MYworldfix

In a strategic move to secure vital resources, the United States is poised to establish a substantial $5 billion fund aimed at guaranteeing its supply of critical minerals. This initiative, developed in collaboration with the New York-based investment firm Orion Resource Partners, will see both entities initially committing at least $600 million, alongside contributions from other investors. This public-private partnership underscores a dedicated effort to align financial mechanisms with national mineral objectives, as highlighted by experts in the field. The overarching goal is to fortify domestic supply chains and lessen reliance on foreign, particularly Chinese, sources.

The U.S. International Development Finance Corporation (DFC) is central to this endeavor, leveraging its financial tools to support strategic international investments. Since its establishment during the previous administration, the DFC has deployed capital through various means, including loans, equity investments, and technical assistance, all geared towards diversifying global supply chains away from China's significant influence. Illustrative examples include a $150 million loan to Syrah Resources, a key graphite supplier to Tesla from Mozambique, and a $550 million investment to upgrade the Lobito Corridor rail line in central Africa, which is crucial for transporting copper and cobalt.

This partnership with Orion, which manages approximately $8 billion in assets and is a prominent financier in the mining sector, could represent the DFC's largest commitment to mining-related projects to date. Orion's previous collaborations, such as a $1.2 billion venture with Abu Dhabi's ADQ sovereign wealth fund, set a precedent for this new joint vehicle. The urgency driving this initiative stems from both immediate concerns about China's dominant role in processing critical minerals like copper and rare earths, and long-term forecasts predicting significant metal shortages due to declining ore grades and underinvestment. Consequently, the U.S. Department of Defense has initiated cobalt stockpiling and allocated $400 million to MP Materials to secure rare earth supplies.

The U.S. government's proactive approach extends beyond the DFC-Orion collaboration, involving multiple agencies in bolstering critical mineral security. For instance, the Export-Import Bank of the United States (EXIM) recently expressed interest in providing up to $67 million in financing for Sunrise Energy Metals' Syerston scandium project in Australia, recognized as one of the world's largest and highest-grade deposits. These concerted efforts demonstrate a firm commitment to ensuring a stable and diversified supply of critical minerals, essential for national security and economic resilience.