Donald Trump Jr. and Eric Trump. Source: Financial times
The deal would expand the Trump family’s sprawling business empire, giving the US president’s sons a stake in a company that insiders hope will help break America’s dependence on China to supply metals used in the manufacture of munitions and other defense products, ProFinance reported, according to the Financial Times.
Chronology of investments
According to three sources familiar with the details of the deal, the brothers entered the Skyline Builders construction group in August, acquiring stakes through a special purpose vehicle (SPV) managed by a subsidiary of Dominari Securities. The size of their investment was not disclosed.
Separately, on September 22, Kazakh President Kasym-Jomart Tokayev informed Donald Trump of plans to hand over a major tungsten project to U.S. investment group Cove Kaz Capital. Cove Kaz, favored by the U.S. government, had been competing with Chinese and Russian companies. Details of this informal agreement between Trump and Tokayev appeared in the press on October 21.
On Oct. 28, Trump’s sons increased their stake in Skyline by participating in a private placement that raised nearly $24 million. Three days later, on Oct. 31, according to reports, Skyline agreed to pay $20 million for a 20 percent stake in a company with “significant critical minerals assets in Asia.”
That company turned out to be Kaz Resources, a subsidiary of New York-based investment group Cove Capital, which also controls Cove Kaz.
Government funding and strategic importance
The U.S. Export-Import Bank and the Development Finance Corporation (DFC), two federally funded agencies, last year pledged up to $1.6 billion to support the development of the North Katpar and Upper Kayrakty fields in central Kazakhstan. Cove Kaz now controls 70% of these projects.
Cove CEO Pini Althouse told the FT that the company had received “direct assistance from President Trump, Secretary of State [Marco] Rubio and Minister [Howard] Lutnick” to get a mine in Kazakhstan. He added that he has not personally spoken to the Trump brothers and does not know the size of their stakes in Skyline.
Trump Family Business and Gentlemen
Last year, the Trump family made more than $1 billion in profits (pre-tax) from their cryptocurrency projects and continued to invest heavily in companies in the fields of AI, drones and critical minerals that are winning lucrative US government contracts.
Why it matters
Tungsten is used in drilling tools, armor-piercing bullets and kinetic missiles, with the U.S. trying to build new supply chains to weaken the PRC’s control of the global rare and critical metals market.
Christopher Ecclestone of Hallgarten & Company notes that tungsten is now “an object of Pentagon lust that they want to get at any cost.” At the same time, Quentin Lamarche of TechMet SCM warns that Kazakhstan’s deposits are rich but at a very early stage of development, which will require a lot of time and investment.
