The Trump administration is considering a plan to reallocate at least 2 billion dollars of the ACT chips to finance critical mineral projects and increase the influence of the Secretary of Commerce, Howard Lutnick, on the strategic sector, two sources familiar with the matter told Reuters.
The proposed measure would take funds already assigned by the Congress for semiconductor research and the construction of chips factories, avoiding a new expense request, while seeking to reduce the dependence of the United States in China in critical minerals widely used in electronic and defense industries.
Promoting the role of Lutnick in the financing of critical minerals would also help centralize the administration approach to the sector, an effort sought by White House officials after the investment of the Pentagon in the company of Rare Land MP Materials last month generated questions about the strategy of the US government in minerals, a source said.
The White House did not respond to requests for comments. Pentagon officials were not immediately available to comment. MP Materials declined to make statements.
You may be interested: Tiktok will disappear in the US without the approval of China on Sale Agreement: Lutnick
The Commerce Department supervises the 52.7 billion dollars of the ACT chips, formally known as Chips and Science Act. The Law, signed by the then President Joe Biden in 2022, has provided financing so far for investigation, in addition to seeking to attract the production of chips out of Asia and strengthen the national production of semiconductors in the United States.
However, since he assumed the position in January, Trump has sought to change the Act Chips – legislation that he has described as “something horrible, horrible” that is equivalent to a gift to companies – mainly renegotiating subsidies to chips manufacturers.
Redireting some funds towards mining -related projects would be partly aligned with the spirit of the Act Chips, since the semiconductor industry requires abundant supplies of Germanio, Gallic and other critical minerals on which China has reinforced its market control, the sources said, which are not authorized to speak publicly about deliberations.
“The administration is creatively looking for ways to finance the critical mineral sector,” said the first source. The plans are under discussion and could change, the sources added.
The mining companies themselves could benefit, as well as processing and recycling companies. Most minerals considered critical by the US government are not processed within the country.
You may like: semiconductor actions fall while the White House looks for actions for subsidies of the Chips Law
Kent Masters, CEO of Albemarle, based in North Carolina and the largest world -reloadable lithium producer, told Reuters last month that the company’s detained plans to build a lithium refinery in the US. UU. They are “difficult now without some kind of support or government association.”
It was not clear immediately if the Trump administration planned to use the funds for subsidies or shareholding participations in mining companies, but Lutnick seeks to “take out the 2 billion dollars as soon as possible,” said the first source, adding that the administration plans to find other funds to reallocate in the near future.
An former American official said that the Biden administration considered using subsidies of the Act Chips for rare earths, but decided that it was not profitable, required many environmental exemptions and it was better to be handled by the energy department.
Intel participations
The administration also analyzes using funds related to the ACT chips to take share participations in Intel and other chips manufacturers in exchange for cash subsidies, Reuters reported Tuesday.
Trump moved quickly to expand the production of Critical minerals from the USA since he assumed the position in January, signing executive orders to boost mining in deep water and national projects.
On Tuesday he met with the CEO of Rio Tinto and Bhpen the White House, despite the ongoing negotiations with European leaders about the invasion of Russia to Ukraine, a movement destined to underline their support for US mining.
Deliberations on ACT chips occur after the Department of Energy proposed last week an expense of 1 billion dollars for some critical mineral projects, with funds linked to the 2021 bipartisan infrastructure law.
The White House seeks to give Lutnick a more prominent role in critical mineral financing decisions, granting supervision on the decision -making process within the administration, the sources said.
The multimillion -dollar investment of the Pentagon in MP Materials and its decision to extend a price support mechanism – an agreement negotiated by the Undersecretary of Defense, Steve Feinberg – was seen by the head of the White House Cabinet, Susie Wiles, as disconnected, since it generated confusion about whether Washington would guarantee a minimum price for all miners and forced the administration to clarify that MP has a monopoly on rare earths, the two sources said.
You may be interested: EU considers participation in semiconductor companies that receive funds from the Chips Law
Much of the funds for the MP agreement – including the shareholding of Washington, loans and purchase contracts – must still be assigned by Congress.
Two weeks after the Pentagon announced its investment in MP, administration officials rushed to meet in the White House with rare earth companies and its clients to underline the broad support to the entire sector, Reuters reported.
Now Lutnick will help coordinate the administration’s financing decisions, taking the lead next to the Pentagon and other agencies, the sources said.
Lutnick directed the Cantor Fitzgerald brokerage firm before joining the Trump cabinet. Cantor is a great shareholder of Critical Metals Corp, which according to Reuters is under consideration for a loan from the US export and import bank.
With Reuters information
Inspy, discover and share. Follow us and find what you are looking for on our Instagram!
