Pentagon’s ‘Deal Team Six’ aims to challenge China’s grip on rare earth power

Mining05-15

From an office a few blocks from the White House, a group of former Wall Streeters is at the forefront of the Pentagon’s plan to crack China’s critical minerals stranglehold. Their goal is to create ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPentagon’s ‘Deal Team Six’ aims to challenge China’s grip on rare earth power\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-05-15 07:33 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.mining.com/web/pentagons-deal-team-six-aims-to-challenge-chinas-grip-on-rare-earth-power/><strong>Mining</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>From an office a few blocks from the White House, a group of former Wall Streeters is at the forefront of the Pentagon’s plan to crack China’s critical minerals stranglehold.\nTheir goal is to create ...</p>\n\n<a href=\"https://www.mining.com/web/pentagons-deal-team-six-aims-to-challenge-chinas-grip-on-rare-earth-power/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TISI","symbol_name":"Team Inc","start_time":0,"source_url":"https://www.mining.com/web/pentagons-deal-team-six-aims-to-challenge-chinas-grip-on-rare-earth-power/","article_id":"2635035353","we_media_id":null,"thumbnails":["https://www.mining.com/wp-content/uploads/2020/09/1280px-The_Pentagon_US_Department_of_Defense_building.jpg"],"rights":{"source":"mining_highlight","url":"https://www.mining.com/web/pentagons-deal-team-six-aims-to-challenge-chinas-grip-on-rare-earth-power/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2635035353","pubTimestamp":1778801580,"columns":[],"sourceInfo":{"source_id":"mining_highlight","name":"MINING.COM"},"weMediaInfo":null,"summary":"The aggressive dealmaking drive is a departure from the past decade.","collect":0,"end_time":0,"defaultTopTitle":"mining.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TISI":"Team Inc","BK4120":"环境与设施服务","REMX":"VanEck Rare Earth and Strategic Metals ETF"},"translate_title":"五角大楼“交易第六小组”旨在挑战中国对稀土权力的控制","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TISI":1.5,"REMX":1.5},"content_text":"From an office a few blocks from the White House, a group of former Wall Streeters is at the forefront of the Pentagon’s plan to crack China’s critical minerals stranglehold.\nTheir goal is to create an independent source for the rare earth elements and magnets used in everything from microwave ovens to missiles. They want to prevent a repeat of last year, when President Donald Trump was forced to back down in his trade war after China cut off supplies.\n\nChina’s grip on rare earths remains tight amid Xi-Trump showdown\n\nThe Pentagon group is known internally as “Deal Team Six” in a half-joking reference to the Navy’s elite special missions unit, Seal Team Six. It’s racing to put together creative deals with billions of dollars in equity stakes, long-term price floors, purchase commitments, loans and other financial tools.\n“We’re at a five-alarm fire stage,” said Rush Doshi, who was China director at the National Security Council during the Biden administration. “There’s a sense that we don’t have time to ask if it would have been better if we did this with a pure market-mechanism method instead.”\nChallenging China’s grip on the business — something Beijing spent decades building — has long been a US goal, but results were sparse. Even the most optimistic forecasts of the new Pentagon team suggest it will take at least until the end of the decade for US production to ramp up.\nThe aggressive dealmaking drive is a departure from the past decade, in which the US focused on limiting exports to China, blocking its deals in the US and prosecuting its spies and hackers. The Pentagon team, officially called the Economic Defense Unit, also plans to apply its new approach to vulnerabilities like undersea data cables and chemicals needed to make medications.\nSome industry officials warn that the Pentagon’s rush to do deals has led it to back unproven companies and overlook potential conflicts of interest. They say that the goals are unrealistic and that the government approach encourages companies to exaggerate their capabilities to get funding.\nThe Trump administration “practically shouts from the rooftops that its decisions will be made for financial gain, rather than to create independent supply chains,” said Derek Scissors, a senior fellow at the conservative American Enterprise Institute.\nThe Pentagon denies that. “The War Department maintains strict impartiality, prioritizing solutions that directly benefit the warfighter,” spokesman Sean Parnell said. “We employ a rigorous vetting process for all prospective partners, ensuring every company delivers on its promised capabilities and marketed claims.”\nThe Pentagon team has said it’s got $200 billion in financing capacity over the next three years. Still, questions remain about how the dealmaking fits with laws on government investments.\n“Little law currently exists” to govern the spurt of equity deals in particular, Senator Roger Wicker, the Mississippi Republican who chairs the Senate Armed Services Committee, said at a hearing in February. He called for more coordination with Congress.\n\n\nThough used in small quantities, rare earths are critical to as much as $1.2 trillion in value-added production, according to Bloomberg Economics.\nThe administration aims to be able to produce enough magnets to cover half the world’s demand by 2030. China produced 94% of rare earth magnets in 2024, according to the International Energy Agency.\nWhile the Economic Defense Unit was formed in April, the current push dates back to the early weeks of the second Trump administration. Reporting to Deputy Secretary of Defense and private equity billionaire Stephen Feinberg, the EDU is working with other parts of the Defense Department and agencies like Commerce and the US International Development Finance Corp. to put together the deals.\nWhen China began restricting supplies of rare earths and magnets last year in retaliation for Trump’s tariffs, the impact was almost immediate, with auto makers and other big users warning that they’d be forced to stop production. Beijing only eased the limits after Washington agreed to pull back on tariffs and restrictions on technology exports to China.\n\n\nSince then, the administration has rushed to put together a non-Chinese supply chain for the permanent magnets made with rare earth elements.\nIn July, Feinberg spearheaded a deal with MP Materials Corp., the only rare earths producer in the US. The pact includes a $400 million equity investment, the first of its kind in modern Pentagon history, positioning the government to become the company’s largest shareholder. The Pentagon also set a price floor for some of MP’s rare earth products and guaranteed all of the magnets it will produce at a new facility will be purchased by defense and commercial customers for ten years.\nSubsequent deals, some of them still in preliminary phases, range from a US magnet producer to a Brazilian rare earth miner that was later sold to a US company in a $2.8 billion deal.\n\nBrazil probes USA Rare Earth’s $2.8B deal for Serra Verde\n\nTo ensure there are buyers for the new non-Chinese magnets, administration officials have leaned on major automakers in the US to commit to purchasing deals, even though the companies have not yet produced them at scale, according to people familiar with the conversations.\nCritics have accused the Pentagon of failing to properly screen for corruption and conflicts of interest. They note that Cerberus Capital Management, the private equity firm co-founded, is a major player in the same sectors where the Pentagon is investing, and that the president’s son, Donald Trump Jr., is a partner at a firm that invested in Vulcan Elements, which has a $620 million conditional loan deal.\nThe Pentagon spokesman said Feinberg is “a man of integrity who has conducted himself ethically throughout his entire career.” Feinberg divested his stakes in his businesses after taking office to comply with federal ethics rules.\nA spokesman for Trump Jr. said he is a passive investor in Vulcan through a fund and that he “does not ever interface with the federal government on behalf of any company he invests in or advises.”\nA person familiar with the Pentagon’s thinking said EDU had not been aware of any Trump Jr. stake at the time of the deal because it was too small to surface in the vetting process. This person added that, even if they had known of the stake, there aren’t many firms that do what Vulcan does, and the department has to respond to market realities.\n“They’re supporting projects meant to support the broader industrial base, not just shoring up defense needs,” said Chris Kennedy, an economic statecraft analyst at Bloomberg Economics. “That’s something that was nearly impossible” in the past, he said.\n(By Kate O’Keeffe)","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"policyRegulatory","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.42.2","shortVersion":"4.42.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2635035353","isCrawlerRequest":true}