The Pentagon’s financial investment strategy in U.S. defense and critical materials companies is expanding rapidly. Late Friday, the Defense Department’s Economic Defense Unit announced an $85.5 million equity investment agreement with Strategic Bauxite USA. The Pentagon says the money, along with a separate pool of private capital, will be used to acquire and expand a bauxite mine in Guyana.
Refractory-grade bauxite, the Pentagon said in a statement, is necessary for manufacturing high-temperature-resistant materials used to make critical components such as heat shields, thermal barriers and turbine engines in guided missiles, rockets, military aircraft and space systems. Most of the world’s bauxite is sourced from China or Chinese-owned companies.
This is at least the fifth direct equity investment the Pentagon has made in a private company. The Trump administration as a whole, through the Commerce Department and other agencies, has taken ownership stakes in more than 20 companies. It’s a highly controversial approach, as some high-profile Republicans have publicly questioned the strategy and warned that it will have significant unintended, anti-competitive consequences for the U.S. defense industry over the long term.
Separately, the Pentagon’s Office of Strategic Capital announced another $2 billion in conditional loans to U.S. companies, including a $1.4 billion conditional loan commitment to Sila Nanotechnologies Inc., a manufacturer of advanced battery materials.
