"We all know the critical minerals issue is front and center. It's the president's maybe No. 1 issue for the defense industrial base and for national security—and it takes a lot," Kyle Bass said onstage at the Defense Industrial Base Accelerator (DIBX) conference in Philadelphia, and his words set the tone for a day dominated by finance, timing, and industrial scale-up challenges.
Kyle Bass, Rochefort Asset Management, and the duration mismatch
Bass outlined why his firm has steered clear of early-stage critical-minerals projects despite the apparent strategic urgency. Rochefort Asset Management has put roughly $450 million into companies over the past 18 months, Bass said — but those investments were targeted at firms "that have products, customers, and some revenue." He described the target profile as companies in an "acceleration phase" that are "still losing money, typically, but their revenues are growing and they're still staffing." The central obstacle, Bass argued, is a "duration mismatch": private capital is reluctant to commit to projects whose payback timelines are long and whose access to liquid capital is constrained.
Pentagon investments and the Korea Zinc Tennessee plant
Speakers at the event pointed to a clear role for government capital in bridging that mismatch. The Pentagon, the briefing noted, has made several investments in critical minerals companies and last year took a 40 percent stake in Korea Zinc as part of a $7.4 billion move to build a new critical mineral processing plant in Tennessee. Bass described that kind of government-backed capital as the type private investors are waiting to see: "That capital was asked to come in by the offtakers and the U.S. government because of that duration mismatch." He added that the Korea Zinc facility "is going to be huge—but it won't be operational for another four years, or five years," underscoring the timing problem the government and investors both face.
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Get a security leadReconciliation funds, market pressure, and undercapitalized firms
The Pentagon has about $5 billion in reconciliation funds to invest in critical mineral supply chains through fiscal year 2029, the conference was told. Even so, Michael Cadenazzi, the Pentagon's head of industrial base policy, described a crowded but fragile domestic supplier base: "In putting our RFIs out constantly, we find there are lots and lots of companies that are in the space. They're just undercapitalized because people struggle with a market where our No. 1 strategic competitor undercuts us," he said. The point was twofold: supply exists in North America, according to panelists, but price competition from a lower-cost rival destabilizes firms that nevertheless need long lead times and capital to scale.
DOE pilot: the "college common app" for financing
Panelists also discussed efforts to reduce transactional friction for companies seeking government financing. Asad Akram, managing director of the Pentagon's Office of Strategic Capital, described borrower behavior that complicates underwriting: borrowers "are going to multiple agencies and sort of shopping their materials because they don't know a better front door." He said the Energy Department has started piloting what he called "the college common app version of financing" — a shared digital intake where businesses could upload financing documentation once for multiple agencies to access. The tool is not fully live yet, Akram said, but the goal is to eliminate repetitive submissions when "roughly all the financing agencies are looking for the same info."
DIBX attendance, awards, and concrete bets
The DIBX gathering itself drew about 2,500 registered attendees, with sessions so full some had standing room only. Government participation was relatively small: fewer than 400 registrants were from the government, while private-sector attendees represented aerospace and defense companies, consulting, engineering, software, manufacturing, and venture capital. During the event the Pentagon awarded six of nine competing companies roughly $25 million in total. Several awards targeted critical-minerals work — 5N+ Semiconductors received $7.3 million, Graystone Resources $6.75 million, and Kunin Technologies $1.9 million. Two other notable winners were Senra Systems, which secured $4.4 million for a "wire harness manufacturing in a box" technology, and Neya Systems, awarded $5.9 million for an autonomous fuel transport effort that aims to use unmanned ground and maritime vehicles from AM General and Textron.
How venture capitalists, the Pentagon, and domestic miners are responding
- Venture capitalists: Bass and Rochefort are seeking later-stage opportunities where revenue trajectories reduce execution risk. They will continue to require clearer demand signals or government capital to justify long-duration investments.
- The Pentagon and finance authorities: Officials are using direct investments and reconciliation funds to create that demand signal and to catalyze private capital, while pursuing procedural fixes — like the DOE pilot intake — to reduce friction for borrowers across agencies.
- Domestic miners and processors: Firms in North America are plentiful, panelists said, but many remain undercapitalized and face pricing pressure from lower-cost competitors, a dynamic the Pentagon aims to blunt through targeted investments and framework agreements.
At DIBX the central arithmetic was plain: the U.S. has resource potential and some government funds, private capital sits ready but time‑sensitive, and large processing capacity — like the Korea Zinc plant — will take years to come online. The question left by the day in Philadelphia was specific and concrete: can government demand signals and streamlined financing shorten the gap between strategic urgency and industrial-scale availability before those multi-year facilities begin operations?
