Defense Department lends $400 million to Sunrise Energy Metals

President Trump announced Aug. 7 that the U.S. will invest $3 billion in critical minerals and battery projects, aiming to amplify domestic production and support the defense and industrial sectors, ETF Trends reports. China still holds a "significant chokehold" on the critical minerals industry, the outlet notes, and the funding is designed to reduce U.S. dependence on Chinese supply chains. The measures, the article says, will help the U.S. curate its own critical minerals supply chain.

As one example, the Defense Department's Office of Strategic Capital extended a $400 million conditional loan to Sunrise Energy Metals, according to ETF Trends. The article does not detail Sunrise's operations beyond its inclusion in the Sprott rare-earth fund, so the loan's terms and the company's prospects remain unconfirmed.

The Sprott Rare Earths Ex-China ETF (REXC) holds mining companies domiciled outside China, including U.S., Canadian, and Australian names, per the outlet. The fund covers a range of rare earths, and ETF Trends argues it is "naturally well positioned" to benefit from the new government funding. Sunrise Energy Metals was a holding as of August 17. Rare earths remain crucial to industrial, AI, and defense applications, the outlet says, and ex-China companies are likely to keep benefiting from government incentives.

For advisors, this is a clean version of a geopolitical trade. REXC packages the ex-China rare-earth complex into one ticker, removing the need to forecast which miner lands the next Washington contract. The $400 million loan is a single data point, but it shows federal money is already reaching the type of company the fund tracks. The fund's design mirrors the policy target: it excludes China entirely, so every dollar of U.S. government support for ex-China miners flows into the portfolio.

Caveats remain. A $3 billion program is broad, and conditional loans can fall apart before closing. REXC holds many miners that may never see federal money. But the direction of policy is clear, and one company in the fund has already drawn a loan. Watch whether more follow.