The U.S. Department of Defense has announced a significant investment in Atlantic Alumina (ATALCO), committing $150 million in preferred equity to enhance the domestic supply of alumina and gallium, two critical minerals essential for various advanced technologies. This partnership aims to reduce dependence on foreign sources, particularly as China currently controls approximately 60% of the global alumina market and more than 90% of the world’s primary gallium supply.
As part of the agreement, additional funding from the government is expected to be finalized within 30 days of the deal’s closing. The investment comes as the Trump administration seeks to bolster the U.S. position in technology and defense sectors amid increasing competition with China. Both alumina and gallium play vital roles in the manufacturing of semiconductors, aerospace systems, and next-generation energy technologies.
Expanding Production Capacity
Founded in 1959, ATALCO has been producing alumina in Louisiana for decades. The recent funding is projected to significantly boost the company’s alumina output to over one million metric tons annually and establish the “first and only large-scale primary gallium production circuit” in the United States. According to ATALCO, this initiative will align public sector support with private investment, ensuring a stable onshore supply of these crucial materials.
The involvement of Pinnacle, ATALCO’s majority shareholder through its subsidiary Concord Resources Holdings, adds further financial backing to the project, with Pinnacle having invested more than $300 million in private capital.
Strategic Shift in Government Investment
This investment reflects a growing trend within the Trump administration to take direct equity positions in companies deemed strategically important rather than relying solely on traditional financial instruments like subsidies or loans. Last year, the administration acquired a 10% stake in Intel after President Trump publicly addressed concerns regarding the company’s leadership ties to China.
Additionally, the government has supported other mining firms focused on critical materials, including MP Materials and Trilogy Metals. In October, the U.S. Department of Energy also unveiled plans to acquire a 5% stake in Lithium Americas, which collaborates with General Motors on a lithium mine in Nevada aimed at supplying batteries for electric vehicles and other electronic devices.
The evolving relationship between business and government has sparked discussions among industry leaders, with many viewing Trump as a pro-business candidate during the 2024 U.S. election campaign. This latest investment in ATALCO signals a significant step towards a more integrated approach to securing essential resources for national interests.
