Yesterday, I outlined that the Trump administration is taking a three-pronged approach to the domestic production of critical minerals. By way of quick review, that approach is:
- Designating the domestic production of critical minerals as a matter of national security, thereby bypassing legislative bottlenecks.
- Aggressively cutting regulations via Executive Order.
- Aligning public capital/debt with the private sector, via the Office of Strategic Capital (OSC), thereby providing an implicit federal backstop to industries that had previously been considered risky.
To be clear, these policies are not political posturing. The Department of War has been tasked with deploying $200 BILLION in capital over the span of three years, much of it focused on critical minerals.
This process is already underway. As I noted yesterday, the Trump administration unveiled EIGHT critical minerals deals last week, many of them utilizing this new hybrid (public/private) deal structure.
Out of these deals, one caught my attention.
For one thing, it’s backed by one of the most successful executives in mining history. And he just paired his own capital with that of the Department of War (DoW) for a $400 million conditional loan commitment to develop what Australian Resources Minister Madeleine King claims will be the “world’s largest and highest-grade known scandium resource.”
Why does this matter?
Scandium is a critical mineral used in the development of what policymakers call “exquisite technology” in aerospace and defense. Case in point, the company in question has already signed a deal to sell 25% of its scandium to Lockheed Martin during the first five years of the future mine.
Yes, the demand for scandium is so important that Lockheed Martin is already signing deals to claim production from a mine that hasn’t even been built yet.
Why?
No primary mine-source scandium supply exists anywhere in the world right now. It’s only ever recovered as a byproduct of other mining. Depending on the source of the information, foreign competitors control roughly 80% of global scandium mining and nearly 100% of processing. Moreover, as Crux Investor notes, there is a nearly 70-TONNE gap between projected 2026 demand for this critical mineral and its available supply.
Put simply, scandium is in high demand, with much of its production and processing in the hands of countries that are not friendly to U.S. interests. Small wonder then that the Trump administration is aggressively allocating capital to this critical mineral in order to secure its production.
Scandium is just one critical mineral in the matrix of national security, public/ private capital allocation, and domestic mining efforts. With the DoW scheduled to allocate $200 BILLION over the next 36 months, there are literal fortunes to be made with the right investments.
Again, the Trump administration is providing an implicit federal backstop to critical minerals miners that are U.S.-friendly. The smallcap company I mentioned earlier in this article jumped 29% in a single day based on the announcement of an OSC deal.
We will be detailing this company and four other critical minerals plays with close ties to the Trump administration’s agenda in a new Special Investment Report that will be going out shortly.
To reserve your copy, join our daily market commentary, Gains Pains & Capital to make sure your account is ready to go once we publish it late this week.
Graham Summers, MBA
Chief Market Stragtegist
Phoenix Capital Research
