste of time or resources. At least at LPO, that was the majority of work our environmental and community benefits-oriented personnel covered.

The Biden Administration’s Justice40 initiative3 and associated polices went above and beyond the protections required by statute. The initiative was redistributive in nature, and ultimately required federal funding recipients to commit additional benefits to disadvantaged communities.4 In addition to explaining how their projects would align with Justice40, applicants would, starting in 2023, also have to propose Community Benefit Plans (CBP) with their applications for grants and loans.

I won’t discuss the philosophical merits of Justice40 or CBPs because I’m trying to keep Tailings focused on minerals security objectives, not larger societal values. I also don’t want to make sweeping statements about these policy initiatives across all sectors of the economy. Their effects on $10 billion semiconductor fabs or renewable energy deployments differ from those on critical minerals projects.

Community benefits only exist if there are benefits in the first place

The Biden strategy aimed to make everyone feel like a winner in American re-industrialization, while nudging companies to align with the Administration’s objectives. Despite bad-faith accusations from political opponents, the Biden team went out of its way to not force companies to radically alter businesses practices against their will…or pick winners and losers. I would argue to a fault.

Instead, the Administration attached strings to funding opportunities, in hopes of influencing corporate decision-making. Some of these came via statute—like the CHIPS and Science Act’s (CHIPS) notable childcare requirement, but others it implemented pursuant to early executive orders.

Grant programs would set aside anywhere from 10% to 25% of their scoring weight for social criteria (e.g., Justice40, CBPs, etc.). Less viable project sponsors with good consultants would often craft well-written narratives and check program requirement boxes effectively to compensate for structural project weaknesses.

In theory, sponsors that rose to the Administration’s aspirations were better positioned to deliver projects and successfully operate them. Distribute profits to the surrounding community, you’ll face less local resistance. Invest in local/regional education, you’ll build your future workforce. Sign project labor agreements (PLA) or encourage plant unionization, you’ll more easily source and retain workers.

In practice, these project elements did little to sort viable from non-viable, and cost both time and effort from the applicants and reviewers.

I plan to cover DOE’s battery grants and others in greater detail on the topic of funding, but I don’t believe these social criteria meaningfully weighed on project selection the way they likely did for US Department of Transportation (USDOT) or Environmental Protection Agency (EPA) deployment programs. Instead, they just increased our administrative burden.

The Biden Administration spent too much effort ensuring the hypothetical benefits of projects would be broadly distributed versus ensuring the projects delivered at all.

100% of nothing is…still nothing.

LPO wasn’t immune either. Shortly after I joined, the CBP requirement started creeping into our programs. First these were treated as confidential application documents, then we eventually required applicants agree to publish them. The logic being, in the absence of a legally-binding Community Benefits Agreement, a publicly-stated commitment is harder to walk back than one kept behind closed doors. Publication was also a way for the Administration to show it was delivering for progressive coalition partners (even though projects had yet to deliver).

We thankfully didn’t write CBP terms into loan agreements as covenants that could trigger events of default. Ultimately, most of these commitments were not overly burdensome to projects, and I’d concede they were likely net beneficial if projects actually delivered. But I found the appeasement of organized labor in particular to be excessive and potentially counterproductive to industrialization efforts. PLAs locked in higher construction costs at a time when wages were already rising along with materials inflation. Concerns that the Biden Administration would compel pro-union corporate policies did deter some prospective manufacturing applicants, though I didn’t see it with mining and minerals refining projects.

I’ll note that, despite the Trump Administration immediately ripping up every DOE CBP and going out of its way to punish funding recipients embracing any social policy it deemed “too woke” (also stupid and counterproductive), it did recognize the importance of prior workforce development efforts. Many of these project elements were preserved and initiatives continued, albeit with different branding and without the pro-union posture.

Not everyone gets to be a winner

I’ve already criticized the Trump Administration (and Republicans generally) for excessive deference to Western US mining interests. The Biden approach, reflected primarily in the Infrastructure Investment and Jobs Act (a.k.a. “The Bipartisan Infrastructure Law” (BIL)) and CHIPS legislation, was to give every region of the country a stake in its economic agenda. The political thrust of that approach largely failed with Trump’s election, but I would argue also spread the proverbial peanut butter too thinly in terms of industry investments.

Not every region has the natural resources or existing industrial assets to play a significant role in certain sectors of the economy. Most mineral resources will never be economically viable; not everyone gets to be a hub for critical minerals processing. I’ll discuss these dynamics in greater depth, especially in my future posts on lithium and rare-earths.

The Biden Administration humored too much fantastical thinking about industries America had hardly started to build, when it needed real commercial beachheads. Some of this approach leaned on the traditional R&D funding model through universities and the national labs, but it also supplemented those smaller grants with workshops, listening sessions, and other publicized events intended to feel inclusive without a credible roadmap to commercialization.

Much of this was continuation of programming from prior administrations, but since President Biden was the first to take a big swing at commercial projects in the sector, I find it worth highlighting how his administration’s programming diluted efforts to solve for commercial challenges. It would have been better served focusing on higher-quality opportunities. Where statutory parameters on grant funds were an impediment, it should have worked with Congress to reprogram them.

Final thoughts

In an earlier draft of this post, I discussed at length the Trump Administration’s abuse of the FAST-41 Transparency Dashboard. It has been handing out FAST-41 designations like Halloween candy, mostly to signal extraordinary efforts in streamlining NEPA review. If you’re unfamiliar with FAST-41 and not a permitting wonk, I don’t necessarily recommend subjecting yourself to the headache of researching and trying to understand it.

I scrapped the section because I found the entire FAST-41 process and different categorizations (and impacts on NEPA reviews) to be too arcane and difficult to summarize efficiently. The important takeaway is we’re seeing the Trump Administration conflate what amounts to a signaling exercise (elevating as many projects as it can with FAST-41 designations) and tangible efforts to short-circuit NEPA review entirely. I already covered the risks of effectively skipping a proper NEPA review last week, so will leave it at that.

If you ask project developers which form of policy kayfabe they prefer, they’ll almost certainly tell you Trump’s. The Biden approach tried to empower workers and community stakeholders, to minimal commercial effect in mining and metals. Mostly headaches for federal funding applicants and ephemeral dreams.

The Trump approach lets them pump asset valuations in public markets with little to no effort. More to come on that front.

See you next week.

Permitting is a problem. But don’t let anyone tell you permitting is the problem.

The stars finally seem to be aligning for some measure of federal reform, though I’ll maintain a healthy dose of skepticism until I see it. In any case, I don’t intend to dig into specific proposals or speculate on their effects. There are much smarter people on these issues and reform efforts,1 so I’ll leave it to them to analyze and handicap legislation.

But the imperative is unmistakable, as a broad set of regulatory hurdles continue to snarl the energy infrastructure buildouts necessary to meet both parties’ industrial objectives. I’ve consistently seen permitting cited as a primary obstacle to recovering critical minerals. And I’m here to tell you that’s probably not true.

I can’t tell you how many times I heard a developer’s pitch include “and we’re already fully permitted” or “we’re on private lands and don’t need any federal approvals,” followed by a plea for federal financing assistance.

In a game of poker…that’s what we call a tell.

If you’re approaching the federal government about financing your project, permitting likely isn’t your problem. It’s project economics. If anything, because of the National Environmental Policy Act (NEPA) and other federal regulations, you’re exposing yourself to new potential headaches by pursuing federal funding.

And aside from developers of true world-class assets in gold, copper, iron, and other major commodities, just about everyone in American mining these days needs some form of federal financial assistance to make the math math.

I want to make this very clear up front. Permitting, NEPA reviews, and other avenues for adversarial litigation do impose time and financial cost burdens on project development. In some cases, severely. So before anyone comes back at me pointing at Resolution Copper or Pebble Mine, yes, I know America has its share projects that have been NIMBY’d into development hell.

But when we’re talking about the majority of designated critical minerals, regulatory hurdles are not a primary obstacle. Economics and US investor expectations for risk-adjusted returns on capital are far more problematic.

So why do we hear so much about permitting as an obstacle to minerals security?

The permitting bugbear, explained

Let’s first step back and clarify what we mean by “permitting,” since we see many local, state, and federal regulatory issues conflated in media.

There are actual land use and some environmental permits governed by state and local authorities. Then there are federal environmental permits, requiring compliance with statutes such as the Clean Air Act, Clean Water Act, Endangered Species Act, and others. Finally, policymakers frequently conflate a whole host of regulatory issues ranging from labor laws and Tribal claims to historic and/or religious heritage, and throw them under the banner of “permitting.”

If a project is on federal lands (most of them west of the Rockies), is determined to impact protected assets (waters, endangered species habitats, historic sites, etc.), or receives federal funding, then the project requires a “major federal action” and NEPA review.2 The Trump Administration is taking as big a hatchet to these parameters as it can, but aside from addressing some risks of this approach, I don’t plan on discussing individual deregulatory actions (or their legality).

Ultimately, this collection of statutory and regulatory measures does produce industry frustrations and fuels rhetoric about creating long project timelines, uncertainty, and weaker returns on investment.

Industry frustrations and policy misdirection

The average time of mine development in the United States from inception to commissioning in the US has ballooned in recent decades to nearly 30 years. I don’t have the dataset available, but I imagine that eye-popping figure deserves a little additional context.

Mining exploration and development activity in the US has withered over the past decades. Few economically viable projects are in active development, and we see relatively low levels of investment in most early-stage projects. Many projects languish for years on shoestring budgets, with funding trickling in for exploration and development work. Only after a project can demonstrate its value to strategic or other deep-pocketed investors does it see the sort of cash infusions necessary to accelerate more expensive feasibility work, permitting, piloting, and qualification.

In other words, these long project timelines are a function of market structure.

I’ll cover process and capital raises in greater detail in a subsequent post, but to get a project from exploration to the start of construction, it needs favorable market conditions at multiple stages of project development to raise cash. Those dynamics speak to a mismatch between modern Western shareholder capitalism, mining project development needs, and our policy incentives.

So I’ll restate the question — why the obsessive focus on permitting with other greater structural issues at play?

Here are a few explanations:

1. Clearing various permitting hurdles does impose costs on projects even if all goes smoothly. It’s effort and timeline uncertainty developers would certainly prefer to minimize, though most of these activities are completed well before projects have raised necessary project financing to advance into construction.

2. Mining is a politically conservative industry. I don’t want to make this a political post, but this point is important for understanding a key influencer of our mineral policy discourse. Mining executives and operators have a cultural bias against regulation. Some of that is influenced by experience, but in many cases, they genuinely overestimate the extent to which regulations are impairing their projects, and prefer to blame government rather than structural weakness in their businesses.

3. Calls for deregulation and blaming (what are considered left-wing) obstacles to doing business resonate better with Republican policymakers than asking for subsidies. Increased geographic partisan sorting also means states with more federal lands and higher-quality mining assets are now overwhelmingly represented by Republican governors and federal legislators.

4. Some projects, particularly the big ones that draw national attention, genuinely do get ensnared in permitting or litigation hell.

To the Trump Administration’s credit, I saw a clear evolution in thinking over the past calendar year.

Early in 2025, its focus was almost entirely on deregulatory actions to “unleash” minerals projects. I got the sense most of the political appointees at agencies genuinely believed “cutting red tape” would kickstart mining projects because that’s what they were hearing from lobbyists (not the National Security Council (NSC), where appointees had real sector experience). That lobbying fed into ideological bias, and they largely ignored the experienced career staff trying to educate them otherwise.

While those efforts haven’t subsided (more on that next week), I saw more manpower and financial resources turned toward broken markets and other economic barriers to project financing as the year progressed. I could see a recognition at the NSC and interagency level that deregulation alone wouldn’t move the needle on administration objectives.

(Unfortunately, I also saw the Administration inflict considerable damage to our supply chain efforts by freezing grants, gutting supportive tax credits, and crippling markets for key demand drivers. But more on that another time…)

Why are critical minerals different

In last week’s post, I discussed some of the characteristics that set “critical minerals” apart from other mined materials.

By virtue of their susceptibility to Chinese manipulation or other highly volatile market dynamics, most critical minerals don’t operate on the sorts of natural supply-and-demand driven commodity cycles that base and precious metals do.3 As a result, we typically see critical minerals project developers fall into one of two categories:

1. Mining majors that determine the economics justify processing or selling tailings from a larger ore body to extract minerals they wouldn’t otherwise bother recovering.

2. Junior miners that believe they can capitalize on a niche market where the majors won’t play.

Take a run through any of the high profile mining projects that have endured decade-long legal and/or regulatory battles and you’ll notice they all have something in common: They’re almost all mines for precious or base metals. Huge projects with long mine lives. Massive footprints and enormous capital requirements. Project developers know the return on investment needs to be worthwhile if they’re going to endure a costly regulatory and litigation gauntlet.

But these mine developers in the US rarely put forth the time, money, or effort to explore feasibility of recovering lower volume metals. They’ll publicly market or float to the government their potential critical mineral recoveries from tailings, but don’t want to pay for what they consider relatively low value, high risk opportunities. Monetizing those tailings wouldn’t incur meaningful permitting burdens given existing site operations.

In the second group, sponsors have fewer resources, less margin for error, and typically spend much longer developing assets before construction activities, if they reach that point. Projects also often trade hands multiple times before construction. This is also where we tend to see mining-focused private equity shops and family offices play a larger role.

In both groups, capital is the ultimate constraint.

Adventures in lithium permitting

Lithium is one of the few minerals that sits somewhere in the middle of the two groups I described. It’s not a precious or base metal, but the US has large enough forecasted demand and sufficiently good (if unconventional) resources to justify large mine development.

Ernest Scheyder’s excellent book “The War Below” opens with the saga of a lithium miner Ioneer and its struggle against Tiehm's buckwheat. A single endangered flower, apparently fond of the lithium-rich soil at Ioneer’s Rhyolite Ridge site, forced the company through a ringer of highly-publicized legal and regulatory headaches that ultimately required site plan modifications and other extraordinary conservation efforts to clear a path to project construction.

Ioneer wasn’t alone in drawing litigation. Lithium Americas, which LPO also financed and is now nearly a year into construction on the Thacker Pass project, faced its own hurdles. A Navajo group sued during the mine’s development and claimed Thacker Pass would destroy its historic site. Piedmont Lithium (now Elevra, following a 2025 merger with Sayona Lithium), which withdrew both its projects from LPO’s application pipeline amidst reorganization of its business, found its Carolina Lithium mine and refinery project outside Charlotte, NC bogged down by zoning hurdles and fierce local opposition. Scheyder covered both of these projects in his book.4

But why is Lithium Americas currently the only commercial lithium mine in construction? Why is Tesla’s Corpus Christi plant the only standalone lithium refinery in construction? Chalk it up to timing and commercial factors.

Lithium projects had a tight window from 2021-2023 to secure major offtake and investment agreements while prices were soaring, demand growth charts looked like hockey sticks, and automakers were racing to secure long-term battery metals supply. Euphoria waned in 2024, and a bear market set in for much of 2025, before some green shoots emerged late in the year. Lithium Americas was the only developer to clear all commercial and financial hurdles before that window closed. And of course Tesla could finance from its own balance sheet.

One could argue that absent the delays incurred trying to accommodate a flower and its litigious NGO champions, Ioneer would have had an easier time fundraising and advancing through pre-construction project milestones when lithium prices were elevated, the US lithium-ion battery market had a stronger growth narrative, and joint venture partner Sibanye-Stillwater had more appetite to pursue the project.

While Carolina Lithium remains mired in local permitting fights, Piedmont Lithium cancelled its planned Tennessee Lithium refinery outright due to market conditions, despite being fully permitted. Even with all approvals in hand, Carolina Lithium would still face similar financing challenges as every other US lithium project.

That’s not to say these are unworthy projects, or won’t move forward, just that market conditions have turned unfavorable to developers. And that’s the case across the board, not just for those projects I named. Hopefully, rebounding lithium prices (they’ve roughly doubled since June) will re-stimulate investor interest and financing activities. Ioneer still managed to close their loan with LPO (no small feat, given the diligence entailed) and maintains an attractive debt financing package.

The window will open again, it’s just a question of when and how wide.

I’m planning a deep-dive post on lithium in the coming weeks, so won’t elaborate on market forces any further here, but will just note the ultimate barrier to final investment decision (FID) and construction for all of these projects is ultimately commercial and rooted in economic expectations, not permitting.

The obligatory rare-earths mention

Rare-earths are another exception, given the attention they’ve received since the 2010 crisis, and the incentive to develop domestic projects despite challenging economics. There’s long been an implicit assumption that policy support would materialize to subsidize and protect these projects on national security grounds.

Heavy rare-earth mining in particular is notoriously environmentally hazardous, and our regulations certainly create barriers to building mines in the US. But you also don’t see many folks on either side of the aisle arguing to bring this to America.

I’ll be doing a separate post on rare-earths, so will leave it there for now.

The risks of cutting corners

I saw toward the end of my tenure at DOE that the agency was grasping for legal arguments to determine NEPA wouldn’t apply to any projects it funds with grants or debt because the agency didn’t exert “significant control” over the project scope. Therefore, our funding wouldn’t constitute a “major action.” Public reporting has covered the move for LPO, though I’m not clear how it played out. I’m not a lawyer, and won’t weigh in on whether these are sound interpretations.

But I do see a risk with a federal agency declaring NEPA no longer applies to its projects. Especially when the political appointees responsible for pushing these policies have no experience delivering projects and don’t understand practical execution barriers.

• A subsequent administration could simply say “no, NEPA does in fact apply to this project” and halt its progress.

• Plaintiffs seeking to thwart projects may find greater success in the court system by arguing agencies skirted federal law.

Serious project developers will exercise more caution in exposing themselves to future legal risks, jeopardizing the project or exposing themselves to significant financial damages. I imagine those that believe they can move quickly to complete projects may bet on safe harbor from consequences from a future administration. But ultimately, the Administration is opening projects up to unnecessary risks they may regret embracing.

Projects may avoid hiring environmental consultants, but I never once saw a project at LPO held up by its NEPA review. Financing and other commercial conditions were always the final barriers to projects advancing into construction.

Final Thoughts

I truly don’t want to be dismissive of permitting as one barrier to project development and delivery. Every little bit of enabling policy helps, assuming we’re comfortable with the tradeoffs.

But just as YIMBY policymaking in cities can’t fix housing economics overnight, deregulating mining or streamlining permitting won’t alleviate the structural economic forces holding back project development.

• Based on my experience, I lean to the deregulatory side and would like to see moderate legislative reforms reduce burdens on project developers. I simply don’t think aggressive reforms are necessary to achieve our national objectives and do carry significant risks of harm and blowback.

• Reducing regulatory burdens would mitigate some uncertainty around project timelines and might incentivize investment at earlier project stages, with better line of sight to returns.

• Mine developers might see adequate returns in smaller, less-complex projects with lower capital intensity. We want a more diverse mining ecosystem that isn’t just megaprojects.

• It’s tough to know which federal laws and regulations pose the greatest threat to project delivery or which ones have the most support for loosening reforms.

• We shouldn’t pretend deregulation is a salve for an atrophied domestic industry and apprehensive capital markets to address critical minerals challenges.

I had some family travel and other obligations that slowed my writing over the past week, and as a result I got this post out later than I’d hoped. To get myself back into an early-week release cadence and avoid another 3500+ word post, I split this one. Next week I’ll continue pulling at the permitting thread.

Deep sea mining, refinery siting, and more on tap!

When the US Department of Interior (DOI) published its final 2025 Critical Minerals List in November1, the copper lobby finally achieved its long-sought victory. The hottest industrial metal had finally made the list along with nine other new “critical minerals,” increasing the federal designation to 60 in total.

That particular inclusion was unsurprising. The lobbying campaign had been intense and sustained since DOI’s previous list dropped in early 2022 and omitted copper, as some of mining’s biggest names have high-profile US projects in development, including Rio Tinto, BHP, Glencore, Teck, and Ivanhoe Electric. And given the macro narrative around copper’s growing importance in achieving national energy objectives, I expected influence and zeitgeist were bound to prevail if objective analysis didn’t reach the “right” conclusion…irrespective of administration.

I also felt the lobbying blitz firsthand. Complaints about the DOI list slipped into most of my introductory conversations with industry stakeholders. They almost always hit me with their standard pitch as to why copper deserved Interior’s designation, sometimes noting the Department of Energy (DOE) had included copper on its own “critical materials” list (or confusing the two lists).

But they had at least one point — if DOE considered copper “critical,” why hadn’t DOI?

And why did they fight so hard for inclusion? What’s at stake?

Quite a bit, potentially. Especially after the Inflation Reduction Act (IRA) introduced a new critical minerals tax credit indexed to DOI’s 2022 list.

That 45X production tax credit applied to mining and refining the 50 critical minerals Interior designated in February 2022,2 though doesn’t automatically update eligible minerals with a new list. For now, copper and its fellow 2025 inductees aren’t currently eligible for 45X, but legislative action can now amend it.

Originally created as a permanent tax credit under IRA, President Trump’s One Big Beautiful Bill Act (OBBBA) enacted a sunset provision that rendered the tax credit effectively worthless for any project not already in operation or under construction. I’m planning to cover the 45X credit in a future post, so for now will only say that stripping it of its permanence was among the most short-sighted and self-defeating actions on minerals security we’ve seen during the second Trump term.

That tax credit, several federal grant and lending programs specifically targeting critical minerals production for domestic supply chains, and the marketing value that flows from Uncle Sam’s endorsement of strategic importance have raised the stakes for list inclusion.

Financial incentives invite stakeholder lobbying, predictably warping what had started as (and should be) scientific, transparent assessments. The result is an increasingly political and less substantive process that muddies our strategic planning.

**I’ll preface the rest of this post by warning the topic is incredibly messy and complex, and the policy infrastructure we’ve Frankenstein-ed to support it is a challenge far bigger than any one presidential administration can fix. So bear with me, while I try to set the table for other topics I’ll be covering in Tailings.

Framing the problem

Sometimes you gotta hand it to the policy wonks. The Energy Act of 2020 offers a strong definition of critical minerals, establishing criteria of inputs to the US commercial and/or defense industrial base and existence of threats to their supply chains. I’ll leave it to the lobbyists and Congressional staff to explain why the definition specifically precludes energy fuels, which sidelines uranium alongside fossil fuels, but would guess they saw a slippery slope and wanted guardrails.

(Uranium was second only to copper in my “put us on the DOI list” complaint box.)

While critical minerals have their roots in the mining sector, they’re better understood as industrial materials with strategic significance and supply insecurity.

I’d go as far as arguing that excessive emphasis on upstream mining has negatively impacted policy discourse, putting far too much emphasis on permitting as an industry challenge, paying far too much deference to highly speculative interests in western US states, and especially in this second Trump Administration, creating blind spots around the downstream customers that dictate market demand.

These are all topics I plan to address in this Tailings series.

We’re less concerned with digging lithium or gallium out of the ground than processing them into improved chemicals or other materials for industrial end uses. Project developers make commercial assessments about where or how extensively they invest in the value chain (i.e., mine, refinery, or some combination of both), but for “critical minerals policy,” we primarily care about raw materials insofar that they enable or constrain our ability to access downstream products. None of this is to say domestic mining is irrelevant. It’s not. We just need to separate value as a standalone economic activity from impacts to industrial supply chains.

We also typically frame critical minerals as materials with current or forecasted supply chain insecurity. Nobody would argue iron ore is unimportant - it remains one of the world’s highest value commodities by volume - but we have plenty of it on any relevant time horizon. Aside from Robert Friedland’s unsuccessful push to attain a designation for high grade iron ore on the 2025 DOI list, it’s just not something we see as risky and needing concerted action from government to solve.

Market forces

Security can be, but is rarely a simple supply-and-demand dynamic. I’ve yet to see a compelling case that copper demand isn’t set for consistent long-term growth, and we’ll certainly see periods where demand growth outstrips new supply on the market. But the existence of a cyclical or even structural deficit doesn’t implicitly constitute a strategic threat or national emergency. If copper’s deficit increases the economic viability of building new mines or expanding recycling efforts, or manufacturers can reasonably respond through substitution and thrifting,3 then supply and demand are likely to rebalance without federal intervention.

Alternatively, if you believe the advocates' (including Friedland) narrative of extreme and protracted copper scarcity due to declining resource quality and barriers to building new mines, you might accept the need to designate copper as “critical” and activate more federal support. The “crisis” narrative also feeds financial speculation to the benefit of asset owners, so it’s rarely a selfless and unbiased assessment.

A coincidence that Friedland’s Ivanhoe empire has significant interests in both iron ore and copper…I think not!

Supplier risks

But most commonly, the minerals security threat assessment focuses on adversarial control or regional instability along the value chain, or a combination of both. The simplest illustration of this dynamic is the most commonly cited in recent years — China’s near-total control over supply chains for many refined metals.

Take this 2025 visualization from the United States Geological Survey (USGS) highlighting American direct dependence on Chinese exports, which actually understates the problem.

China maintains an ability to manipulate global markets for many materials, rippling impacts through other global producers. It also controls chokepoints for specific high-value products, as we saw last year via crippling export controls on rare-earth elements such as dysprosium, terbium, and samarium needed to make the highest-performance magnets. (It hit magnets with export controls too, for good measure.)

But even minerals with more diverse production face significant risks of shocks.

For instance, South Africa and Russia are the world’s largest miners of platinum group metals (PGM),4 and both countries represent genuine supply risks. South Africa’s mines have financially struggled in recent years from the country’s persistent power crisis and labor unrest. Russia is a Western adversary and always one sanctions imposition or embargo from throttled supply. The USGS technical analysis supporting DOI’s 2025 Critical Minerals List illustrates these relative risks to US palladium supply (pages 8-11), implying we’ve been relatively fortunate thus far to suffer one disruption but not both simultaneously.

The call to action

These threats justify criticality designations and federal intervention to the extent market forces cannot or are unlikely to solve them.

If China cuts off supply of a metal, sends market prices soaring, and throws US industry into a crisis, any remaining suppliers will reap a windfall from the lucrative ensuing panic. But when mines and refineries require years of planning, calculated assumptions to underpin financing, and the belief that project economics will remain viable for a period often measured in decades, short-term shocks alone are unlikely to incentivize new production. The risk of supply constraints (natural or artificial) dissipating and leaving new producers high and dry with uneconomic production is too great.

Conference panels, industry thinkpieces, and corporate statements may nod to a “This time is different…no, really!” posture and a willingness to invest in de-risked alternatives, but offtaker commitments are subject to changing priorities, product decisions, and cost-cutting pressures to maximize shareholder value. Similarly, China’s reticence to weaponize its control of certain materials is partly rooted in its own risk calculus that end users might make durable commitments to alternate sources or invest in substitutes.

Many readers of Tailings may already understand these dynamics, but I want to emphasize what should be our fundamental principles for assigning criticality. The more we stray from them, the more we render the term meaningless.

Critical “minerals” vs. “materials”

All minerals are materials, but not all materials are minerals.

While USGS performs a comprehensive minerals survey, and then recommends criticality designations after assessing threats and downstream impacts to industry, DOE works from the other direction. It sets technology priorities, and then looks upstream at key material components to identify supply chain threats. That might seem like a minor difference, but I’d argue better lends itself to prioritization and strategic planning.

Like its USGS counterpart, DOE’s Critical Materials Assessment informs a triennial list mandated by the Energy Act of 2020, though identifies both minerals and improved materials of importance specifically to the US energy sector. That approach allows DOE to not only mark potential chokepoints, but also better coordinate risk mitigation with industry stakeholders by creating both stable external feedback mechanisms and personnel expertise at the agency and supporting National Labs.

Industry groups have pushed Congress to compel harmonization of agency lists, though the imperative is perhaps weaker after DOI added every mineral from DOE’s 2023 list (…also raising questions about the legality of adding uranium when Congress explicitly prohibited it). Only two non-mineral materials, electrical steel and silicon carbide, remain unique to DOE’s assessment.

Congress should still promote consolidation to minimize industry confusion, and consider the relationship it wants to foster between the federal list and financial incentives. Do we want to restrict tax credits and grant programs just to critical minerals, or is it worth broadening that aperture to cover other critical materials?

1. USGS differentiated in some instances between unrefined and refined mineral products in its criticality analysis for 2025, but we need to see greater emphasis on actual chokepoints and downstream materials like those already considered by DOE. That likely extends beyond USGS’s traditional capabilities, which means any expanded mandate would need to add long-term funding and other bureaucratic infrastructure.

2. There’s an outdated logic to setting USGS as the steward of national industrial priorities, even though it boasts (a now severely diminished) staff of geologists, metallurgists, and economists. While not the hardest hit agency by DOGE’s chainsaw, USGS suffered deep cuts and an exodus of the very people responsible for the 2025 analysis. It’s generational damage. The agency now lacks the institutional advantages that allowed it to lead these efforts previously, and should prompt longer term thinking about how the US wants to manage supply chain strategy in an era with revived emphasis on re-industrialization.

Since the 1980s, our bureaucratic capacity for industrial analysis has followed domestic manufacturing into steady atrophy. The most notable blow came with our dissolution of the Bureau of Mines in 1996, though USGS retained a strong bench of researchers. Other capabilities remain dispersed across many agencies, to varying degrees of effectiveness.

The 2010 rare-earths crisis revived federal interest in strategic minerals and materials analysis, with incremental improvements over successive administrations that left us with the statutory list-making activities we have today. But while the current Trump Administration has noticeably improved interagency coordination for project financing, I saw nothing but devastation to the corresponding infrastructure for strategic analysis and planning.

**One final note — the Defense Logistics Agency (DLA) is required by the Strategic and Critical Materials Stock Piling Act of 1939 and its subsequent amendments to identify strategic materials, focusing on those insufficiently produced domestically to supply defense and commercial industrial needs in times of “national emergency.” This is a different lens than how we typically view critical minerals and materials, especially in a globalized world where America maintains integrated supply chains with its friends and allies. As the enabling legislation indicates, its utility lies in informing defense stockpiling activities. Nothing more.

Critical dilution

Our federal lists are fundamentally rooted in scientific analysis, even if methods are imperfect and open to criticism. While industry stakeholders are invited to submit comments informing agency assessments, decisions are supposed to be free of political influence.

I can’t attest the 2022 DOI list was squeaky clean, but it’s not a great sign when the nominated USGS Director publicly states his intention to add specific minerals to the 2025 list if confirmed. And then does it.

It’s also not really my place to challenge the USGS methodology or results, other than the decision to treat Canada as a supply threat (which contributed to the inclusion of potash, lead, and rhenium), but the final DOI list clearly includes at least a handful of political decisions.

USGS recommended two 2022 minerals, arsenic and tellurium for removal in 2025 and DOI overrode their analysis to preserve inclusion. We’ve become a net exporter of tellurium, for what it’s worth.

And then President Trump’s April 8 executive order “Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241” directed the Secretaries of Energy and Interior to consider adding metallurgical coal (i.e., coal for steelmaking) to their agencies’ respective lists. You’ll never guess what happened next.

We need to talk about coal

I saw DOE under Biden Administration adopt some pretty self-defeating postures to appease labor and other progressive interests, but it was nothing quite so outlandish as the lengths I saw DOE go in 2025 to pretend it could revive coal’s fortunes.

Look…it’s the Administration’s political prerogative, if counterproductive, to direct LPO to humor new coal plants nobody actually wants to build, push Congress to create new coal mining incentives to benefit donors, and enlist interns to spin up childish AI-generated images for social media posts. Though I personally would not advise telling Americans they’re getting coal for Christmas!

Improperly redirecting Congressionally-appropriated grant programs to coal projects, abusing emergency powers to force defunct plants online at ratepayer expense, and interfering with statutory analytical processes to pretend coal is a vital national interest are different matters entirely.

There’s no rational justification for adding met coal to the list. Full stop. All but a dozen blast furnaces in the US have closed as we’ve progressively converted steelmaking to arc furnace production, and now most of our met coal is exported. There’s no supply crunch today or forecasted. Moreover, giving it a 2.5% tax credit under 45X does nothing to incentivize new production or boost uneconomic assets. It’s just a handout to mine owners (not their workers or communities) from the American taxpayer.

I earnestly met with met coal mine owners last year to discuss LPO financing for capital investments, potentially to modernize their operations both at the mine site and with transportation infrastructure. That’s about improving sector competitiveness after decades of excessive orientation towards shareholders, creating tangible economic value and sustaining jobs for local communities…not empty signaling.

We can and should differentiate between areas for constructive federal investments and overriding priorities demanding additional support for supply chain security.

When everything is critical

We need increased emphasis on downstream materials, including commensurate focus on electrical steel, semiconductor substrates, radioisotopes, etc. as we currently maintain for mined minerals. Do we really care about manganese writ large? Or just the ore quality and processing capacity necessary to produce manganese sulfate or specific high-performance alloys? Because we have little reason for concern about the metal’s largest market, production of stainless steel.

On the other hand, we do need guardrails around a scope expansion to cover critical materials across every vital industrial sector. Since USGS currently lacks the capacity or expertise to run such an economy-wide analysis independently, and may defer to other agencies recommendations, we’d risk degraded and increasingly uneven standards for material selection. Also more avenues for lobbyists to weigh in.

We definitely do not want a ballooning list of strategic priorities driven by fear of exclusion. The larger these lists grow, the more it says about those not selected, and potentially impacts their ability to raise capital. Or at least that’s what they’ll argue in appealing for inclusion.

I’ll talk more about federal “endorsements” of projects or categories when I cover financing in subsequent posts, but certainly we must be smarter about distinguishing between signaling and actually directing finite resources to risk mitigation.

Strategic considerations

Here are some final questions and thoughts to close out this post:

1. Do we really consider over-reliance on allied supplies problematic? When asked by my LPO leadership last year why the agency should be financing potash projects, beyond “because it supports US industry” and “because we can, per statute,” I offered up trade leverage vis-a-vis Canada as a secondary justification. That doesn’t mean treating Canada, arguably our strongest and most durable ally, as a threat. But potash is one of eight minerals for which USGS identified Canada as the “restricting country” for its criticality analysis. If we’re setting priorities on the premise every friend is a potential adversary, we’re creating an impossible task for ourselves.

2. How do we (re)build the bureaucratic capacity to properly assess threats? America was already inadequately equipped for the sort of expansive industrial analysis this moment demands. Then came DOGE. I had a front-row seat to the chaos within DOE, where we quickly learned there was effectively no transition planning between administrations. Mass firings, including many agency experts on minerals and manufacturing, came so swiftly that we even had some DOE political appointees and career holdovers at the National Security Council (NSC) racing to identify key critical minerals personnel to protect from DOGE. Many took Elon Musk’s “fork” buyout anyways. As I said, it’s generational damage, and future success will depend on figuring out how to restore and expand capabilities. Outsourcing analytical products to McKinsey or BCG isn’t a solution…neither is pretending AI is a perfect substitute for headcount.

3. Is this strictly about financial incentives and market signals? The Trump Administration’s decision to keep minerals on the DOI list that USGS recommended for removal raises questions about what conditions, if any, would warrant removal. If our primary concern is threat mitigation, long-term success measures would include shrinking the list. If we’re just trying to throw a bone to every asset owner or investor in the sector, then there are blunter instruments you can use to support mining projects with far less bureaucratic effort.

4. How do we better insulate industrial analysis from partisan swings? Even if it’s bad policy to prioritize fossil fuels over renewables and electrification, sustaining legacy industry supply chains is an important and completely legitimate presidential priority. But try running a keyword search on “electric vehicles,” “solar,” or “renewables” in the 2025 USGS analysis, and it’s blatantly obvious those technology areas were - at minimum - censored from public-facing reports. I’m concerned they were descoped from the analysis entirely. The Trump Administration is certainly pretending these critical technologies areas are irrelevant despite needing their demand pull for at least a dozen minerals of importance to defense, AI, and other priorities that don’t offer remotely adequate consumption scale. It’s cutting off our nose to spite our face.

And with that, see you next week. I’ll start tackling barriers to project delivery, real and perceived.

But after three years at the Department of Energy’s (DOE) Loan Programs Office (LPO), much of it spent leading the office’s work in metals and mining, I believe the insights I’ve developed are worth sharing while I have some time on my hands to think and write.1

I hope you’ll agree.

So without further ado…welcome to Tailings: Lessons from the frontlines of America’s quest for minerals security.

For those readers less familiar with the mining sector, tailings are effectively the leftovers once the more valuable parts of an ore are extracted and processed. Typically dumped into a pile, or sometimes used to dam retention ponds at the mine site, they’re a necessary, if sometimes problematic form of waste disposal. Tailings aren’t always worthless, but often require new processing technologies, market conditions, security imperatives warranting subsidies, or all of the above to justify extracting additional materials from them.

Many of the “critical minerals” as designated by the US federal government and its counterparts around the world commonly end up in the tailings of primary base or precious metals mines. Think iron, gold, copper, or bauxite (alumina). While waste streams are attractive targets for speculators and policymakers seeking a readily attainable source of specific metals, few will ever produce anything worth recovering.

I felt it was a fitting name as I try to extract and synthesize lessons from my past three years leading this work for what was the sector’s premier US federal financing entity.

I’ve maintained a separate blog on my personal website since 2018, mostly for transportation-related musings. Tailings isn’t meant to replace that. It’s a limited series of posts I’ll publish over the next couple of months, covering a variety of topics related to critical minerals. Expect to see a mix of policy, finance, and technical content, mixing in relevant observations from my time serving in both the Biden and Trump administrations.

*Record scratch*

When I joined LPO, I had no relevant geology, engineering, or project finance experience.2 I was recruited primarily for my electric vehicle subject matter expertise, and expected most of my work would center on manufacturing and deployment of those commercial products. But I also joined with a core conviction that America needed to reinvest in its manufacturing capabilities to both shore up a fading industrial middle class and remain globally competitive against China in the 21st Century. And that conviction would lead me down an entirely unexpected path.

Just a couple weeks into my tenure, Bank of Montreal (BMO) was trying to get someone from LPO to meet with project developers and financiers at their 2023 Global Metals and Mining Conference in Hollywood, FL. That year the conference had been rebranded to “Metals, Mining, and Critical Minerals,” reflecting heightened financing interest for battery metals, rare-earth elements, and other previously lower-priority materials. Much of that was the result of President Biden’s twin legislative achievements, the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA), which added the first-ever tax credits for these projects, as well as billions of dollars in grants and lending authority through DOE, the Department of Defense (DOD), and other financing agencies.

I raised my hand, got a crash course in LPO’s financing authorities and mining project development, and flew to Florida for the conference. Thirty-five meetings with developers, investors, and other industry stakeholders in three days felt like a baptism by fire. Or a perfect start.

By the time I left nearly three years later, I’d reviewed hundreds of projects in the US and globally. From mines and processing facilities to battery and magnet manufacturing plants. From companies modernizing legacy facilities to those planning greenfield gigafactories. From mature manufacturers and venture-backed startups to mineral wildcatters. And spanning the spectrum from deeply serious to…downright clownish.

I saw it all. And I had plenty of help along the way, both inside and outside government. I wasn’t alone on the critical minerals beat within LPO, especially at the outset, and leaned heavily on financial and technical experts across the agency to get smart quickly. The clock didn’t start when I joined in 2023, and I was fortunate to benefit from decades of prior work and institutional knowledge built up across DOE and other federal agencies. Those foundations allowed me to advance existing minerals projects, originate new ones, and reorient agency financing tools to better serve American industry.

I collaborated with automakers, other key manufacturers, financiers, and counterparts across at least half a dozen other agencies to inform strategy, and worked with political leadership across both administrations to effect it.

Why I am doing this

Tailings is the product of my observations and insights across the industrial supply chain from those three years at DOE. Take that for what it is.

Much of the outside commentary I’ve seen on LinkedIn, industry publications, conference panels, and in other venues since the start of 2025 has been misinformed at best, and in many cases self-serving. Companies, financiers, lobbyists, and other consultants have shied from speaking candidly about administration policies and “dealmaking” activities, either for fear of drawing ire or desire to receive favorable treatment themselves.

It’s groupthink masquerading as thought leadership. And that sort of echo chamber tends to produce terrible policy outcomes. I fell victim in 2023 to inflated expectations at the peak of a euphoric market, where speculative project announcements received too little scrutiny and industry forecasts assumed far too much. Fool me once…

I see much of the same dynamic repeating, just with a more interventionist administration less constrained by laws, ethics, or market principles. That doesn’t mean the approach won’t produce some positive results for the country, or isn’t an improvement in some respects over the status quo ante. I just see a dearth of honest analysis today, in what is effectively still a honeymoon phase for this policy paradigm.

I don’t have all the answers and concede my own blind spots, but hope I can constructively advance the conversation.

In the next entry, I’ll define critical minerals. Not the official definition, provided by the US Interior Department per Congressional directive, but rather how I view and segment the category of materials we’ve established as policy priorities.

A few quick housekeeping notes:

1. I’ll use specific project examples and policies where I can to illustrate broader market dynamics, but am limited in what I can share publicly. Most of what I discuss will be aggregated sector observations.

2. I deeply respect the career staff I worked with at LPO, across DOE, and my counterparts at other financing agencies. Nearly all have served across multiple administrations, and do so out of a genuine desire to do good for our country. Nothing I write should be interpreted as denigrating their efforts.

3. I’ve never been a fan of indulging political correctness, so I’ll continue to use the Department of Defense’s legal name until Congress changes it. There is no U.S. Department of War.

4. The Department of Energy began to execute a broad reorganization shortly after I left, which included a renaming of LPO to the “Energy Dominance Financing Office” (EDF). I will try to use LPO in retrospective contexts and EDF for forward-looking commentary, but just assume they’re interchangeable.

With that…Happy New Year, and thanks for coming along for the ride.