Shares in Sunrise Energy Metals jumped 16% on a single Friday. The reason had nothing to do with a discovery, an offtake deal, or a quarterly beat. It had to do with Washington deciding a New South Wales scandium deposit was now a matter of national security, worth a $400 million conditional loan from the Pentagon's Office of Strategic Capital.
That loan is one line in a much larger ledger. On August 7, the Department of Defense announced $2.03 billion in new conditional financing across four companies: $1.4 billion to battery maker Sila Nanotechnologies, $150 million to Minnesota-based Niron Magnetics for rare-earth-free magnets, the Sunrise scandium loan, and an $85.5 million equity stake in Strategic Bauxite USA for a Guyana mining project, according to a White House fact sheet cited by Manufacturing Dive and Supply Chain Dive. The Department of Defense has signed multiple agreements valued at $2.03 billion in a bid to secure battery cells and critical minerals, with conditional loan commitments through its Office of Strategic Capital worth $1.95 billion combined for Sila Technologies, Niron Magnetics and Sunrise Energy Metals. By August 8, the agency's total conditional loan book had swelled to roughly $4.9 billion, per Supply Chain Dive — and that figure sits inside a far larger ambition: a National Security Fund Finance program launched in mid-July designed to mobilize up to $100 billion for critical minerals by routing government loans through private fund managers.
This is the moment industrial policy stopped being a talking point and became a line item. The federal government is not subsidizing research. It is picking single companies — a Minnesota magnet startup, an Australian scandium deposit, a Guyanese bauxite project — and betting nine figures that each one becomes the domestic (or allied) alternative to a Chinese supply chain the Pentagon can no longer trust. Niron is a private U.S. corporation headquartered in Minnesota that seeks to eliminate dependence on rare earth magnets sourced from foreign jurisdictions. The Sunrise deal, meanwhile, aims at a mineral so obscure that most portfolio managers couldn't price it: scandium, added in trace amounts to aluminum alloys to cut weight in fighter jets and rockets. Sunrise CEO Sam Riggall told CNBC in June that the Syerston project would have "the capacity to replace everything that China supplies today from this one mining operation."
Here is the part that should give a market-minded reader pause. While the Pentagon was writing that $400 million check, the actual price of scandium in China was falling. The Shanghai Metals Market benchmark for scandium metal stood at $3,333.04 per kilogram as of August 3, down 11.1% from the July benchmark. Washington isn't paying up because scandium got scarcer or pricier in the spot market. It's paying up because the spot market runs through Beijing, and China's export controls have driven up prices for relatively scarce supplies of some rare earths, with industry participants expecting global premiums outside China to flourish in 2026. As one analyst told S&P Global, buyers of magnet materials "aren't just purchasing a chemical — they're buying assured supply over long time frames." The Global X Lithium & Battery Tech ETF (LIT), a rough proxy for the battery-metals complex the Pentagon is trying to reshore, closed at $75.23 Friday, up +0.76% on the day — a market still pricing in optimism about where all this financing eventually lands.
The Democratic Republic of Congo is running the opposite experiment, and getting a similar result. Kinshasa controls more than 70% of the world's mined cobalt, and it has spent the past eighteen months proving that a resource-rich state can set a floor under prices the same way a cartel would. After an outright export ban in 2025, the country moved to a hard quota: a hard annual export ceiling of 96,600 tonnes for both 2026 and 2027, which represents less than half of the country's 2024 production output of approximately 204,000 tonnes. The regulator, ARECOMS, keeps a discretionary reserve on top of that — the remaining 9,600 tonnes, approximately 10% of the national export ceiling, retained by ARECOMS as a strategic reserve — and it has already shown a willingness to claw back unshipped allocations, having scrapped quota allocations for second-quarter 2026 volumes not shipped by July 5, removing approximately 15,000-20,000 tonnes of annual export allowance. The payoff for Kinshasa: by mid-2026, cobalt prices had surged approximately 160% from their February 2025 lows, reaching $26 per pound ($57,320 per metric tonne). Copper Miners ETF (COPX) shares, which track producers exposed to the same Congolese basin through Kamoa-Kakula, closed at $85.70 Friday, +0.21% on the session.
China's own leverage, the one all this American and Congolese maneuvering is a reaction to, hasn't gone anywhere either. China's April 2025 restrictions on seven rare earth elements remain in place, alongside a dual-use licensing system that continues to constrain exports to the US and allied military end-users. Enforcement has sharpened rather than softened: Japanese authorities confirmed this year that two Japanese nationals employed by a major Japanese company were detained in Dalian in May 2026 on allegations of smuggling goods subject to export restrictions, reportedly involving rare-earth-related items — one of the first known cases of foreign nationals detained over an alleged rare-earth export violation.
The critics aren't wrong to worry about where this leaves the taxpayer. The Council on Foreign Relations has flagged that once Washington becomes a shareholder, it has a financial interest in a particular company's success, which could distort procurement, permitting, regulation, or enforcement. University of Wisconsin geographer Julie Klinger put the accountability question more bluntly: "Particularly as we're moving into a time where there is much more overt taxpayer-funded support of critical mineral mining and processing projects, the taxpayer does need to have quite a bit more information."
None of the three governments in this story — Washington, Kinshasa, Beijing — is actually letting a market clear. Each has decided that a mineral's price is less important than who controls the tap. The $400 million question for Sunrise Energy Metals shareholders, and for every other name now riding the Pentagon's checkbook, is whether that logic survives the next administration, or the next truce.
