Critical minerals policy, stockpiling, and government bodies

Why the concentration exists

Government frameworks for critical minerals operate through export controls, strategic reserves, and import restrictions that shape global supply chains. China's advantage extends across extraction, refining, separation, purification, materials engineering, scale manufacturing, price control, and export licensing. This integrated structure allows Beijing to restrict exports strategically, as it did in 2009 when it cut rare earth exports by 72 percent. The policy toolkit creates supply concentration that market forces alone cannot redistribute.[3][10][15]

Mining development requires lead times that make policy responses inherently long-term projects. New mines cannot quickly offset export restrictions or supply disruptions because permitting and construction extend across decades. International agreements, such as the minerals deal with Ukraine, offer potential solutions but cannot resolve near-term supply constraints. This creates fundamental limits to supply that domestic policy measures alone cannot address.[1][2]

Cost structures reinforce geographic concentration in ways that policy frameworks struggle to overcome. China can separate rare earth oxides at $2,000 to $4,000 per metric ton, while costs in Western countries can exceed $10,000 per metric ton. The Chinese model uses credit subsidies, subsidized policy banks like China's Eximbank and the China Development Bank, and price management to spread risk across the entire economy. Western governments attempting to build alternative supply chains face structural cost disadvantages that require sustained intervention to bridge.[19][15]

What the evidence shows

Who supplies it

China dominates global critical mineral supply across multiple categories and processing stages. China produces 60 percent of the world's rare earths and maintains nearly 90 percent of global processing capacity. The country controls 70 percent of global cobalt refining and 90 percent of rare earth element separation and oxide concentration. China holds 50 percent of the world's natural reserves of rare earths, while the United States holds about 13 percent.[18][19][10]

The United States relies heavily on Chinese imports across its critical mineral supply chains. From 2019 through 2022, almost three-quarters of US rare earth imports came from China. The United States imports 91 percent of its rare earth oxides from China. In 2024, the United States was entirely reliant on imports for twelve of fifty identified critical minerals, and imported over 50 percent of total demand for another twenty-eight of those minerals, mainly from China.[6][10][18]

US government bodies have begun taking direct equity stakes and awarding contracts to build alternative supplier networks. The US government took direct equity stakes in Trilogy Metals, MP Materials, Korea Zinc, Atalco, and Lithium Americas to support domestic upstream mining and processing capacity. Since 2020, the Department of Defense has awarded approximately $439 million to vendors to reestablish domestic rare earth supply chains. The Defense Logistics Agency signed a five-year contract to purchase up to $245 million in antimony from the United States Antimony Corporation.[14][6][13]

What it depends on, and what depends on it

Critical minerals feed into defense systems, energy technologies, and advanced manufacturing applications. United States demand for critical minerals is rapidly increasing, driven by artificial intelligence, data centers, nuclear energy, and new energy technologies. The Department of War faces significant supply chain risks because for several key minerals, the vast majority of its supply chains rely on at least one supplier from a single country. These dependencies create vulnerabilities that stockpiling and policy frameworks attempt to address.[5]

The Energy Act of 2020 defines a critical mineral as any mineral, element, substance, or material designated as critical by the Secretary of the Interior, acting through the director of the US Geological Survey. The Secretary of Energy determines the Critical Materials List pursuant to authority under Section 7002(a) of the Energy Act. The final 2025 List of Critical Minerals includes arsenic, boron, metallurgical coal, phosphate, tellurium, and uranium based on recommendations from the Department of Energy, Department of War, and Department of Agriculture. The Department received 163 public comments on the draft 2025 List, supporting or opposing the inclusion of 62 minerals.[7][8]

Strategic stockpiling programs vary by country in their targets and institutional structures. Japan's critical mineral stockpiling project was formalized in 1983 as a cooperative system between government and the private sector, managed by JOGMEC, maintaining reserves with a target of 60 days of standard domestic consumption. South Korea aims to build up to 100 days of supply for rare metals by 2031 and 60 days for non-ferrous metals by 2027. The US National Defence Stockpile declined in value from $50.4 billion to $1 billion between 1952 and 2023, while stockpile shortfalls increased by 167 percent to $18.5 billion between 2019 and 2023.[21]

Where it sits in the stack

What would break it

International partnerships offer one pathway to reduce concentration risks through diversified supply chains. FORGE, the successor to the Minerals Security Partnership, was established to identify eligible projects, coordinate member states' development finance institutions to mobilize private capital, and uphold high standards and governance norms. The United States and Japan signed the United States-Japan Framework for Securing the Supply of Critical Minerals and Rare Earths through Mining and Processing on October 27, 2025. The United States signed a minerals agreement with Australia worth $8.5 billion at the Critical Minerals Ministerial, while eleven additional countries signed bilateral agreements on critical minerals.[11][9][17]

Government financing mechanisms are scaling to address the capital intensity of alternative supply chains. The EXIM Board of Directors approved a Direct Loan of up to $10 billion for Project Vault, establishing a US Strategic Critical Minerals Reserve. The Department of Energy issued a $2.3 billion loan for Lithium Americas' Thacker Pass project for lithium carbonate from clay. The US International Development Finance Corporation invested $600 million into the Orion Critical Minerals Consortium, mobilizing an additional $1.2 billion in non-US government funding.[4]

Policy design must account for fundamental differences between mineral categories and market structures. For rare earths, especially middle and heavy rare earths, refining costs have become a more important economic challenge than resource availability itself, with total demand extremely small compared to rare metals. Governments of multiple countries should identify necessary quantities in advance and provide sufficient guarantees outside normal market mechanisms, including full-volume purchase guarantees. For rare metals such as battery metals, policy design may combine price floors, compensation mechanisms, strategic stockpiling, and purchase commitments by end users.[12]

What to watch

Project Vault's first funding tranche is preparing to close as of June 1, 2026, establishing the US Strategic Critical Minerals Reserve as a public-private partnership. The initiative, backed by a $10 billion loan from the Export-Import Bank of the United States, represents a substantial expansion of US government involvement in critical minerals stockpiling. The US Export-Import Bank is preparing to close the first funding tranche as federal government critical minerals stockpiling efforts are expected to accelerate in 2026 and beyond.[11][14][20]

United States Antimony Corporation's Thompson Falls, Montana facility has a major expansion scheduled for completion by early 2026, raising total capacity to 300 tonnes per month by mid-February 2026. The Defense Logistics Agency awarded a sole-sourced, long-term contract worth up to $245 million to supply approximately 3,026 tonnes of antimony metal ingots to the National Defense Stockpile over five years. The DLA canceled its request for high-purity alloy-grade cobalt on October 24, citing outstanding issues with supplementing paperwork, after seeking a contract value of up to $500 million over five years.[13]

The US-Japan Framework participants intend to convene a bilateral Mining, Minerals and Metals Investment Ministerial within 180 days of October 27, 2025, and intend to take measures to provide financial support to selected projects within six months of the Framework date. A bill proposing a $2.5 billion stockpile of critical minerals was introduced in the US in January 2026. The US, EU, and Japan will negotiate over the next 30 days regarding coordinated trade policies and mechanisms, such as border-adjusted price floors, to mitigate critical supply chain vulnerabilities.[9][16][17]

Related nodes

Sources

1. carnegieendowment.org · 2025-10-08T12:00:00
2. energypolicy.columbia.edu
3. chinatalk.media · 2026-06-22T10:59:47
4. state.gov
5. whitehouse.gov
6. gao.gov · 2024-09-10
7. energy.gov · 2023
8. federalregister.gov · 2025
9. whitehouse.gov · October 27, 2025
10. govinfo.gov · 2009
11. energypolicy.columbia.edu · June 1, 2026
12. brookings.edu
13. fastmarkets.com
14. csis.org
15. piie.com
16. policyoptions.irpp.org · 2026-01-15
17. conference-board.org
18. cfr.org · 2024
19. rff.org · 2026-01-01
20. insidegovernmentcontracts.com · 2026
21. csep.org · 1983