🌿 Friday's Climate Infra Brief - GOAL USA!

Go USA - ahead of the USA - Australia match!

I was staring at a cap table this week when the analogy clicked: the U.S. has finally decided to field a national team in critical minerals.

For two decades the West ran a free-market lineup against a state that plays as one coordinated team: China is the coach, the scout, and the owner/bank all at once, and it doesn’t sweat quarterly earnings while it locks up the next century worth of supply. It’s hard to beat that game when you’re a Series A - a talented high school team — going up against a national squad, even if your technology is Messi-like.

For 15 years the policy works on the cost curve — subsidize the tech, drive down the LCOE, wait for parity. The IRA was that logic at full volume. Recent market signals start to shift to a different direction: policy has shifted from subsidizing technology cost to guaranteeing demand and price. The government just became the long-term offtaker of last resort. That single move drags the bankability question out of the chemistry/commodity question.

1. $110/kg — the price for neodymium-praseodymium the Pentagon agreed to pay MP Materials no matter what the market does. A hard floor set last July and now, per Reuters, the DoD is preparing to copy it across five to ten more minerals. Heavy rare earths, antimony, graphite, tungsten, the shopping list of everything China can choke off with one export license. The mechanism is the Defense Department’s “Open Price” tool, and the ambition is to turn a one-off bailout into a standing regime.

2. The G7 met in Canada stood up its own version - a critical minerals alliance with a price stabilization platform, piloting on lithium and nickel.

3. First Phosphate locked in offtake agreements and LOIs spanning its mine in Quebec through to phosphoric acid for LFP batteries. That is a buyer committing before the plant exists.

4. American Battery Technology won its appeal and got a $57M DOE grant reinstated for its $115M claystone lithium refinery at Tonopah Flats, a project the agency had killed last year, back from the dead.

5. The DoD’s Office of Strategic Capital (what a name!) signed a $500M conditional loan to Phoenix Tailings inside a ~$1B package to build its “Freedom Facility” — domestic rare earth separation and metallization, targeted for 2028.

People ask why domestic rare-earth and lithium refining hasn’t been built. It isn’t that nobody will write an equity check. It’s that every time a Western competitor nears commercial scale, China floods the market, drops spot below marginal cost, and the revenue line your debt was sized against just vaporizes. You cannot project-finance a plant whose output price Beijing controls.

A 10-year purchase agreement at a fixed floor changes the math entirely. You’re no longer betting on commodity prices. You’re betting on the U.S. government honoring a contract (which is not a zero risk). But a government contract is generally bankable. A spot market China can manipulate is not.

Ideally you don’t need the floor as the companies you back have structural and durable cost advantages. Those are the most defensible.

Two names sit at the top of my curiosity list, and both win on feedstock.

• Phoenix Tailings runs a near-zero-waste process pulling rare earth metals out of existing mining waste. So feedstock is already aboveground, already paid for, no a decade long of permitting fight to dig a new hole.

• Cyclic Materials does the recycling-side version: it recovers rare earths from end-of-life EV motors, drones, and robotics. Based on a simple insight, the magnet is a tiny sliver of a scrapped motor by weight but carries nearly all the critical-mineral value. You move roughly 2% of the mass to capture the part that matters.

If your input is waste or scrap, your cost basis is disconnected from global ore markets, which improves bankability. Ideally, the companies stand on commercial merit, and the government still write the anchor offtake or the check.

Back to football. Fielding a national team was the right call IMO. But the players still need their own legs under them. Goal USA, sure. Just make sure we built talented strikers, not a team that needs a penalty kick for every goal.