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US Government Equity and Equity-Linked Investments in Critical Minerals – Mayer Brown
Federal equity and equity-linked instruments have become embedded in the sector’s financing architecture, with direct consequences for M&A structuring, capital formation, liability management, governance and exit planning.
The US government’s role in critical minerals has shifted materially. Executive actions, agency designations, and sustained public emphasis have framed critical minerals as essential to national security, defense readiness, grid resilience, job creation and advanced manufacturing. That policy posture is now reflected not only in regulation and procurement—but in capital formation. Federal capital deployment forms a significant component of a broader policy framework that also includes procurement authorities, strategic stockpiling, and regulatory initiatives aimed at strengthening critical-mineral supply chains.
Federal agencies are investing in the sector through an equity and equity-linked capital toolkit, which includes minority equity investments and other instruments that are convertible into or exchangeable for equity, commodity price support mechanisms, long-term offtake commitments, and strategic reserve initiatives. Public transactions such as the US Department of Defense’s partnership with MP Materials Corp. (“MP Materials”), together with other equity investments by the US International Development Finance Corporation (“DFC”) and the US Department of Commerce confirm that this is no longer theoretical. In particular, the reauthorization of DFC in the Fiscal Year 2026 National Defense Authorization Act established a $5 billion equity revolving fund, and increased DFC’s minority equity investment authority up to 40% ownership. At a Milken Institute panel in March 2026, DFC CEO Ben Black explained that these developments allow DFC “to play across the capital structure and be in risk positions [and] further incentivize private capital” and highlighted critical minerals and rare earths as priority sectors. The federal government’s equity and equity-linked capital toolkit is now integrated into the capital structure of the sector.
This is not an episodic intervention. It instead reflects a structural shift in how the federal government is managing supply-chain risk—and it has direct consequences for how mining and energy transactions are structured, financed and exited.
For sponsors, developers, and strategic investors, the relevant question is not whether the federal government will deploy capital. It is instead how the federal government’s participation reshapes capitalization, governance, risk allocation and exit strategy.