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The Trump administration is stepping back from its plan to guarantee minimum prices for essential U.S. mineral projects. This change appears to acknowledge the lack of funding from Congress and the difficulties involved in determining market prices, according to multiple sources.
This decision comes as a U.S. Senate committee looks at the price floor extended last year to MP Materials. It’s a notable shift from earlier commitments to the industry and could differentiate Washington from G7 partners, who are exploring joint price support mechanisms to enhance production of crucial minerals needed for electric vehicles, semiconductors, defense systems, and consumer electronics.
During a recent private meeting hosted by a Washington think tank, two senior officials from the Trump administration told U.S. mineral executives that they would need to demonstrate financial independence from government price support. One of the attendees reported that Audrey Robertson, assistant secretary at the U.S. Department of Energy, conveyed a clear message: “We are not here to cheer you up. Don’t come to us expecting that.”
This alteration will influence future agreements but won’t impact the already agreed-upon floor price for MP Materials set as part of a government investment package from July of the previous year.
Robertson was accompanied by Joshua Clune, assistant secretary for critical minerals and consumer goods at the U.S. Department of Commerce. During their discussion, they informed attendees that the government could no longer guarantee a price floor.
Clune and Robertson did not respond to inquiries for comments.
This latest stance contrasts with a closed meeting held last July, where officials indicated that the floor price for MP Materials was not a one-time arrangement and that other projects might receive similar support.
Since then, the administration has taken stock positions in companies like Lithium Americas, Trilogy Metals, and USA Rare Earths, but failed to provide any price floor, raising doubts about the government’s commitment to this financial mechanism.
U.S. mining and processing firms have been advocating for price floors and other government supports to enhance their competitive stance against China. Industry leaders argue that government-backed Chinese producers can artificially lower prices, harming rivals and deterring private investments.
While the White House has not disclosed intentions for a new price floor, it mentioned ongoing efforts in deregulation, tax cuts, and targeted investments in priority sectors while maintaining accountability to taxpayers.
Critics of price floors caution that they might expose U.S. taxpayers to considerable fiscal risks, forcing subsidies when market prices drop and potentially creating long-term debt if prices stay low.
Additionally, legal experts express concerns that minimum price guarantees could face scrutiny under U.S. laws related to procurement and trade, especially if viewed as market distortions or lacking clear Congressional backing.
Even without a price floor, the government might still take other actions to bolster mineral projects and stabilize prices, like stockpiling and equity investments.
Countries like Australia are also contemplating price floors for critical minerals.
An agreement among members of the Diet that attracts attention
Concerns arose among some officials and lawmakers regarding the funding for a price floor of at least $110 per kilogram for two kinds of rare earths following the investment in MP Materials. Sources familiar with the matter report this.
The dynamics of the mineral market have shifted since the investment in MP Materials; for instance, US Rare Earths Inc. recently announced plans to purchase similar rare earths from the open market at $125 per kilogram.
The investment in MP Materials included a guaranteed purchase agreement, leading to confusion over whether the U.S. government would provide similar price guarantees for other countries.
Sources indicate that the Trump administration looked into other equity investment opportunities after discussions with lawmakers, only to realize it lacked the necessary Congressional authority to implement a price floor.
This realization was partly triggered by an inquiry from the Senate Armed Services Committee, which probed why MP Materials was receiving floor price support and the overall government strategy for mineral sector investments.
Committee staff confirmed the request for a meeting but did not offer additional comments. MP Materials did not respond to queries.
