As Washington Bets Billions on Mining, Scrutiny Grows Over Trump Family Ties

A rare earths connection

One of the clearest examples involves Vulcan Elements, a North Carolina-based rare earths magnet producer.

In 2025, the US Department of Defense announced a US$700 million financing package for Vulcan as part of a broader effort to develop domestic alternatives to Chinese rare earths supply chains.

The company subsequently became the subject of scrutiny after ProPublica reported that 1789 Capital, an investment firm associated with Donald Trump Jr., had taken an undisclosed stake in Vulcan approximately three months before the Pentagon announced the financing. According to ProPublica, the transaction was particularly notable because the Pentagon loan was reportedly linked to intervention from the White House.

“The call came from the White House: We have to get this done," a person familiar with the process said.

The reporting does not establish that Donald Trump Jr. influenced the Pentagon's decision or that the president directed the financing because of his son's investment. However, the overlap illustrates why the administration's expanding use of direct investment in strategic industries has attracted heightened attention.

Vulcan operates in a sector at the center of Trump's industrial strategy. Rare earth magnets are essential to a range of technologies, including defense systems, electric motors and advanced electronics, while China's dominance of the rare earths supply chain has become a major geopolitical concern for Washington.

The administration has increasingly treated the development of domestic mineral supply chains as a national security priority. August Reuters report notes that the Department of Energy is preparing US$500 million in grants for projects involving lithium, cobalt, and battery materials, including a US$100 million grant to Jervois for a US cobalt refinery.

The White House has also announced billions of dollars in mining and processing initiatives, including investments in rare earths, magnet technology and mining education.

For junior miners and critical minerals developers, the result is a dramatic change in the role of government.

Federal support is increasingly viewed not simply as a source of funding, but also as a potential catalyst capable of reducing project risk, attracting private capital and accelerating development.

The role of the government in the mining sector has been a hot topic at several mineral and raw materials conferences this year, with many analysts and market watchers noting that this type of partnership is needed to combat China’s dominance in the battery and technology metals segments.

During a panel focused on the impact of US midterm elections and geopolitics at Fastmarkets' Global Lithium, Battery & Critical Materials conference, held this past June, Ken Hoffman, founder and CEO of Traubenbach Associates, pointed to the industries the government has aided in the past.

“There would be no Tesla (NASDAQ:TSLA) if the government didn't bail it out, but we've bailed out the banking industry. We've bailed out the auto industry. We've done this for a long time,” he said. “The government does have a role.”

Gary Stanley, managing director of Global Mineral Strategies and a 41 year veteran of the US Department of Commerce, where he last led the Office of Critical Minerals and Metals, also acknowledged the unique position domestic supply chains are in. He commented:

“This is a form of sector‑specific state capitalism … As a free trader and as a dyed‑in‑the‑wool capitalist I’m not enthused about that, but we have an opponent who plays by none of the rules … whether it involves some degree of hybrid government intervention along with capitalistic capabilities, something has to be embraced … business as usual is not going to cut it."

A broader shift in the role of government

The critical minerals sector is becoming one of the most significant examples of this new approach.

The Trump administration has backed companies involved in lithium, cobalt, rare earths, magnets and battery recycling, while also considering policies such as price floors, government procurement agreements and equity investments.

Reuters reported in 2025 that critical minerals companies were rapidly expanding lobbying efforts in Washington as the federal government increased its willingness to provide direct financial support to mining and processing projects.

Companies have sought funding, permitting assistance and long-term government purchasing agreements, creating a more competitive environment for access to federal support.

For the resource sector, the implications extend beyond the Trump family's specific investments.

The administration's policies are fundamentally changing how mining projects are financed and developed in the US. Government backing can now influence everything from a project's cost of capital to its ability to secure private financing and negotiate offtake agreements.

Former government officials are also finding their way into the resource sector after leaving public service. In June, NovaRed Mining (CSE:NRED,OTCQB:NREDF) appointed Kristi Noem, former US secretary of homeland security, as a strategic advisor, citing her "extensive experience spanning economic development, infrastructure, energy, agriculture, national security, and public-private collaboration."

The pattern extends beyond Noem.

Ryan Zinke, Trump's first secretary of the interior, joined the board of US Gold (NASDAQ:USAU) in 2019 shortly after leaving government, an early example of the same revolving-door dynamic now playing out across the sector.

He currently serves as a US congressman representing Montana.

The relationship between government service and mining company access also runs the other way, through lobbying rather than board seats. David Bernhardt, who led the Department of the Interior during Trump's first term as president, now runs a lobbying firm staffed largely by former interior officials.

According to Public Citizen, a government watchdog group, the firm represents mining clients including Barrick Mining (TSX:ABX,NYSE:B), BHP (ASX:BHP,NYSE:BHP,LSE:BHP) and USA Rare Earth (NASDAQ:USAR) and made 33 visits to the Department of the Interior in 2025 alone.

Scrutiny of the Vulcan Elements deal, meanwhile, has moved into Congress.

House Democrats Jared Huffman and Robert Garcia have demanded documents from Vulcan identifying which 1789 Capital contacts were involved in the government's investment process, describing the deal as part of "a troubling pattern of opaque, multi-million-dollar deals with politically connected companies." Vulcan's leadership has pushed back on the implication, with the company's CEO stating he has never met Donald Trump Jr.

Resource investing enters new political era

For investors, the bigger story may be the transformation taking place in the resource sector itself.

Critical minerals are no longer simply a commodity investment theme driven by supply and demand. They have become an increasingly political asset class, shaped by industrial policy, national security concerns and competition with China.

The Trump administration's willingness to deploy loans, grants, government investments and strategic partnerships is creating new opportunities for mining and processing companies. But it is also creating new questions about who gains access to that support and how investment decisions are made.

For a sector accustomed to focusing on geology, commodity prices and project economics, political connections and government capital may now be becoming another factor investors cannot afford to ignore.