back2026 at a glance
The critical minerals sector continues to be shaped by government policy; with state-backed capital, offtake support and trade frameworks increasingly determining which projects get built, where they sell and on what terms. Eligibility for government programmes, provenance of supply, and access to public finance have become as determinative of project bankability as commodity pricing, ore grade, operating costs and the ability to hedge price risk.
1. Geopolitics continues to drive a policy-led deal cycle for mining projects
In 2026, we are seeing policy architecture shaping deal flow in real time. US and allied government support - whether through direct investment, political backing or public lending through export credit agencies (ECAs) and/or development finance institutions (DFIs) - is materially influencing timelines, risk allocation and offtake certainty.
This has tangible practical implications for transactions. Sponsors are engaging with policymakers from the outset in order to align project eligibility and development timetables with public funding requirements. ECAs and DFIs are being incorporated as core structural features within financing arrangements. Offtake is being directed to “trusted” supply chains, where buyers are prepared to pay a premium for traceability and resilience. Permitting and regulatory approvals are increasingly viewed as critical-path value levers, rather than administrative afterthoughts.
A core part of the work we are doing for many of our early-stage mining clients with US-nexus projects involves high-level engagement with the U.S. Government, including the White House, Development Finance Corporation, EXIM Bank and U.S. Department of State. Our government advocacy and public policy team - comprising former Members of Congress and senior executive branch officials - works alongside our deal teams to help clients align projects with policy requirements. This integrated approach supported the recent success of Virtus and Lloyds' acquisition of the Chemaf group, one of the world's largest copper and cobalt mining platforms, in the Democratic Republic of the Congo: King & Spalding Advises Virtus-LME JV
What should early-stage miners do now?
Sponsors should ensure projects are "policy-ready" by structuring offtake and joint venture terms that anticipate government requirements. That means establishing a credible supply nexus to allied markets from the outset, ensuring compliance and traceability markers are embedded into project design from day one, and structuring joint venture and offtake terms that anticipate government diligence requirements - including audit and step-in rights, performance KPIs and financing structures that permit public capital to be layered in without requiring the transaction to be re-papered at the point of application. Projects that arrive policy-ready will move faster through government approvals and will have a greater chance of success.
2. Allied policy and capital now set the pace (and terms) for offtake and finance
Midstream processing capability continues to be the largest fragility in the critical minerals value chain, with the processing of graphite, rare earths and other battery materials remaining heavily concentrated in China. The systemic vulnerability in 2026 therefore sits in refining and conversion capacity, not merely in access to mines. How this vulnerability is being addressed across the main allied blocs is increasingly a function of government-led policy intervention.
United States
In February 2026, the State Department convened a Critical Minerals Ministerial of more than 50 countries and launched the Forum on Resource Geostrategic Engagement (FORGE), a framework designed to coordinate trade policy, pricing approaches and investment support among allied nations. FORGE succeeds the Minerals Security Partnership established in 2022 and is intended to function as what Vice President Vance described as “a preferential trade zone for critical minerals, protected from external disruptions through enforceable price floors”. The U.S. proposes to establish reference prices for critical minerals at each stage of production, reflecting real-world fair-market value, with those reference prices operating as a floor maintained through adjustable tariffs to uphold pricing integrity1VP Vance, Opening Remarks at Critical Minerals Ministerial, 4 February 2026 (State Department transcript); U.S. Department of State, "2026 Critical Minerals Ministerial" Fact Sheet, 4 February 2026; Joint Press Statement of the European Commission, United States and Japan, 4 February 2026.. The initiative is backed by more than USD 30 billion in U.S. government loans, financing commitments and bilateral agreements and is intended to counter non‑market distortions and de-risk investment into allied supply chains2U.S. Department of State, "2026 Critical Minerals Ministerial" Fact Sheet, 4 February 2026; EXIM, "Week in Review: Project Vault and the U.S. Strategic Critical Mineral Reserve," 6 February 2026..
Alongside FORGE, the Export-Import Bank of the United States (EXIM) announced “Project Vault”, a public-private partnership combining a USD 10 billion EXIM direct loan with approximately USD 2 billion in private capital. Project Vault establishes a strategic reserve for critical minerals, structured as a demand-led stockpile in which participating manufacturers identify the materials they require (by type, grade and volume), commit financially to purchase those materials at a fixed price, and pay storage costs and interest on the financing in exchange for guaranteed access during supply disruptions3EXIM, “EXIM Approves Project Vault Loan to Launch America's Strategic Critical Minerals Reserve” 2 February 2026; EXIM Fact Sheet, 'What is Project Vault and the U.S. Strategic Critical Minerals Reserve?' (exim.gov); CSIS, 'Project Vault: A Minerals Security Backstop,' 11 February 2026 (reporting Chairman Jovanovic's public remarks at CSIS, 3 February 2026).. The programme is designed to reduce price and supply volatility and provide greater demand certainty for critical mineral projects, thereby incentivising US‑aligned project development and offtake. In concept, it plays a role analogous - though not identical - to the Strategic Petroleum Reserve, in that it signals state commitment to supply security and provides a price reference against which private sector financiers can underwrite investment risk4EXIM, "EXIM Approves Project Vault Loan to Launch America's Strategic Critical Minerals Reserve," 2 February 2026.
Project Vault builds on a broader pattern of direct state engagement, including the U.S. government’s 2025 partnership with MP Materials, which combined equity, price floor support and long‑term offtake commitments for permanent magnets - providing insulation from the commodity price fluctuation risk that has historically deterred private capital from investing in midstream processing5Department of War / MP Materials joint announcement “MP Materials Announces Transformational Public-Private Partnership with the Department of Defense to Accelerate U.S. Rare Earth Magnet Independence”, 10 July 2025..
Europe
The Critical Raw Materials Act (CRMA), which entered into force in May 2024, establishes the EU's primary framework for securing supply across the entire critical minerals value chain. The Act sets the following 2030 benchmarks: at least 10% of the EU’s annual consumption of strategic raw materials must come from domestic extraction; at least 40% must be processed within the EU; and at least 25% must come from recycling. In addition, the Act provides that no more than 65% of the EU’s annual consumption of any single strategic raw material, at any stage of processing, should be sourced from a single third-country. A diversification cap designed to prevent continued over-reliance on any one supplier.
The CRMA creates a framework of designated strategic projects to receive support, including through streamlined permitting clocks and coordinated access to finance6Regulation (EU) 2024/1252, OJ L, 3 May 2024; European Commission Q&A, 22 May 2024. Interest so far has been strong, with 60 projects designated across two tranches in 20257European Commission press releases IP/25/864 (25 March 2025) and IP/25/1419 (4 June 2025), and more than 160 applications received in the second application round, which closed in January 20268European Commission / DG GROW public communications. The RESourceEU Action Plan, launched in December 2025, introduced a Critical Raw Materials Centre, and mechanisms for joint purchasing and coordinated stockpiling, giving offtakers and lenders greater demand visibility9European Commission press release IP/25/2891, 3 December 2025.
The challenge, however, is delivery. The 40% domestic processing target appears increasingly difficult to meet, and in February 2026 the European Court of Auditors warned that financing shortfalls, permitting delays and weak recycling progress put the targets at risk10European Court of Auditors, report published 4 February 2026; covered by S&P Global, 4 February 2026. The EU approach so far remains predominantly facilitative, relying on regulatory frameworks, targets and incentives - and whether this will prove sufficient to break China's midstream dominance and avoid medium-term supply shortfalls remains an open question. For sponsors, the CRMA provides a clearer framework than existed a year ago, but there remains a clear gap between ambition and deployed capital.
Japan and others.
Allied partners such as Japan are expanding co-investment mandates - including JOGMEC's reported USD 3.5 billion budget to accelerate upstream and downstream diversification with like-minded partners, with a particular emphasis on reducing exposure to concentrated refining and permanent magnet value chains11Minister Horii, Opening Remarks at Critical Minerals Ministerial, 4 February 2026 (State Department transcript).
Public lenders are also backing U.S. and EU midstream facilities, not just mines, and the pattern is visible on both sides of the Atlantic. The U.S. is leaning on project‑level instruments beyond stockpiling, with the Department of Energy’s Loan Programs Office supporting US‑based processing and battery‑materials facilities. This illustrates how public finance is seeding midstream capacity within allied jurisdictions rather than focusing on upstream extraction alone. Recent examples of public capital flowing into the processing chokepoint include EXIM's letters of interest for Graphite One's Ohio anode facility (upsized to a total of USD 1.4 billion in December 2025, with formal loan applications expected in 2026)12Graphite One press release via PR Newswire, 18 December 2025, and the European Investment Bank's anchor financing for Verkor's Dunkirk gigafactory (EUR 400 million in direct and intermediated lending under InvestEU)13EIB project page 20220713, signed 21 March 2024; Verkor press release, 24 May 2024.
Deal Implications
Term sheets are evolving in line with this policy-centred shift. Longer tenors, price‑stability features (including government-backed price floors of the kind seen in the MP Materials arrangements), and traceability‑linked KPIs are becoming increasingly common features of financing arrangements where alignment with government programmes is strong. We are also seeing an increase in hybrid prepay and streaming structures in this sector. In a prepay arrangement, an offtaker advances capital to a project upfront in exchange for the right to receive future production at a discounted or fixed price; in a streaming structure, an investor provides upfront financing in exchange for the right to purchase a fixed percentage of a mine's future output at a pre-agreed price, typically below market. These structures are being combined to allow allied-market offtakers to provide development-stage capital while simultaneously securing long-term supply on preferential terms - effectively converting financing support into supply chain certainty14World Economic Forum - “Making Critical Minerals Bankable” (May 2026); Mercuria/Kazakhmys USD 1.2 billion copper prepayment facility (reported by MINING.COM, 8 January 2026); JBIC/Codelco USD 466 million prepayment agreement (JBIC, 2025)..
Our upcoming article “Solving the Rare Earth Midstream Processing Gap: The Defining Economic, Technological and National Security Challenge of Our Generation” examines the midstream processing gap and its implications on Western energy, economies and national security, in more detail.
3. The Quad Critical Minerals Initiative: a new multilateral framework for coordinated investment
Whilst much of 2026 so far has been characterised by bilateral deal-making and plurilateral initiatives such as FORGE, a significant development recently occurred with the announcement of the “Quad Critical Minerals Initiative Framework” among the United States, Japan, Australia and India (the "Quad Partners"). The Framework sets out a structured programme of diplomatic cooperation across several pillars that are directly relevant to the financing and development of critical minerals projects15U.S. Department of State, Media Note, “Quad Critical Minerals Initiative Framework Among the United States, Japan, Australia, and India”, 26 May 2026.
Investment and project development
The Quad Partners have indicated an intention to mobilise up to USD 20 billion in government and private sector support through new and existing efforts to strengthen critical minerals supply chains, including in mining, processing and recycling. The Framework contemplates the identification of projects with a "Quad nexus”, defined as projects located in Quad Partner countries, operated by companies headquartered in those countries, or supplying Quad markets -that address critical mineral supply chain gaps. Support mechanisms include export credit agencies, development finance institutions, mobilisation of private capital, guarantees, loans, equity participation, insurance, subsidies, and offtake or other commercial arrangements16U.S. Department of State, Media Note, “Quad Critical Minerals Initiative Framework Among the United States, Japan, Australia, and India”, 26 May 2026.
Regulatory alignment
The Framework also contemplates cooperation on regulatory alignment, including the sharing of good practices and technical approaches to permitting, licensing and regulatory processes. Of particular significance for sponsors is the stated intention to develop or strengthen tools and authorities to review and, as appropriate, address transactions involving critical minerals that threaten national security17U.S. Department of State, Media Note, “Quad Critical Minerals Initiative Framework Among the United States, Japan, Australia, and India”, 26 May 2026. This signals the potential emergence of coordinated investment screening regimes across the four jurisdictions, which may have material implications for sponsors seeking capital or offtake partners outside the Quad.
Practical significance
The Quad partnership represents a meaningful expansion of allied coordination beyond the U.S.-EU axis. India's inclusion is particularly notable in light of its growing role in the critical minerals space, and given that previous frameworks, including FORGE and the CRMA, were primarily structured around U.S., European and established OECD18Organisation for Economic Co-operation and Development; an intergovernmental forum of 38 countries across Europe, the Americas and Asia-Pacific to promote economic co-operation, growth, trade and development-partner interests. For project sponsors, the Framework creates an additional potential source of public capital and demand visibility, and it introduces a further set of eligibility criteria against which projects may be assessed. Sponsors developing projects in Australia, India or with supply chains that touch those jurisdictions should ensure that their structuring anticipates Quad requirements alongside existing U.S. and EU frameworks.
Conclusion
The centre of gravity for critical minerals investment has decisively shifted as policy shapes the commercial landscape. From U.S.‑led price floors, strategic reserves and trade coordination to EU permitting timelines and diversification caps - allied governments are defining the market dynamics in which mining and processing projects will be financed and operated for the foreseeable future.
For developers and investors, the playbook is clear: engage policy early, embed compliance and traceability standards from day one, and target assets and partnerships that strategically align with geopolitical and supply-chain resilience objectives. Sponsors who are able to translate the current policy momentum into bankable transaction structures - securing offtake certainty, accessing public finance and government support through demonstrating alignment with allied supply chain objectives - will be the ones that achieve success.
All analysis as at 1 June 2026.
If you are advancing a project or deploying capital this year, speak to King & Spalding’s Mining and Natural Resources team, who can pressure-test or help develop your “policy ready” plan and accelerate the path from strategy to close.