The United States is advancing a significant strategic initiative to enhance its access to critical minerals, which are vital for the nation's technological progress and energy transition.
Discussions are underway to establish a substantial $5 billion fund, a joint venture between the International Development Finance Corporation (DFC) and Orion Resource Partners, an investment firm managing approximately $8 billion in assets. This initiative aims to bolster American access to strategic materials such as copper, cobalt, and rare earth elements, which are indispensable for the clean energy sector, including electric vehicles, wind turbines, advanced electronics, and defense systems.
The urgency for this fund stems from growing concerns about supply chain vulnerabilities, with China currently dominating the processing of many critical minerals. Industry analysts project potential long-term shortages for several key metals due to insufficient investment, declining ore grades, and lengthy permitting processes, underscoring the need for proactive measures.
The proposed fund structure, with equal contributions from the DFC and Orion, could reach up to $5 billion, potentially marking the largest operation in the DFC's history. The DFC, established during Donald Trump's first term, has a history of supporting mining projects through loans and equity stakes, including a $150 million loan to Syrah Resources in Mozambique. Under the Biden administration, the DFC committed over $550 million to modernize the Lobito Corridor in Africa, a crucial route for transporting minerals from Central Africa's copper belt to Angola's Atlantic port.
Orion Resource Partners brings extensive experience in private equity, private credit, venture capital, and commodity trading within the mining sector. The firm has also partnered with Virtus Minerals to bid for Chemaf Resources, a copper-cobalt miner in the Democratic Republic of Congo, a region where U.S. and Chinese interests are increasingly competing. This move follows a previously blocked attempt by a Chinese state-owned firm to acquire Chemaf.
This strategic push is part of a broader national effort to strengthen supply security, build strategic reserves, and reduce reliance on China. The White House aims to leverage both public and private capital to ensure the stability and resilience of the critical minerals supply chain. Global demand for these minerals is projected to rise significantly, with clean energy technologies expected to drive a substantial portion of demand for copper, rare earth elements, nickel, cobalt, and lithium in the coming decades.
The U.S. government's focus on critical minerals is a bipartisan effort, acknowledging that these minerals are foundational elements for technological innovation, economic competitiveness, and national security in an increasingly interconnected world.