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Short Sellers Target U.S. Critical-Minerals Stocks as Policy Boost Fades

2026-08-01·newswire-us-stock-060944
Short Sellers Target U.S. Critical-Minerals Stocks as Policy Boost Fades.

Hedge funds are increasing their short positions in U.S. critical-minerals companies, arguing that support from the Trump administration remains insufficient to drive rapid global growth in the industry. Stock-lending data from S&P Global Market Intelligence showed that short interest in U.S.

mining companies has risen this year, including at US Antimony Corporation, American Resources Corporation, also known as ARC, and MP Materials. Last year, the U.S. government provided substantial funding to the industry through equity investments, loans and contracts in an effort to build a domestic supply chain.

Shares of companies supplying critical minerals and rare earths surged as a result. MP Materials gained more than threefold last year after the U.S. government invested in the company and set minimum guaranteed prices for some of its products.

The company had also received an investment in 2020 from prominent venture capitalist Chamath Palihapitiya through a transaction. USAC's stock nearly tripled during the same period after the company won a contract last year to supply the Pentagon with up to $245 million worth of antimony.

In March this year, it also received a $27 million investment from emergency funds earmarked for Ukraine. USA Rare Earth, another stock that surged last year, received $1.6 billion in conditional financing from the U.S. Commerce Department. In exchange, the company agreed to give up a 10% equity stake after the transaction was completed.

In July this year, ReElement Technologies, a former subsidiary of American Resources Corporation, also said it had received $25 million from the Defense Department. According to Vanda Research, stocks in this group have become popular trading targets among retail investors. Investors are increasingly concerned that the rapid rally may have gone too far.

Meaningfully reshaping global supply chains is expected to take years, while China's abundant supply of products could limit the competitiveness of overseas producers.

Siegfried Eggert, chief executive of short-selling firm Grizzly Research, said, "Some stocks appear to have been pushed higher by Trump's rhetoric, while others lack sufficient economic support to sustain their share prices." Grizzly Research previously published a critical report on MP Materials. Despite the U.S.

government's efforts, the broader balance of power will be difficult to change. China still controls most of the global supply of critical minerals after decades of sustained investment in mining.

A recent report by the nongovernmental Safes Center for Critical Minerals Strategy found that Western countries' ability to improve their mineral supply chains depends less on access to geological resources than on resolving a long-standing public-sector "financing gap." Some investors warn that developing new mines and processing facilities requires substantial capital and may take 10 years or longer.

Even significant U.S. government funding may not be enough to end China's dominance. Christian Putz, founder and chief executive of investment firm ARR Investment Partners, said, "If history is any guide, these [U.S.] rare-earth companies will rise sharply in the short term, but then ... the market will once again be dominated by China."

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Short Sellers Target U.S. Critical-Minerals Stocks as Policy Boost Fades

Hedge funds are increasing their short positions in U.S. critical-minerals companies, arguing that support from the Trump administration remains insufficient to drive rapid global growth in the industry. Stock-lending data from S&P Global Market Intelligence showed that short interest in U.S. mining companies has risen this year, including at US Antimony Corporation, American Resources Corporation, also known as ARC, and MP Materials. Last year, the U.S. government provided substantial funding to the industry through equity investments, loans and contracts in an effort to build a domestic supply chain. Shares of companies supplying critical minerals and rare earths surged as a result. MP Materials gained more than threefold last year after the U.S. government invested in the company and set minimum guaranteed prices for some of its products. The company had also received an investment in 2020 from prominent venture capitalist Chamath Palihapitiya through a transaction. USAC's stock nearly tripled during the same period after the company won a contract last year to supply the Pentagon with up to $245 million worth of antimony. In March this year, it also received a $27 million investment from emergency funds earmarked for Ukraine. USA Rare Earth, another stock that surged last year, received $1.6 billion in conditional financing from the U.S. Commerce Department. In exchange, the company agreed to give up a 10% equity stake after the transaction was completed. In July this year, ReElement Technologies, a former subsidiary of American Resources Corporation, also said it had received $25 million from the Defense Department. According to Vanda Research, stocks in this group have become popular trading targets among retail investors. Investors are increasingly concerned that the rapid rally may have gone too far. Meaningfully reshaping global supply chains is expected to take years, while China's abundant supply of products could limit the competitiveness of overseas producers. Siegfried Eggert, chief executive of short-selling firm Grizzly Research, said, "Some stocks appear to have been pushed higher by Trump's rhetoric, while others lack sufficient economic support to sustain their share prices." Grizzly Research previously published a critical report on MP Materials. Despite the U.S. government's efforts, the broader balance of power will be difficult to change. China still controls most of the global supply of critical minerals after decades of sustained investment in mining. A recent report by the nongovernmental Safes Center for Critical Minerals Strategy found that Western countries' ability to improve their mineral supply chains depends less on access to geological resources than on resolving a long-standing public-sector "financing gap." Some investors warn that developing new mines and processing facilities requires substantial capital and may take 10 years or longer. Even significant U.S. government funding may not be enough to end China's dominance. Christian Putz, founder and chief executive of investment firm ARR Investment Partners, said, "If history is any guide, these [U.S.] rare-earth companies will rise sharply in the short term, but then ... the market will once again be dominated by China."

Hedge funds are increasing their short positions in U.S. critical-minerals companies, arguing that support from the Trump administration remains insufficient to drive rapid global growth in the industry. Stock-lending data from S&P Global Market Intelligence showed that short interest in U.S. mining companies has risen this year, including at US Antimony Corporation, American Resources Corporation, also known as ARC, and MP Materials.

Last year, the U.S. government provided substantial funding to the industry through equity investments, loans and contracts in an effort to build a domestic supply chain. Shares of companies supplying critical minerals and rare earths surged as a result.

MP Materials gained more than threefold last year after the U.S. government invested in the company and set minimum guaranteed prices for some of its products. The company had also received an investment in 2020 from prominent venture capitalist Chamath Palihapitiya through a transaction.

USAC's stock nearly tripled during the same period after the company won a contract last year to supply the Pentagon with up to $245 million worth of antimony. In March this year, it also received a $27 million investment from emergency funds earmarked for Ukraine.

USA Rare Earth, another stock that surged last year, received $1.6 billion in conditional financing from the U.S. Commerce Department. In exchange, the company agreed to give up a 10% equity stake after the transaction was completed.

In July this year, ReElement Technologies, a former subsidiary of American Resources Corporation, also said it had received $25 million from the Defense Department.

According to Vanda Research, stocks in this group have become popular trading targets among retail investors.

Investors are increasingly concerned that the rapid rally may have gone too far. Meaningfully reshaping global supply chains is expected to take years, while China's abundant supply of products could limit the competitiveness of overseas producers.

Siegfried Eggert, chief executive of short-selling firm Grizzly Research, said, "Some stocks appear to have been pushed higher by Trump's rhetoric, while others lack sufficient economic support to sustain their share prices." Grizzly Research previously published a critical report on MP Materials.

Despite the U.S. government's efforts, the broader balance of power will be difficult to change. China still controls most of the global supply of critical minerals after decades of sustained investment in mining.

A recent report by the nongovernmental Safes Center for Critical Minerals Strategy found that Western countries' ability to improve their mineral supply chains depends less on access to geological resources than on resolving a long-standing public-sector "financing gap."

Some investors warn that developing new mines and processing facilities requires substantial capital and may take 10 years or longer. Even significant U.S. government funding may not be enough to end China's dominance.

Christian Putz, founder and chief executive of investment firm ARR Investment Partners, said, "If history is any guide, these [U.S.] rare-earth companies will rise sharply in the short term, but then ... the market will once again be dominated by China."

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