China presently dominates international refining for crucial minerals important to trendy economies — together with lithium, cobalt, nickel, pure graphite, and uncommon earth parts — making it the first provider of processed inputs for superior applied sciences, comparable to semiconductors, aerospace elements, power storage methods, and electrical automobile batteries. Even minerals mined exterior of China are sometimes despatched to Chinese language-owned smelting and processing vegetation. This near-monopoly grants Beijing important leverage over international provide chains, heightening issues over U.S. dependence on Chinese language-controlled refining operations. China’s latest export controls on processed uncommon earth parts, issued in response to U.S. tariffs, carry into focus this strategic vulnerability.
The U.S. army relies upon closely on these minerals for a wide range of protection purposes. For instance, gallium-arsenide chips are utilized in digital warfare methods that energy the AN/ALQ-99 jamming pod, neodymium-iron-boron magnets are crucial to the F-35’s flight management methods, and antimony is utilized in ammunition and artillery shells. These dependencies underscore the nationwide safety dangers posed by China’s dominance in crucial mineral refining.
Though encouraging personal sector investments in refining, friendshoring, stockpiling assets, and streamlining permits has been useful, these efforts fail to deal with a core concern: The USA lacks home refining and superior processing capabilities. To realize true mineral independence, the USA ought to undertake offensive industrial insurance policies that construct up the mineral refining sector. This requires establishing a federal initiative for crucial mineral processing that builds on present efforts by increasing funding, prioritizing states with optimum situations for amenities, streamlining allowing, investing in workforce growth, and securing allied provide chains.
Present Defensive Options Assist however Face Vital Hurdles
China has traditionally weaponized its mineral dominance by imposing export restrictions on strategic supplies to stress rival economies. In 2010, China restricted uncommon earth parts exports to Japan amid a territorial dispute over the Senkaku/Diaoyu Islands, triggering worth spikes worldwide. In 2023 and 2024, China imposed export controls on germanium and gallium, that are crucial for semiconductor manufacturing. The USA has taken completely different approaches in response to those restrictions. After China’s 2010 uncommon earth parts embargo, the USA, the European Union, and Japan filed a case towards China on the World Commerce Group, in the end forcing Beijing to take away export quotas by 2015. The USA additionally revived uncommon earth mineral processing, together with efforts to reopen the Mountain Go Uncommon Earth Mine in California. In 2023, Washington intensified its “friendshoring” technique by allocating further assets to home mining and refining by the Division of Protection and Division of Vitality budgets, whereas additionally strengthening provide chain partnerships with allies like Canada and Australia.
U.S. efforts to cut back dependence on China for crucial minerals face plenty of important hurdles. First, home refining enlargement stays sluggish, with new processing vegetation and smelters taking 10–20 years to turn into operational. For instance, the Mountain Go Uncommon Earth Mine, which reopened after China’s 2010 export controls, nonetheless despatched 98 % of its uncooked supplies to China in 2019 because of the lack of U.S. processing capability.
Traders are hesitant to fund U.S. refining and processing amenities attributable to unsure returns, shifting federal insurance policies, political instability, and environmental opposition. Excessive-capital expenditures make mining and processing much less engaging to buyers, particularly when in comparison with tech sectors that require minimal upfront funding and supply greater returns. Moreover, China maintains a totally built-in provide chain — from extraction to refining, smelting, and manufacturing — making it far cheaper and extra environment friendly to course of minerals domestically than in the USA. Increasing U.S. home mineral extraction can also be difficult, as shifting from exploration to session and full-scale operations can take at the least a decade.
Even when extraction will increase, buyers stay involved that Chinese language companies might flood the market with minerals to drive down costs and make U.S. operations financially unsustainable. This performed out with lithium in 2023, when oversupply triggered a pointy drop in costs. Equally, though not pushed by deliberate financial insurance policies, nickel costs fell in 2024 attributable to overproduction by Chinese language companies targeted on short-term income. This development was additional amplified by the adoption of a brand new chemical processing method that considerably boosted output. As a result of extraction and refining should scale collectively to create an economical, absolutely built-in U.S. provide chain, these obstacles severely hinder progress.
Second, whereas capability is steadily increasing, options to Chinese language processing and refining stay restricted. In Japan, corporations like Sumitomo Steel Mining have traditionally targeted on refining nickel and cobalt, however the authorities has not too long ago taken steps to broaden uncommon earth refining. The Australian authorities can also be scaling up help for uncommon earths processing, offering grants to companies comparable to Australian Strategic Supplies Restricted and lengthening financing to Iluka Assets. In South Korea, Korean Zinc Firm, Ltd.; POSCO Future M Firm, Ltd.; and LS-Nikko Copper Inc. are energetic in mineral processing. Regardless of the efforts of those three nations, China nonetheless dominates 85 % of uncommon earth refining, 90 % of world graphite processing, and almost all of germanium, gallium, and tungsten refining. Japan, Australia, and South Korea additionally face capability constraints, greater processing prices, and competing home priorities that restrict their potential to totally help U.S. demand. Furthermore, their geographic proximity to China heightens their vulnerability within the occasion of armed battle.
Third, whereas stockpiles can present a short lived buffer, they don’t eradicate the necessity for safe, long-term provide chains, as reserves will ultimately deplete. China’s dominance within the sector makes it troublesome for the USA to find out optimum stockpile ranges, particularly given competing calls for between army and civilian industries. Present forecasting fashions, comparable to these developed by the Institute for Protection Analyses, embrace concerns for crucial civilian sectors. Nevertheless, these fashions don’t account for the downstream impacts of provide disruptions throughout the broader industrial base. Moreover, stockpiling is expensive, requiring specialised storage, upkeep, and periodic replenishment to forestall materials degradation. Including to the complexity, China’s potential to manipulate mineral markets complicates U.S. procurement methods: If costs surge, replenishing stockpiles turns into prohibitively costly, whereas worth crashes scale back incentives for home extraction and refining.
Fourth, streamlining permits is commonly proposed as a part of an answer, nevertheless it alone doesn’t assure speedy useful resource extraction. Mining initiatives sometimes take 15–20 years to succeed in full-scale manufacturing attributable to a prolonged course of involving exploration, feasibility research, environmental assessments, and building. Political shifts between administrations often lead to coverage reversals on environmental rules, creating uncertainty for long-term investments. Moreover, native opposition and authorized challenges may cause important delays, as seen with the Thacker Go lithium mine in Nevada, which, regardless of its potential to provide 40,000 metric tons of battery-quality lithium carbonate, has confronted years of lawsuits and protests which have stalled progress.
Efforts to safe mineral independence stay incomplete, with some of the urgent challenges being the absence of sturdy home refining and smelting capability inside the USA.
The Limits of Earlier Funding Initiatives
The Biden administration created funding initiatives aimed toward strengthening crucial mineral provide chains. These included the Inflation Discount Act, Creating Useful Incentives to Produce Semiconductors (CHIPS) Act, and Protection Manufacturing Act, every of which performed a task in supporting the home business. The Inflation Discount Act offered subsidies for battery manufacturing and clear power initiatives, producing over $224 billion in investments. The CHIPS Act allotted $30 billion to non-public sector initiatives throughout 15 states, supporting the development of 16 new semiconductor manufacturing amenities and creating greater than 115,000 manufacturing jobs. Nevertheless, these initiatives stay too fragmented, with assets unfold throughout numerous businesses with competing priorities, somewhat than specializing in scaling up refining and metallurgical processing. The Protection Manufacturing Act, arguably probably the most impactful initiative, allotted $150 million particularly to crucial minerals, funding key initiatives comparable to $19 million for a tin smelting and refining facility in Pennsylvania, $37.5 million for growing the Graphite Creek deposit and refining operations in Alaska, and over $100 million to determine a U.S.-based uncommon earth separation plant.
Biden additionally expanded Division of Vitality initiatives and elevated Division of Protection contracts to spice up home manufacturing. The Division of Vitality allotted $19.5 million towards securing home provide chains, and the administration budgeted an extra $43 million to boost battery applied sciences for electrical automobiles. Nevertheless, a better portion of the Division of Vitality’s general funding — significantly the Workplace of Science Monetary Help Program’s $500 million open name — was distributed throughout a spread of areas solely marginally related to crucial assets or mineral processing, comparable to fusion power sciences, nuclear physics, and organic and environmental analysis. The Protection Division awarded a $26.4 million grant to help a niobium refining plant in Pennsylvania. But, this stays only one challenge amongst many shortcomings within the effort to determine a self-sufficient U.S. provide chain.
Regardless of these notable investments, Biden-era initiatives largely did not immediately and adequately handle refining and smelting, leaving a crucial hole within the provide chain. Present funding ranges stay inadequate to shut the structural deficit in home processing capability, maintaining the USA depending on international provide chains for crucial minerals.
A Federal Vital Mineral Processing Initiative: The Path to U.S. Independence from China
At the moment, the Division of Protection lacks a robust rationale to speculate billions in processing amenities or mines, on condition that it’s broadly understood that army demand for crucial minerals represents solely a small fraction of general utilization. Though precise figures for protection consumption of those supplies are troublesome to estimate, U.S. army consumption of uncommon earth parts, as an illustration, accounts for lower than 0.1 % of world demand. However, there are sturdy nationwide safety causes to subsidize the business. Army demand is projected to triple — from $15 billion in 2022 to $46 billion by 2046. Most international processing capability is concentrated in China, a strategic rival to the USA in a number of methods. The personal sector is unlikely to make important investments with out substantial authorities backing. Moreover, many of those supplies are irreplaceable in key protection methods. Any provide disruption might lead to manufacturing delays or immediately undermine fight readiness.
A federal crucial mineral processing initiative is crucial to eradicate U.S. dependence on China for crucial minerals. Congress might want to allocate lots of of billions of {dollars} over the following few many years. Changing China’s copper smelting and refining capability alone would require roughly $85 billion. To jumpstart this initiative, Congress ought to allocate $20–40 billion of seed and debt funding over the following decade by a Vital Minerals Industrial Act, forming a strategic public-private partnership that incentivizes U.S. companies to put money into and broaden refining and smelting amenities. This laws will differ from the Vital Minerals Safety Act of 2024, which emphasizes reporting and suggestions, and the Vital Mineral Consistency Act of 2025, which prioritizes transparency.
As soon as funding is allotted, step one can be to make sure efficient fund distribution throughout key funding areas. Grants and tax rebates ought to be offered to U.S. corporations investing in refining, smelting, and metallurgical processing. Moreover, public-private partnerships ought to be established to allow U.S. corporations — comparable to these in know-how, aerospace, power storage, automotive, and protection — to function offtake companions, securing decrease refining and smelting prices in trade for long-term provide commitments. Federal businesses such because the Division of Vitality, the Division of Protection, and the Worldwide Improvement Finance Company ought to broaden low-interest mortgage packages to help home processing amenities. To protect these investments from political shifts, the Protection Manufacturing Act ought to be used to fast-track funding for these initiatives.
The second step can be to strategically choose U.S. states with probably the most favorable situations for large-scale refining and smelting operations. These states should have ample land, mining-friendly legal guidelines, proximity to ports or mineral deposits, and present infrastructure. Optimum places embrace Texas, Arizona, Utah, and West Virginia, all of which supply sturdy regulatory environments and present industrial capability. Oklahoma would even be a attainable location. Governor Kevin Stitt has supplied incentive packages to relocate processing amenities to the state. Utah, which additionally has lithium, beryllium, and tungsten deposits, is house to Kennecott Utah Copper, a division of Rio Tinto, which operates the Bingham Canyon Mine — already outfitted with smelting and refining amenities that contribute eight % of U.S. annual copper manufacturing. Uncommon earth parts in coal-related streams, together with acid mine drainage and coal waste byproducts, have been found in West Virginia. Nevertheless, the method of extracting these parts isn’t but commercially viable. Texas gives a pro-business authorized atmosphere, no state earnings tax, and powerful port infrastructure for importing uncooked supplies. Arizona has fast-tracked mining allow legal guidelines and entry to giant reserves of copper, lithium, and uncommon earth parts. At the moment, California’s Mountain Go Mine Uncommon Earth Mine, operated by MP Supplies, is the one energetic uncommon earth mining and processing facility in the USA.
The third step offers with streamlining the allowing course of for refineries and smelters. In China, smelters typically take two to 3 years to acquire permits. In contrast, the method takes 7 to 10 years in the USA. In line with an S&P World Report, it takes a mean of 29 years to carry a brand new mine on-line in the USA, making it the second slowest nation on the planet for mine growth. For instance, the Thacker Go lithium challenge submitted its preliminary operations plan in August 2019, nevertheless it was not till 2024 that the Division of Vitality finalized a mortgage to help its growth, together with the development of a sulfuric acid plant and a lithium processing facility. Equally, the Mountain Go Uncommon Earth Mine secured its environmental permits in 2010 to assemble a brand new uncommon earth processing facility however didn’t full building till 2014, though it had on-site processing amenities that smelt and refine uncommon earth ore into completed merchandise. These delays may be mitigated by utilizing the prevailing fast-track approval course of established below the Fixing America’s Floor Transportation Act of 2015 to speed up the event of crucial mineral infrastructure. This laws is especially well-suited for this function, because it streamlines allowing for initiatives that exist already and are supported by federal funding packages.
The fourth step focuses on workforce growth to make sure the USA has the required manpower to function these amenities. By 2029, an estimated 221,000 staff within the mining sector will retire. Given the size of enlargement required in each mining and refining, the USA will want 4 to 5 instances that variety of staff. The workforce problem is exacerbated by a number of components: an getting older workforce attributable to retirements; declining educational packages, as many universities have shut down metallurgy and supplies science packages due to declining pupil curiosity; and an financial shift away from heavy business, leading to a scarcity of coaching alternatives for younger professionals to enter the sphere. At the moment, solely 14 Accreditation Board for Engineering and Expertise-accredited packages stay, together with the College of Utah, West Virginia College, and the Colorado College of Mines. The U.S. authorities offers restricted monetary help for packages, such because the Supplies Analysis Science and Engineering Facilities. Latest laws and packages, together with the Mining Faculties Act (which allotted $10 million from 2024 to 2031) and the Nationwide Science Basis’s Regional Innovation Engines Program, offers funding for these partnerships. Whereas the federal government has rightly maintained help for these initiatives, they nonetheless fall wanting addressing the size of the problem.
Alternatively, the USA might import expert staff from overseas. Nevertheless, the U.S. immigration course of for extremely expert staff is notoriously sluggish, and nationwide safety issues could restrict international pupil enrollment in metallurgy packages. Moreover, international competitors for expertise is fierce, with nations like China, Australia, Canada, and Germany actively recruiting the identical workforce. The U.S. authorities should allocate large sums of funding to broaden coaching packages and rebuild the expertise pipeline.
Lastly, as soon as these 4 steps are in place, the USA ought to strengthen allied provide chains by requiring all federally funded protection, infrastructure, and power merchandise to use 100% U.S.-processed crucial minerals. Moreover, the USA must also deepen commerce partnerships with Canada, Australia, Japan, and South Korea to collectively put money into refining and diversifying uncooked supplies, and to safe long-term off-take contracts with personal and authorities companions. Present frameworks, such because the State Division’s Minerals Safety Partnership — a multilateral initiative with 14 nations aimed toward strengthening crucial mineral provide chains — and AUKUS, the trilateral safety partnership targeted on superior applied sciences and demanding supplies, present a basis for advancing this technique.
Conclusion
Given the urgency to interrupt away from Chinese language dependence, pursuing these 5 steps to safe U.S. mineral independence isn’t solely a matter of financial safety, however certainly one of nationwide survival. And not using a federal crucial minerals processing initiative, the U.S. authorities can use the Protection Manufacturing Act to grab entry to uncooked supplies, however that energy has clear limits — particularly in sustaining manufacturing over time. The federal government may seize domestically out there mineral stockpiles. Nevertheless, as of 2022, the USA remained extra than 50 % import-dependent for 51 nonfuel mineral commodities and absolutely reliant on imports for 15 of them.
On the processing and smelting aspect, seizure is just step one. With out home capability to refine these supplies, they continue to be militarily ineffective. In an armed battle with China, the USA would lose entry to crucial Chinese language processing amenities. Present U.S. processing capabilities are restricted, and with out critical funding, the Division of Protection would face actual constraints in scaling manufacturing. This isn’t theoretical: Throughout the COVID-19 pandemic, the federal government invoked the Protection Manufacturing Act to speed up ventilator manufacturing, but nonetheless encountered main delays attributable to restricted industrial infrastructure. Compounding the problem is the U.S. reliance on foreign-owned mental property for key protection applied sciences. The Protection Manufacturing Act can’t override or replicate proprietary mental property in areas like microelectronics, uncommon earth processing, superior battery chemistries, or the specialty alloys utilized in hypersonic and stealth methods. With out entry to that data or the means to exchange it, even seized uncooked supplies can’t be become army functionality at scale.
Alvin Camba, Ph.D., is a crucial supplies specialist on the Related Universities, Inc., the place he works as a part of the Beacons Venture, a U.S. Division of Protection-funded initiative targeted on crucial assets and U.S. provide chains. He earned his doctorate from Johns Hopkins College and is a broadly revealed knowledgeable on Chinese language-Southeast Asian relations.
Picture: Tmy350 through Wikimedia Commons.
