Minerals exploration company Trilogy Metals’ shares soared more than 200% in premarket trading after the White House said it would take a 10% stake in the company, marking the latest investment in a private company by the U.S. government.
The federal government said it is going into a partnership with Trilogy, which has mining claims in Alaska. It is part of a push to unlock supplies of copper and other critical minerals in the Ambler mining district, in the remote northeast of the state. Its $35.6 million investment gives the U.S. a one-tenth stake in the Canadian company, which is listed in America, while the deal gives it the right to buy an additional 7.5% of its stock.
Trilogy stock soared 230% in Tuesday morning trading.
The move comes on the heels of the Trump administration taking holdings in the struggling semiconductor giant Intel $INTC and the rare earth company MP Materials. Washington also took a “golden share” in United States Steel as a condition of the company’s sale to Japanese firm Nippon Steel.
And last week, Energy Secretary Chris Wright said the U.S. would take a stake in Lithium Americas, another Canadian firm, in a bid to secure "our nation's access to the largest confirmed lithium deposit in North America."
The White House has portrayed the strategy as a boost for taxpayers, and pointed to Trump’s alleged skills in striking deals. But critics have raised concerns that the trend could undermine the strength of the free market.
The investment, and accompanying decision to give the green light to the Ambler Road Project – which gives access to the mining district – overturns the Biden administration’s move to block the same project last year.
The area has “one of the largest undeveloped copper-zinc mineral belts in the world and contains extensive deposits of copper, silver, gold, lead, cobalt, and other strategic metals,” it said. The administration claimed there is a “need for access to domestic critical minerals, and there is no economically feasible and prudent alternative route.”
Opponents to the project have said the 211-mile Ambler Road project have said it will harm landscapes that support local communities and wildlife.
The company said the order “reflects a renewed federal commitment to responsible resource development in Alaska and highlights the Ambler Road as critical infrastructure under federal policy.”