The U.S. administration has moved away from plans to set guaranteed minimum prices for domestic critical minerals projects, several people who attended internal briefings told sources familiar with the discussions. The decision reflects an acknowledgment of constrained congressional funding and the challenges of establishing floor pricing in market-driven commodity sectors.
At a private forum held earlier this month by a Washington think tank, two senior administration officials told executives from the minerals industry that the government would not provide ongoing price support for their projects and that companies should be prepared to demonstrate financial viability without such government intervention.
"We re not here to prop you guys up," Audrey Robertson, assistant secretary at the U.S. Department of Energy and head of its Office of Critical Minerals and Energy Innovation, told the assembled executives, according to attendees. Robertson spoke alongside Joshua Kroon, deputy assistant secretary for textiles, consumer goods, materials, critical minerals and metals at the Department of Commerce International Trade Administration. Both indicated the administration is no longer in a position to issue price floors.
Requests for comment from Kroon and Robertson went unanswered.
The administration s current posture stands in contrast to remarks conveyed at a closed-door meeting last July. At that event, two separate administration officials told minerals executives that a price floor extended to MP Materials days earlier was "not a one-off" and indicated the government was working on similar supports for other projects. Since then, the administration has taken equity stakes in a range of companies, including Lithium Americas, Trilogy Metals and USA Rare Earth, among others, yet none of those investments came with price guarantees, raising questions about the continuity of price-floor commitments.
U.S. mining and processing companies have lobbied for price floors and other government backstops to help them compete with Chinese producers, who industry executives say can rely on state-backed capacity to reduce prices strategically and pressure private rivals. Supporters of government price guarantees argue these measures could shield nascent domestic supply chains and encourage private capital to invest in upstream projects used in electric vehicles, semiconductors, defense systems and consumer electronics.
However, critics caution that price floors could impose substantial financial exposure on U.S. taxpayers if the government becomes obligated to subsidize minerals when market prices fall. Legal analysts also warn that guaranteeing minimum prices could conflict with U.S. procurement, trade and budget statutes, particularly if such measures are viewed as market distortion or lack explicit authorization from Congress.
The MP Materials investment is receiving particular scrutiny. Some administration officials and members of Congress reportedly questioned whether funding a price floor of at least $110 per kilogram for two types of rare earths had been authorized by Congress. That scrutiny contributed to a reassessment of the government s authority to underwrite price guarantees.
Market dynamics since the MP Materials arrangement have also evolved. Company statements indicate USA Rare Earth expressed willingness this week to purchase those same rare earth types on the open market for $125 per kilogram, illustrating shifting price conditions that complicate any long-term floor commitments.
As the administration evaluated further potential equity investments after MP Materials, officials concluded they did not possess the congressional mandate to fund price floors broadly. That realization was in part shaped by inquiries from lawmakers. Staff from the Senate Armed Services Committee asked Pentagon officials last year to meet and explain why MP Materials had received price floor support and to outline the administration s overall strategy for mineral sector investments. A committee staffer confirmed the meeting request but declined additional comment. MP Materials did not respond to a request for comment.
Despite retreating from price floors, the administration has made clear it will continue to pursue other policy tools intended to strengthen domestic mineral capacity. A White House spokesperson said the government will press forward with deregulation, tax cuts and targeted investments in the high-priority sector "while being good stewards of taxpayer dollars." The statement did not confirm plans to issue new price floors.
Officials and legal experts note that moving away from guaranteed minimum prices does not preclude a range of alternative measures that could bolster projects or serve to stabilize prices. Those options include strategic stockpiling of critical minerals, selective equity investments in domestic producers and local content stipulations tied to public support. Other nations, including Australia, have also entertained the idea of price floors for critical minerals, though the administration s current stance will distinguish U.S. policy from any G7-level discussions about coordinated price support or related interventions.
Summary
Senior U.S. officials recently informed mineral industry executives that the administration is discontinuing plans to provide guaranteed price floors for critical minerals projects. The shift stems from a recognition of limited congressional funding authority and legal complications in setting such price supports. Although the government has taken equity positions in several mining companies, those investments did not include price guarantees. Policymakers retain other tools to support domestic production, such as stockpiling and targeted investments, but the explicit commitment to minimum prices now appears to be off the table.
Key points
- Senior administration officials told industry executives that Washington will not provide price floors and that projects must show financial independence - impacting mining, processing and downstream manufacturing sectors.
- The administration s posture diverges from prior private assurances following a price floor extended to MP Materials; subsequent equity investments in miners did not include price guarantees, raising uncertainty about the use of price floors as a policy tool.
- Alternatives to price floors remain on the table, including stockpiling, equity stakes and local content requirements, which could influence supply chain strategies in EVs, semiconductors and defense procurement.
Risks and uncertainties
- Legal and budgetary constraints - Guaranteeing minimum prices could face challenges under U.S. procurement, trade and budget laws and may lack explicit congressional authorization, creating legal risk for such programs.
- Fiscal exposure for taxpayers - Price floors could oblige the government to subsidize mineral purchases if market prices fall, potentially creating long-term financial liabilities that affect public finances.
- Market and policy uncertainty - The absence of a clear, consistent U.S. policy on price supports may weigh on investment decisions across mining and processing sectors and complicate planning for downstream manufacturers.