Trump eyes CHIPS Act funds for critical minerals, Lutnick set for bigger role

It remains unclear whether Trump’s team would channel funds as grants or equity stakes, but one source said Lutnick aims to “get the $2 billion out the door” quickly.

The Trump administration is weighing a controversial plan to reallocate at least $2 billion from the CHIPS Act to fund critical minerals projects, according to two sources familiar with the matter, Reuters reported.

The move would divert funds originally meant for semiconductor research and factory construction toward mining, processing, and recycling projects, in a bid to reduce U.S. dependence on China for essential minerals used in electronics and defense.

Lutnick’s rising influence

If approved, the plan would also boost the clout of Commerce Secretary Howard Lutnick, giving him oversight of financing decisions in the minerals sector. White House officials see the shift as a way to centralize strategy after confusion erupted last month over a Pentagon-backed investment in rare earths producer MP Materials.

“The administration is creatively trying to find ways to fund the critical minerals sector,” one source told Reuters.

CHIPS Act under Trump’s spotlight

The $52.7 billion CHIPS and Science Act, signed into law in 2022 by then-President Joe Biden, was designed to lure chip production back to the U.S. and reduce reliance on Asia.

But since taking office in January, President Trump has branded the act a 'horrible, horrible thing,' and moved to renegotiate grants to chipmakers. Repurposing funds for mining would partly align with CHIPS goals, as semiconductors require abundant supplies of gallium, germanium, and lithium, minerals China dominates.

Industry split and unanswered questions

While mining firms and processors could benefit, challenges remain. Reuters reported that former Biden officials dismissed similar ideas as uneconomical and environmentally complicated.

Albemarle CEO Kent Masters told Reuters that plans for a U.S. lithium refinery were “difficult now without some type of government support or partnership.”

It remains unclear whether Trump’s team would channel funds as grants or equity stakes, but one source said Lutnick aims to “get the $2 billion out the door” quickly.

Global stakes and White House strategy

On Tuesday, he met with the CEOs of Rio Tinto and BHP at the White House, even as negotiations with European leaders over Ukraine were under way.

Meanwhile, the Energy Department last week proposed $1 billion in minerals spending tied to the Bipartisan Infrastructure Law, signaling competing approaches within Washington.