The United States federal government has doubled down on efforts to develop a domestic critical minerals supply chain. The impetus behind this push lies in rare earth elements, and seeks to quell growing national security concerns connected to reliance on foreign powers—especially China. In fact, in a series of recent pronouncements, former President Donald Trump made the case for the danger of China’s near-monopoly on rare earth production. He asserted that China “intelligently went and they sort of took a monopoly of the world’s magnets.”
The definition of critical minerals now includes 50 different minerals of the utmost importance. Among these, you’ll find 17 rare-earth elements that are critical to advanced technologies including electric vehicles and military applications. More than $439 million in awards between FY 2020-2024 to support and expand domestic production. This effort is meant to address existential vulnerability that stems from the dependence on outside imports.
The Pentagon made an important move last year when it offered a $150 million loan to MP Materials, a U.S. company. MP Materials has committed that all the magnets produced at its new facility will be sold for a minimum ten year period at an agreed fixed price for its neodymium and praseodymium products. This new initiative strengthens the Administration’s commitment to supporting increased domestic production capacity.
Over in America, NioCorp is in search of $1.2 billion. Their goal is to manufacture niobium, titanium, scandium, and rare earths locally in Nebraska. This project showcases a growing movement of ventures seeking to position themselves in the boomtown market for critical minerals. Demand is set to double over the next 10 years, further opening the door for growth and innovation.
USA Rare Earth is meeting America’s urgent needs with unprecedented speeds. In a few years, the company expects to be making up to 600 tons of magnets annually from its Oklahoma location. As experts point out, Americans are going to need to be producing all of North America’s demand for around 35,000 tons of magnets annually. They hope that more domestic production will be quickly ramped up in future years.
The urgency of these initiatives was underscored by recent events when China’s export restrictions on several rare earths led to a temporary halt in Ford’s electric vehicle production. This singular incident is going to raise awareness of these large undercurrents. It’s particularly dangerous to over-rely on overseas sources.
“Our national and economic security are now acutely threatened by our reliance upon hostile foreign powers’ mineral production.” – Donald Trump
Gracelin Baskaran, an industry analyst, noted that “the problem that for over a decade seemed far away hit close to home,” reflecting the immediate challenges faced by American manufacturers due to supply chain disruptions. Experts are optimistic that the U.S. is headed in the right direction towards rare earth self-sufficiency. Getting to a real solution might still require an agreement with China.
“Everyone agrees the U.S. still has to work out a deal with the Chinese because American companies need more rare earths and specialized magnets than can be produced domestically.” – David Abraham
Mark Smith, an executive involved in mineral production projects, expressed optimism about recent developments: “It looks like we’re going to finally do something to address that issue and make these projects a reality.” The commitment from the U.S. government is reflected in a $2 billion investment included in this year’s tax and spending cut bill for the Pentagon, aimed at boosting the nation’s stockpile of critical minerals.
Furthermore, $5 billion more has been set aside through fiscal year 2029 to boost investment in supply chains for critical minerals. This funding is increasingly critical as the demand for these resources keeps on rising.
Trade and Development Agency director Joshua Ballard called this moment “the Manhattan Project moment for rare earths.” Strong domestic supply chain He reinforced the acute need to build a robust domestic supply chain. Experts warn that even with all of these changes, getting to self-sufficiency could still be out of reach.
“I don’t think there will be such a deal or, if there is, that it will last.” – Derek Scissors
Mark Smith added that these initiatives “just take away the Chinese modus operandi that they’ve had for forever,” suggesting that the shift in policy could alter the dynamics of global mineral supply. Scott Dunn remains optimistic about ongoing efforts: “I certainly hope and think it actually is not what may be the last of the efforts by the U.S. government.”
We understand that things are still changing very quickly. Securing a safe, domestic supply chain for these minerals is a matter of economic and national security for America.
