United States Antimony Corp (NYSE:UAMY) encountered a steep downturn in its stock value on Thursday following revelations concerning a shift in U.S. administration policy pertaining to financial support for critical minerals projects. Previously anticipated plans to guarantee a minimum price floor for these domestic initiatives have been shelved due to concerns regarding congressional funding constraints and the complexities involved in maintaining a government-backed pricing framework.
The news, which surfaced via a report citing confidential discussions between officials and U.S. minerals industry leaders in Washington, indicates that future domestic mineral projects must seek financial viability independently, without reliance on federal price guarantees. This development represents a marked reversal from earlier signals that the price support mechanism, previously established for MP Materials Corp (NYSE:MP) in July of last year, would be expanded to encompass a wider array of domestic mineral producers.
While the prior agreement involving MP Materials remains effective, officials have clarified that analogous minimum price assurances will not be extended to other operations within the sector. This strategic pivot occurs even as the administration underscores the importance of bolstering U.S. critical minerals supply chains, exemplified by a recent $1.6 billion federal investment in USA Rare Earth Inc (NASDAQ:USAR). The overarching objective remains to reduce American dependency on Chinese entities, which currently dominate the rare earth elements market—a vital component in sectors ranging from defense to electronics and renewable energy technologies.
The elimination of government-backed price guarantees could amplify financial hurdles for U.S. mineral projects, particularly as domestic producers confront competition from Chinese suppliers enjoying substantial scale advantages and governmental support. Amid these reports, United States Antimony issued a direct response disputing the narrative as "inaccurate, misleading and inconsistent with the facts." The company emphasized that its long-term contracts with U.S. government agencies remain intact and affirmed that federal support for the domestic antimony supply chain has not been altered.
Despite these reassurances, market reaction was pronounced. United States Antimony's stock price declined by 12.78%, reaching $8.45 at the time of Thursday's market close, according to data from Benzinga Pro. This decline reflects heightened investor concern over the evolving policy environment and its potential impact on the operational viability and financing of critical mineral projects within the United States.
Other industry players also exhibited notable price movements, with MP Materials Corp shares retreating by 8.34% to $61.42, and USA Rare Earth Inc declining 11.1% to $22.39. These price actions underscore the broader market sensitivity to federal policies affecting critical minerals and the strategic importance of securing robust supply chains in this sector.
In summary, the administration's withdrawal from plans to enforce minimum price guarantees for critical minerals projects signals a significant policy adjustment with immediate repercussions on market valuations of relevant domestic producers. These changes necessitate that future projects in the U.S. pursue self-sustained financial models amid fierce competition from established foreign suppliers who benefit from government backing. United States Antimony's public rebuttal and ongoing government contracts offer some stabilization, though the situation remains fluid as market participants assess the implications of this policy reversal.