Coal Mines, Cobalt Quotas, and China's Grip

The U.S. Department of Energy awarded $75 million this week to five projects that will extract rare earth elements from coal and coal-based feedstocks , a bet that America's energy past might fund its industrial future. One pilot will operate at North Dakota's Falkirk Mine near Underwood, extracting critical minerals from lignite . Another will run at a Peabody Energy site in Missouri. The pitch: turn waste streams into weapons-grade materials without opening a single new mine.

The facilities will produce germanium, gallium, aluminum, and rare earth elements — the ingredients for semiconductors, defense systems, and the magnets that power electric motors. It's processing, not mining, that now defines the race. The strategic bottlenecks are no longer located primarily in the ground; they are found between the mine and the factory , according to a recent analysis from the Critical Minerals Institute.

Can You Extract Leverage From a Customs Glitch?

Major cobalt producers in the Democratic Republic of Congo risked losing first-half export quotas this week due to an administrative glitch affecting a customs platform, threatening as much as 20,000 metric tons of missed shipments worth $1.1 billion , Reuters reported. Congo's strategic minerals regulator, ARECOMS, set a July 5 deadline for exporters to use their first-half quotas, after which unused volumes would be withdrawn and reallocated .

Congo produces about 70% of the world's cobalt and hosts operations by CMOC, Glencore, Eurasian Resources, and Huayou Cobalt. The country has tightened control through export suspensions and quotas to support prices, which have surged 160% since February 2025 to $26 per pound, or $57,320 a metric ton . The regulator has set a 96,600-ton annual export cap for 2026 and 2027 — roughly half the country's 2024 production.

The customs platform froze on July 1. A July 2 letter from Congo's Chamber of Mines to ARECOMS said producers have been unable to register export declarations as required since July 1 . Whether the glitch was technical incompetence or strategic theater remains unclear. What's certain: Kinshasa now controls the valve on the world's most concentrated source of battery-grade cobalt, and it's learning how to turn it.

What Does China Get Before the Oil Flows?

China and Namibia signed eight cooperation agreements this week covering energy, farming, infrastructure, and minerals during talks in Beijing between Chinese leader Xi Jinping and Namibian President Netumbo Nandi-Ndaitwah, who has been on a seven-day visit seeking investment to help implement election pledges , Reuters reported Friday.

Both sides agreed to strengthen cooperation in the development of key minerals such as uranium, lithium and rare earths , according to a joint statement cited by Xinhua. Of the $1.3 billion worth of Namibian goods China bought last year, uranium accounted for 85% . Chinese firms have invested $4.2 billion in Namibia, all but $100 million of which was in the country's metals sector , according to the American Enterprise Institute.

The timing matters. Resource-rich Namibia could become the continent's fourth-largest oil producer by 2030, after Shell and TotalEnergies discovered an estimated 2.6 billion barrels of crude . China isn't waiting for the oil boom. It's locking down the uranium, lithium, and rare earths now — before Namibia has the leverage that comes with being a petro-state.

When the Pentagon Loan Falls Through

Rare earths startup ReElement Technologies has stopped seeking an $80 million Pentagon loan after the company struggled to satisfy the federal government's due diligence requirements for the conditional loan offer , two administration officials told Reuters Thursday. The loan was part of a broader $700 million critical minerals financing package announced last November, which included a $620 million loan for Vulcan Elements, a startup magnet maker that counts as an investor the private equity fund 1789, where Donald Trump Jr. is a partner .

Vulcan aims to use rare earths refined by ReElement to make magnets for the U.S. military, and when the loan package was announced, administration officials said ReElement and Vulcan were central to U.S. efforts to reduce reliance on China, which dominates global rare earths processing and magnet production .

Earlier this year, Transition Equity Partners invested $200 million in ReElement and Japan's Mitsubishi Materials agreed to acquire an undisclosed stake in the startup . ReElement CEO Mark Jensen has consistently argued the company prefers equity financing over government debt and continues discussing alternative structures with Washington; the larger story — America's effort to build an integrated domestic rare earth supply chain — appears very much alive , according to industry analysis.

The Pentagon loan may have collapsed, but the capital didn't. Private money stepped in. The question is whether Washington's due diligence was rigorous oversight or whether it signals deeper problems with how the U.S. structures critical minerals financing when speed matters.

What Changed This Week

The U.S. committed $75 million to pilot-scale facilities that will recover rare earths and critical materials from coal feedstocks at five domestic sites , shifting federal dollars toward processing rather than exploration. Congo's cobalt prices have surged 160% since February 2025 as Kinshasa enforces a 96,600-ton annual export cap through 2027 , and an administrative customs freeze this week threatened to strand $1.1 billion in shipments. China and Namibia signed eight cooperation agreements including commitments to develop uranium, lithium, and rare earths , securing Beijing's access to Southern Africa's critical minerals before the region's oil boom reshapes bargaining power.

What to Watch

The July 5 deadline for Congo's first-half cobalt export quotas has passed; watch whether ARECOMS extends the customs platform freeze or reallocates forfeited volumes to state-controlled entities. The DOE will announce selections under Topic Area 2 of its Mines & Metals Pilots program at a later date, part of the August 2025 commitment of nearly $1 billion to advance critical minerals supply chains . ReElement's negotiations with Washington over alternative financing structures will signal whether the Pentagon's due diligence requirements are a one-off or a pattern that could slow other domestic rare earths projects. And Namibia's new cooperation framework with China will be tested as the country's oil discoveries move toward production — whether Beijing's early mineral investments translate into long-term strategic control or whether Windhoek uses oil revenue to renegotiate terms.