US government lenders are reportedly reluctant to approve US$1.6 billion ($2.3 billion) in financing for a major tungsten project in Kazakhstan with ties to President Donald Trump.
According to Bloomberg, neither the US Export-Import Bank (EXIM) nor the US International Development Finance Corporation (DFC) is currently willing to back the project being developed by Cove Kaz Capital Group.
Sources cited by Bloomberg raised concerns over the project’s commercial prospects and geopolitical risks, given Kazakhstan’s location between China and Russia.
Cove Kaz, a subsidiary of New York-based mining investment group Cove Capital, secured the tungsten project last year.
The deal, facilitated by US Commerce Secretary Howard Lutnick, was considered one of the Trump administration’s highest-profile efforts to reduce China’s dominance over critical mineral supply chains.
According to Cove Kaz, the project could eventually account for 15% of global tungsten production, potentially making it a major supplier of the strategic metal.
Trump family connections
The project has attracted attention because of its reported financial links to Trump’s sons, Eric Trump and Donald Trump Jr.
The two reportedly acquired stakes in construction group Skyline Builders (NASDAQ:KAZR), which had previously agreed to merge with Cove Kaz.
However, the proposed merger was recently abandoned, with Cove Kaz instead pursuing a direct public listing that could value the company at nearly US$2 billion, as first reported by The Wall Street Journal.
Following the listing, the Trump brothers are expected to retain an indirect stake of less than 1% in the company, which would be renamed Kaz Resources.
The company has also secured a US$32 million capital commitment from American Ventures, an investment fund linked to the Trump family.
Financing remains uncertain
Despite the project’s strategic importance, its prospects for US government financing remain unclear.
A DFC official told Bloomberg that the agency is not “actively pursuing a transaction with them at this time”.
However, Cove Kaz said it has received no indication that US government lenders have withdrawn their support.
“To the contrary, in recent weeks US government officials continue to convey full support for this generational asset,” Cove Kaz Executive Chairman Pini Althaus told Bloomberg in a statement.
Althaus added that the project does not yet require loan financing and that Cove Kaz does not expect to formally apply until it completes a Definitive Feasibility Study next year.
Under the lenders’ initial letters of interest, EXIM could provide up to US$900 million, while DFC could contribute another US$700 million in potential loans.
According to Bloomberg, Cove Kaz approached EXIM last year with a three-phase development plan estimated to cost between US$1 billion and US$1.2 billion.
The proposal outlined a development timeline of approximately 42–48 months.
Write to Jackson Chen at Mining.com.au
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