Highlights
- Trump administration explores diverting $2 billion from CHIPS Act to critical minerals projects.
- The potential funding shift aims to centralize mineral strategy and boost U.S. mineral independence.
- Experts argue $2 billion is symbolic and insufficient to truly challenge China's dominance in mineral supply chains
Reuters reports (opens in a new tab) that the Trump administration is weighing a controversial plan to divert $2 billion from the CHIPS Act—originally earmarked for semiconductor research and factories—into critical minerals projects. The shift would expand Commerce Secretary Howard Lutnick’s influence over U.S. minerals strategy and centralize funding decisions that have until now been scattered across agencies.
Grounded in Reality
The accuracy here: Washington has already poured billions into rare earths and critical minerals through the Pentagon, DOE, and infrastructure law programs. Reuters cites real precedents, including the Pentagon’s recent investment in MP Materials and the DOE’s $1 billion proposal for minerals projects. These details check out. The linkage between semiconductor supply chains and critical minerals like gallium and germanium is also factual—China controls large portions of both, and they are indispensable for chipmaking.
Reading Between the Lines
The speculative leap is the $2 billion figure itself. Reuters notes discussions are ongoing and could change. The framing that Lutnick will “get the $2 billion out the door” quickly has shades of political spin from sources, not confirmed policy. Likewise, the notion of equity stakes in mining companies remains uncertain. We don’t yet know whether the funds would go to miners, processors, or recyclers—or how much could realistically be deployed before 2026 budgets reset.
Subtle Biases at Play
Reuters tells the story by emphasizing Trump’s skepticism of the CHIPS Act(“a horrible, horrible thing”) while presenting the reallocation as a kind of workaround. The portrayal may understate how much continuity exists: the Biden administration also explored using CHIPS-related funds for minerals but backed off for environmental and economic reasons. This continuity matters—the story risks overstating novelty in Trump’s approach while underexplaining bureaucratic complexity.
What It Means for Investors
If real, this move could inject capital into U.S. lithium refining, recycling, and rare earth processing projects—sectors often starved for funding. But if it stalls in Congress or gets tied up in legal battles, expectations could sour quickly. The biggest signal here is less about $2 billion today and more about Washington’s growing willingness to raid semiconductor budgets to shore up mineral independence. That mindset shift is the lasting takeaway.
The Rare Earth Exchanges Logic
From our vantage point, the fundamental reality is stark: $2 billion is a rounding error compared to what’s required. Without a long-term industrial policy and substantially larger funding commitments, the U.S. will not (A) catch up to China’s entrenched dominance in mining, processing, and magnet-making, nor (B) own the future of disruptive, downstream technologies built on rare earths and other critical minerals. To compete, Washington must think in decades and tens of billions, not election cycles and billions. Anything less is symbolic positioning, not structural change.
Verdict
The Reuters piece offers credible insight into early-stage policy thinking but drifts into conjecture when quoting unnamed officials about amounts and timing. Readers should treat this as a trial balloon floated by insiders, not confirmed government action. At least this is the case till we receive more validation from the government.
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I would suggest that President Trump take a keen interest in Windy Craggy. It is North America’s largest undeveloped cobalt – copper (gallium ??) deposit that could be developed as a national strategic supply chain and would invoke a USA cobalt refining priority. This deposit rivals those in the DRC.
I would be willing to help…..