:max_bytes(150000):strip_icc()/GettyImages-2223650914-d58c9da5ae664268a825da97e2351796.jpg "Another Obscure Mining Stock Soars as Trump Administration Takes Stake")
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Key Takeaways
- Shares of Trilogy Metals soared on Tuesday after the White House said it would take a stake in the minerals exploration company and support its efforts to extract critical minerals in an Alaskan mining project.
- The Trump administration has made equity investments in several mining companies this year as part of its efforts to support domestic production of resources that are critical to national security.
- The government’s stakes in mining companies mirror similar deals with U.S. semiconductor companies, which the Trump and Biden administrations have both sought to support.
Shares of Trilogy Metals (TMQ) skyrocketed on Tuesday after the Trump administration announced it would take a stake in the Canadian mining company, the latest in a string of government investments in industries deemed critical for national security.
The White House on Monday afternoon said it was investing $35.6 million in Trilogy Metals “to support mining exploration in Alaska’s Ambler Mining District.” The investment will give the federal government a 10% stake in the Vancouver-based miner.
President Donald Trump also ordered federal regulators to move forward with permitting the construction of a 211-mile road to the Ambler Mining District to “enable access to large deposits of copper, cobalt, gallium, germanium, and more.”
Why This Matters To Investors
The Trump administration this year has made several investments in public companies it deems critical to national security interests. Investors expect more deals to come, which could present an opportunity for investors confident they can preempt the White House.
Trilogy is one of several mining companies in which the federal government has taken a stake this year in an effort to shore up domestic supply of strategically significant resources. The White House last week said it would restructure an existing deal with Lithium Americas (LAC) to take a 5% stake in the company and a lithium mine it’s developing in Nevada. In July, the Department of Defense struck a deal to become the largest shareholder of rare earths miner MP Materials (MP).
Shares of Trilogy Metals jumped as much as 280% in early trading on Tuesday and were recently up 220%.
Why Another Mining Investment?
President Trump has taken an unconventional approach to industrial policy in his second term, dramatically expanding the government’s influence over business. On top of its stakes in mining companies, the federal government has taken a 10% stake in chipmaker Intel (INTC) and, in exchange for permission to sell advanced semiconductors to China, struck controversial revenue-sharing agreements with Nvidia (NVDA) and Advanced Micro Devices (AMD).
The administration’s focus on mining and semiconductors stems from heightened tensions with China. The world’s second-largest economy mines and processes the vast majority of the world’s rare earth minerals and magnets, which have a range of vital industrial and military applications. It also has a longstanding territorial dispute with Taiwan, home to Taiwan Semiconductor Manufacturing Co. (TSM), the world’s largest manufacturer of advanced semiconductors that enable artificial intelligence.
U.S. demand for rare earths is expected to surge over the next decade as households and businesses replace fossil fuels with renewable energy, the generation and storage of which often relies on rare earths. Rare earth minerals and magnets are also essential components of some U.S. weapons systems.
