US critical minerals funding to withstand congressional shift, advisers say

Washington has been ramping up investment in US critical minerals, mining, processing and domestic manufacturing, and the momentum will likely continue under a Democratic-controlled Congress, with previously allocated funding and bipartisan concern over supply security supporting further deals, according to advisers at Clark Street Associates.

The firm, with offices in Silicon Valley and Washington DC, has secured over $5.4 billion in federal and state funding, grants, and contracts across its client portfolio, of which critical minerals are a key component.   

For mining and processing companies heading into 2027, the more immediate change could be greater scrutiny of how federal investments are selected, rather than a sharp reduction in government support, Clark Street CEO Steve Empedocles and senior vice-president VJ Sahi told MINING.COM in an interview.

Recent stockpiling activity illustrates the scale of federal involvement. The US Defense Logistics Agency last week committed $2 billion to acquire strategic and critical materials for the National Defense Stockpile throughout the fiscal year.   

“I think that’s an important thing that I don’t know that everybody understands, is that the change in Congress doesn’t change the money,” Empedocles said.

Empedocles and Sahi expect the administration to continue pursuing critical minerals investments using funding already available to it. Their assessment rests on both the scale of unspent resources and the strategic importance Washington places on reducing dependence on China.

“Defense industrial base resilience is important to both sides. Critical minerals are a key part of that,” Empedocles said.

Existing money supports outlook

Empedocles drew a distinction between Congress’s ability to shape future appropriations and the administration’s access to money provided through earlier legislation.

He argued that funding allocated through the administration’s reconciliation legislation gives it room to continue pursuing minerals deals even if a divided government makes new spending measures harder to secure.

That does not eliminate Congress’s influence, but it limits the immediate effect a leadership change could have on the investment pipeline, in his assessment.

Sahi pointed out that even if there isn’t another reconciliation bill, there’s still a lot of unspent dollars. 

“We often work to find the bipartisan messaging and bipartisan champions as much as possible,” Sahi said. “ And I do think that that’s important. “There may very well be a change in administration in two years, and I think that’s really the reason to be thinking aboutv bipartisanship to continue to have that support two years from now.” 

Empedocles and Sahi expect national-security concerns to sustain support for alternative mineral supplies, although individual transactions could attract political criticism.

“But fundamentally, Critical Minerals is important and I think it’ll be supported even through the next presidency,” Empedocles said.

More scrutiny of deals

Congressional oversight could bring closer examination of the administration’s investment decisions, including how recipients were chosen and how transactions were structured.

Empedocles does not expect that scrutiny to substantially weaken the near-term investment outlook.

“I think there will certainly be a demand for more transparency. I don’t think it’s going to impact further future investment, at least for the next couple of years,” he said. “I don’t know that it should change investor confidence in the space.” 

Sahi likewise expects oversight to focus largely on the administration’s decision-making. He pointed to the National Defense Authorization Act as an important vehicle for minerals-related policy and expects continued pressure to reduce reliance on Chinese sources.

For companies pursuing government support, the advisers also emphasized the importance of building bipartisan backing that can endure beyond a single administration.

Canada remains part of the supply chain

Despite political friction between Washington and Ottawa, both Empedocles and Sahi see a strong commercial rationale for continued cooperation between Canadian resource developers and US processors and manufacturers.

Canada’s mineral resources and demand across North America create opportunities for projects on both sides of the border, Sahi said. The location of refining and subsequent manufacturing investment remains an important question.

“The big gap right now is in the refining and the downstream processing,” he said.

Cross-border funding already has precedents. In May 2024, the US Department of Defense announced a combined $14.7 million in Defense Production Act Investment program awards to Canadian companies Fortune Minerals and Lomiko Metals, alongside Canadian government support for their projects. 

Empedocles also sees opportunities for Canadian technology companies in processing and recycling to use US funding to accelerate commercialization.

Such support can help businesses overcome the initial financing hurdle involved in bringing an innovative process into production, he said.

For the sector, his expectation is that the strategic case for those investments will survive the political transition.

“The administration has a lot of money available to do what the administration wants to do,” Empedocles said. “So regardless of what’s going on in Congress, there’s not much that’s going to change what President Trump wants to accomplish as it relates to critical minerals.”