Welcome back to CMJ,
20-second highlights:
The Pentagon’s ‘Deal Team Six’ is increasingly looking like the permanent operating system for U.S. critical-minerals procurement, with price floors and equity stakes hardening into a parallel demand curve.
The Trump–Xi summit closed without a rare earth deal. China’s leverage on heavy rare earths survived the summit intact, and the trade truce that expires in autumn now feels more like a ‘ceiling’ than a floor.
Copper near US$14,000 with three simultaneous supply shocks (China’s sulfuric acid ban, the Codelco audit scandal, and the Cameco ‘logistics break’) appears to validate structural-deficit theses roughly three years ahead of the Goldman/S&P consensus timeline.
Lynas confirming first commercial samarium production, in Malaysia rather than Texas, suggests the geography of heavy rare earth separation outside China is being decided by waste-licensing regimes, not by U.S. industrial policy.
Lithium carbonate at CNY 195,000/t, a near three-year high, alongside Elevra’s A$441 million Quebec financing with Canada Growth Fund as anchor, signals that allied sovereigns are now operating as anchor investors across all four commodities in scope, not just rare earths.
The Pentagon as permanent market maker
U.S. critical minerals policy is behaving like a standing institution: its own balance sheet, its own pricing mechanism, and its own multi-year mandate.
Deal Team Six: what the numbers confirm
The ‘Deal Team Six’ is a unit inside the Pentagon (formally the Economic Defense Unit), reporting to the Deputy Secretary of Defense and run by former Wall Street operators. The name apparently comes as a kind reference to the Navy’s elite special missions unit, the Seal Team Six.
As reported, their financing capacity is ~U$200 billion over three years, having committed deals made to date, including:
US$400 million equity stake in MP Materials
US$620 million conditional loan to Vulcan Elements
US$96 million binding letter of intent with Lynas
US$2.8 billion involvement in USAR-Serra Verde transaction
Pete Hegseth, the U.S. Secretary of War, has publicly described the unit as a permanent feature of defense procurement, not a one-cycle initiative.
Tactically, it sounds like a private equity book: equity, concessional debt, purchase commitments, and price floors. But strategically, it feels different: a parallel (and often unpredictable) demand curve for non-Chinese mineral supply, with the U.S. government as anchor buyer.
A BMO Global Commodities Research note circulated put the running total of Trump-administration critical mineral commitments at ~US$18.6 billion across 60 projects, divided at:
~US$15.9 billion in loans
~US$2.1 billion in equity
~US$615 million in grants
It does match CMJ’s tracking, and its volume is material.
One thing worth noting is the distribution of those resources inside the critical minerals basket: Rare earths are absorbing a share of that capital that looks disproportionate against the underlying market size (of course, this is a strategic decision based on total economic/security impact, but anyways).
The USGS Mineral Commodity Summaries 2026 puts global rare earth oxide production at 390,000 tonnes in 2024, with U.S. imports of rare earth compounds and metals totaling US$165 million in 2025. By comparison, U.S. domestic copper production alone was valued at US$11 billion in 2025, and the global copper market is several multiples of that.
Again, market size is the wrong measurement, though.
The IEA’s Global Critical Minerals Outlook 2025 frames it differently: for 19 of the 20 strategic minerals it tracks, China is the leading refiner, with an average market share of around 70%, and 15 of the 20 have shown greater price volatility than oil. The IEA’s own framing is direct: “market sizes may be small for some, disruptions could have outsized economic impacts.”
The logic that governs strategic petroleum reserves applies here. Disruption impact is not a function of market size.
The May 2026 World Economic Forum and Columbia SIPA report (Making Critical Minerals Bankable) explains why rare earths in particular attract this specific class of instrument: “in highly concentrated markets such as rare earths, new entrants may need stronger demand anchors and revenue support to compete with incumbent suppliers”.
Price floors and offtake commitments (the instruments Deal Team Six has been deploying) appear to be the fit-for-purpose response to that barrier profile.
Mapping all of this together, the apparent asymmetry in U.S. capital allocation appears to be in the minerals the Pentagon has not yet reached.
As China extends its licensing apparatus to tungsten, antimony, gallium, and germanium (all already in the export-control catalogue since 2023–2025 and not yet fully activated). The playbook you already know will likely repeat: price floor, offtake, and equity stake in allied producers.
Investors waiting for the federal announcement will be late to the trade.
Allied price-floor convergence
The Lynas–DoW letter of intent set a US$110/kg floor for neodymium-praseodymium oxide. The earlier MP–DoW package set the same number. The Japan Australia Rare Earths (JARE) renewed offtake with Lynas, running through 2038, includes the same US$110/kg floor.
Three buyers, two governments, one number.
That is not coincidental: once imposed, price floors act as a strong center of gravity, and seeing allies coordinating the same price regime for the most policy-sensitive segment of the critical minerals is like two black holes colliding (and you already know, if you are under its gravitational pull…).
The price floor is not a subsidy in the traditional sense. It closely resembles a put option written by the State, with the strike set high enough to keep allied production economically viable through a Chinese price war. Beijing crushed Western rare earth producers twice in the past fifteen years by flooding the market. The floor is designed to prevent it from happening a third time. And we already saw its positive results for MP.
On 14 May, the DOE’s Office of Critical Minerals and Energy Innovation opened public consultation on instruments to mobilize private capital alongside federal capital. This is the operational layer below the Pentagon’s equity stakes and price floors, and it suggests the administration is preparing a vehicle for institutional capital to sit alongside the Pentagon in critical minerals equity.
Whether that takes the form of a publicly listed trust, a regulated co-investment fund, or something more exotic remains open, the direction toward private co-investment alongside the Pentagon does not.
What CW19 briefing called the ‘willingness to engineer commercial conditions’ now has a named unit, a balance sheet, a stated mandate, and a duration framed explicitly as permanent.
That is a different beast from a discretionary grant program.
Pricing or considering it as a single-administration initiative may be mis-calibrating the duration by a decade.
The same logic frames the KAP Minerals–Hanwa MOU signed on 14 May, in which the Japanese trading house agreed to offtake phosphate and rare earth concentrate from a northern Ontario project.
Individually, it is a small deal, but a meaningful data point in the critical minerals map/pattern: Japanese trading houses systematically anchoring allied juniors with offtake roughly eighteen months before equivalent U.S. federal engagement materializes.
Japan has been running its own version of allied industrial policy for fifteen years, and the Hanwa, Mitsui, and Sumitomo offtake footprint is in many ways a more reliable filter for commercial viability than the U.S. federal grant list.
The truce as theater
The Trump–Xi summit in Beijing produced warm rhetoric, an agreement labeled ‘strategic stability,’ and almost no operational concessions on critical minerals. But the absence/void is the story.
The Trade War went Silent: What did not happen in China
Rare earth exports from China remain ~50% below pre-restriction levels, based on multiple post-summit assessments. China’s October 2025 licensing regime on seven heavy rare earths is intact.
And the extraterritorial extension of that regime (which would bring foreign-made products containing Chinese-origin materials under Chinese export licensing) is paused until November 2026, not withdrawn. No critical minerals agreement was signed.
The summit produced a Boeing order, a contingent green light on Nvidia H200 sales (with no chips yet delivered), and a multi-year document Xinhua described as a three-year ‘strategic-stability’ window. That is it.
The trade truce, sealed in October 2025, which lowered tariffs to 30% and 10% on U.S. and Chinese goods, respectively, expires this autumn. For minerals, the summit extended the ‘status quo’.
The market spent the first week of May pricing in a rare earth breakthrough. Equities tied to Chinese supply normalization rallied. Magnet-related auto-supply costs were priced as if the squeeze was temporary.
What the summit confirmed is that China has no operational reason to give up leverage that worked precisely as designed during the April and October 2025 escalations.
And for when the trade truce expires in autumn, the U.S. will return to the negotiating table without having materially changed (in the short-term) the dependency that gave China its leverage in the first place.
No agreement to unwind China’s existing licensing regime (a.k.a. export control) emerged from the summit.
That solidifies a two-tier market: Chinese material is priced in China, while allied material is priced under the Pentagon/JARE floor, and the gap between them becomes the new normal.
This duality needs to be accounted for.
The impacts of the expiry of the truce on November 10, 2026, without a deal, could be catastrophic (and similar to what we saw last year, with actual facilities being stopped due to a lack of material). The truth is that there will not be enough permanent magnets for all industries and for all countries.
Lynas and where heavy rare earth separation actually happens
On 14 May, Lynas confirmed first commercial samarium oxide production at its Kuantan facility in Malaysia. Combined with existing dysprosium and terbium output, that makes Lynas Malaysia the only commercial producer of separated heavy rare earths outside China.
The Texas heavy rare earth separation facility at Seadrift (which had received ~US$258 million in DoW grants) appears to have been shelved.
The cited reason is wastewater treatment economics. The Pentagon has redirected its Lynas financing toward a four-year offtake from existing operations, not new U.S.-based capacity.
The geography of heavy rare earth separation outside China appears to be decided by waste-licensing regimes, not by capital and not by U.S. industrial policy.
The U.S. has funded the projects. Permitting them at scale is a different problem, and one that capital cannot solve.
The heavies’ separation map for the next decade likely runs through Malaysia, Vietnam, South Korea, and possibly Australia, but probably not the United States.
Structural deficit, arriving early
Copper, uranium, and lithium each produced supply shocks over the past few days. Taken together, they suggest the structural-deficit theses widely projected for 2029 and beyond are arriving roughly three years ahead of consensus.
Copper: record prices, three simultaneous catalysts
LME copper traded above US$14,000 a tonne on 12 May, within ~3% of its January record. Not substantial, physical tightness drove the move.
What is material now, and should concern all Copper players, is China’s ban on industrial sulfuric acid exports, which took effect May 1st, hitting Chile (the world’s largest copper producer) directly.
China’s sulfuric acid export ban, combined with Hormuz-related seaborne sulfur disruption, generated a structural shock that the global acid market has not seen since 2008. Consequently, that has done more to tighten copper smelting economics this quarter than any individual mine disruption.
Bear in mind that ~20% of Chilean copper output depends on acid-intensive heap-leach SX-EW processing, and Chile sources ~37% of its sulfuric acid from China.
Critical minerals’ supply chains can fail at the midstream chemical layer without any geological or political event in primary mining jurisdictions.
Sometimes it’s easy to assume the ‘value chain is working’ (and will continue to do so forever). Unfortunately, investors and market analysts modeling supply risk only at the mine level missed the chokepoint that mattered most in the past 30 days.
The Codelco audit scandal compounded the picture:
A preliminary internal audit found Chile’s state copper producer may have overstated December 2025 output by ~20,000 tonnes, with senior management bypassing internal controls.
The ~20,000 tonne discrepancy is small relative to global production. What matters is the context: Codelco produces ~25% of Chilean copper, which is ~25% of global supply.
If the new Kast administration accelerates governance overhaul or royalty reform in response, the marginal tonne lost to Codelco disruption migrates to privately owned majors.
At record prices, that redistribution carries real relative-valuation implications for state-owned versus listed copper producers.
Combined with the concealment of safety data tied to the El Teniente accident, the credibility of the world’s largest copper producer is undermined.
Note: Chilean January 2026 output fell 47% from December; March was down another 10%.
On 14 May, Appian Capital Advisory closed its acquisition of a 95% stake in the Omitiomire copper project in Namibia:
Resource: ~100 million tonnes at 0.51% copper, targeting 30,000 tonnes per year of cathode over a 15-year life with ~US$400 million in development capex.
Appian flagged two more copper acquisitions before year-end across South America, North Africa, and southeastern Europe.
This is what mid-cycle M&A looks like before the majors show up. The Anglo–Teck transaction absorbed most of the available tier-one copper assets in 2025. The next phase is private equity aggregating mid-tier assets in frontier-but-stable jurisdictions, on the view that majors will need to acquire them at the cycle’s peak.
As a reference, the Appian/Omitiomire deal is the third movement announced in Appian’s copper acquisition cycle this year, with two more flagged before year-end.
Anglo American and Glencore cannot easily move on sub-US$500 million development-stage copper in 2026: balance sheets are digesting the Teck integration, executive bandwidth is constrained, and board mandates are focused on capital returns. But Appian can.
The pattern (PE aggregating frontier-stable copper in the US$200–500 million development capex range) is historically the precursor to the M&A wave that follows commodity price records by 18–36 months. The buyers in that next wave will not be the same PE funds.
Uranium: logistics as a price variable
On 11 May, Cameco halted production at its Key Lake mill and reduced operations at McArthur River after the Smoothstone River Bridge collapse severed the primary supply route.
The Cigar Lake continues to operate.
Analysts estimated up to 1.5 million pounds of production at risk if the interruption extends for a month, which could be recoverable in a ‘rebalancing market’.
The source of the disruption is the point:
Context: McArthur River is one of the largest uranium mines in the world and the most credible Western alternative to Kazakh’s supply.
Cause: It went dark because of a bridge collapse, not geology, not policy. In a market where utilities are ~116 million pounds contracted against a ~150 million pound replacement need, logistics also has a pivotal role.
Any reader modeling Oklo, Natrium, Kairos, or TerraPower commercial deployments against a 2028–2030 timeline is implicitly assuming the HALEU supply curve catches the demand curve in time.
Yet, the Cameco disruption is a reminder that the physical supply chain for conventional uranium, let alone HALEU, has dependencies that do not appear in fuel-price models.
Execution (and maintenance) are key factors.
Lithium: the bottom is in
Battery-grade lithium carbonate in China traded above CNY 195,000/t (~US$27,000), its highest level in nearly three years.
On 12 May, Elevra Lithium announced a A$441 million (~US$437 million) financing package to expand its North American Lithium operation in Quebec and advance Moblan, with the Canada Growth Fund anchoring with a ~US$106 million convertible note.
The Elevra package is the lithium analog of the MP Materials structure: a Western sovereign anchor taking a convertible-debt position in a domestically located producer.
The 2023–2024 lithium glut, driven by Australian and Chinese capacity ramps, has been forcibly compressed by 18 months of price-driven shutdowns. With most idled projects facing at least two years of restart lead time, the deficit window is open.
SQM’s vice-president of Lithium guided that lithium prices should hover aroun US$15–18/kg during 2026. Today, the spot is ~US$27/kg, roughly 50–80% above that number.
At current prices, almost every project idled in the 2023–2024 downturn is re-economical.
The restart wave is inevitable; the question is whether it arrives before the deficit window closes. Two-plus years of restart lead time suggests the window is open for at least another 18 months. The floor thesis worked. Duration is now the key variable.
Questions we should all be asking
If the Pentagon’s procurement apparatus is institutionalized rather than cyclical, what is the right duration for a critical minerals investment thesis: three years (an electoral horizon) or ten-fifteen years (a separation plant’s capex cycle), and which existing producers are priced for the wrong one?
If heavy rare earth separation cannot be permitted in the United States but must sit in an allied jurisdiction, what is the strategic value of Vietnam, South Korea, and Australia to the Pentagon’s portfolio over the next three years, and how does that change the case for U.S.-listed names whose vertical-integration story assumes a domestic footprint?
Which critical minerals share rare earths’ degree of Chinese concentration but have received less than 5% of the federal capital flow per dollar of market value? Those are the candidates for the next re-rating wave, and the asymmetry favors them precisely because the consensus has not yet noticed.
If the structural deficit in copper, uranium, and lithium is arriving three years ahead of the Goldman/S&P consensus, at what point do integrated majors stop reflecting the anticipation and start pricing the saturation cycle of 2030 and beyond?
Thank you for reading this briefing and for being part of the CMJ community.
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