Trump considering sovereign wealth fund to invest in US miners, Interior Secretary says

US President Donald Trump is considering investments in domestic companies that mine and process critical minerals in an effort to reduce America’s reliance on imports, according to Interior Secretary Doug Burgum.

Speaking at a conference organized by the Hamm Institute for American Energy this week, Burgum said the Trump administration is exploring various investment strategies — including a sovereign wealth fund — to strengthen the US supply of critical minerals such as rare earths.

As first reported by CNBC, Burgum told the conference Wednesday the government should use its balance sheet to make investments and that the world’s largest economy should be able to have the biggest sovereign wealth fund.

However, such funds as held by Norway, Saudi Arabia and the United Arab Emirates are fed by strong resource-rich export surpluses, which the US doesn’t have federally. Washington runs persistent budget deficits rather than surpluses, and the country’s political and structural preferences favour private capital markets over state-owned investment funds. Still, some states such as Alaska, Texas, California and New York control large investment funds.

Burgum, who previously served as the governor of North Dakota, said a government fund would be able to repay companies that invest in approved projects if changing political winds in Washington rescinded support.

Dominant China

China is the top global producer of 30 of the 50 minerals that the US Geological Survey considers to be critical. For rare earths, which comprises a group of 17 elements, it has a near monopoly over the global supply chain, accounting for over 60% of the mine production and nearly all of the processing.

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The US, meanwhile, has limited domestic production and imported about 80% of the rare earths it used last year, with most of those coming from China.

Amid heightened trade conflicts between the world’s two biggest economies, China has weaponized its critical minerals dominance by imposing export restrictions on seven rare earths, highlighting the urgency for US to developing its own sources.

Fast-tracked projects

Last week, the White House identified 10 mining projects to be fast-tracked under the FAST-41 permitting initiative. These include projects covering copper, lithium and antimony in states such as Idaho, Arizona and Nevada.

On Wednesday, Burgum’s Interior Department announced that it will expedite the development of domestic energy resources and critical minerals. Under the new emergency permitting system, mine project approvals could be reduced from years down to just 28 days at most.

As part of its plan to boost domestic production of critical minerals, the Trump administration has also proposed to build metals refining facilities on Pentagon military bases as part of an executive order last month, Reuters previously reported.