"Trump Weighs Using $2 Billion in CHIPS Act Funding for Critical Minerals"

" Trump Weighs Using $2 Billion in CHIPS Act Funding for Critical Minerals \r\n\r\nThe Trump administration is considering a plan to reallocate at least $2 billion from the CHIPS Act to fund critical minerals projects and boost Commerce Secretary Howard Lutnick\u2019s influence over the strategic sector, two sources familiar with the matter told\u00a0 Reuters .\r\n\r\nThe proposed move would take from funds already allocated by Congress for semiconductor research and chip factory construction, avoiding a fresh spending request as it seeks to reduce US dependence on China for critical minerals used widely in the electronics and defense industries.\r\n\r\nBoosting Lutnick\u2019s role over critical minerals financing would also help centralize the administration\u2019s approach to the sector, a push sought by White House officials after the\u00a0 rollout of the\u00a0Pentagon investment \u00a0in rare earths company MP Materials\u00a0last month sparked questions about the US government\u2019s minerals strategy, one source said.\r\n\r\nThe White House did not respond to requests for comment. Pentagon officials were not immediately available to comment. MP Materials declined to comment.\r\n\r\nThe Commerce Department oversees the $52.7 billion CHIPS Act, formally known as the CHIPS and Science Act. The act, signed into law by then-President Joe Biden in 2022, has provided funding so far for research while also seeking to lure chip production away from Asia and boost American domestic semiconductor production.\r\n\r\nBut since taking office in January, Trump has moved to change the CHIPS Act \u2013\u00a0legislation he has called\u00a0\u201ca horrible, horrible thing\u201d that amounts to a giveaway to companies \u2013 largely by renegotiating grants to chipmakers.\r\n\r\nRepurposing some funds for mining-related projects would align in part with the spirit of the CHIPS Act as the semiconductor industry requires abundant supplies of germanium, gallium and other critical minerals over which\u00a0 China has tightened its market control, \u00a0said the sources, who are not permitted to speak publicly about the deliberations.\r\n\r\n\u201cThe administration is creatively trying to find ways to fund the critical minerals sector,\u201d said the first source. The plans are under discussion and could change, the sources added.\r\n\r\nMining companies themselves could benefit, but also processing and recycling firms. Most of the minerals considered critical by the US government are not processed inside the country.\r\n\r\nKent Masters, CEO of North Carolina-based Albemarle, the world\u2019s largest producer of lithium for rechargeable batteries, told\u00a0 Reuters\u00a0 last month that the company\u2019s\u00a0stalled\u00a0 plans to build a US lithium refinery \u00a0are \u201cdifficult now without some type of government support or partnership.\u201d\r\n\r\nIt was not immediately clear if the Trump administration aimed to use the funds for grants or equity stakes in mining companies, but Lutnick aims to \u201cget the $2 billion out the door\u201d as soon as possible, the first source said, adding that the administration aims to find other funds to reallocate in the near future.\r\n\r\nA former US official said the Biden administration considered using CHIPS Act grants for rare earths but decided it was uneconomical, required many environmental exemptions and was best left for the Department of Energy to handle.\r\n\r\nThe administration is also looking to use CHIPS Act-related funding to\u00a0take equity stakes in Intel and other chip makers\u00a0in exchange for cash grants,\u00a0 Reuters\u00a0 reported on Tuesday.\r\n\r\nTrump moved quickly to expand US critical minerals production since taking office in January by signing executive orders to boost deep-sea mining and domestic projects.\r\n\r\nOn Tuesday he\u00a0 met\u00a0with the CEOs of Rio Tinto and BHP \u00a0at the White House despite the ongoing negotiations with European leaders over Russia\u2019s invasion of Ukraine, a move aimed at underscoring his support for US mining.\r\n\r\nThe CHIPS Act deliberations come after the Energy Department last week proposed $1 billion in spending for some critical minerals projects, with funds tied to the 2021 Bipartisan Infrastructure Law.\r\n Lutnick \r\nThe White House aims to give Lutnick a greater role over funding decisions for critical minerals by giving him oversight of the decision making process within the administration, the sources said.\r\n\r\nThe Pentagon\u2019s multibillion-dollar investment in MP Materials and its move to extend a price support mechanism \u2013 a deal negotiated by Deputy Defense Secretary Steve Feinberg \u2013 was seen by White House Chief of Staff Susie Wiles as uncoordinated as it\u00a0sparked confusion\u00a0over whether Washington would guarantee a price floor for all miners and forced the administration to clarify that it\u00a0does not intend\u00a0for MP to have a rare earths monopoly, the two sources said.\r\n\r\nMuch of the funding for MP\u2019s deal \u2013 including Washington\u2019s equity stake, loans and purchase agreements \u2013 still needs to be allocated by Congress.\r\n\r\nTwo weeks after the Pentagon announced its MP investment, administration officials rushed to meet at the White House with rare earths firms and their customers to\u00a0underscore broad support for the entire sector,\u00a0 Reuters\u00a0 reported.\r\n\r\nLutnick will now help coordinate the administration\u2019s funding decisions, taking the lead from the Pentagon and other agencies, the sources said.\r\n\r\nLutnick ran brokerage firm Cantor Fitzgerald before he joined Trump\u2019s cabinet. Cantor is a large shareholder in Critical Metals Corp, which\u00a0 Reuters\u00a0 reported in June\u00a0is under consideration for a loan from the US Export-Import Bank."

"Trump Weighs Using $2 Billion in CHIPS Act Funding for Critical Minerals"

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