Critical minerals—such as lithium, cobalt, and rare earth elements (REEs)—are the building blocks of modern industry, underpinning technologies ranging from electric vehicle batteries to advanced defense systems. Their importance has grown exponentially as the global economy has moved toward electrification, digitalization, and clean energy technologies, making reliable access not merely an economic advantage but a national imperative.
Much like semiconductors, critical minerals are the unseen ingredient in scores of advanced manufacturing products. And, as with semiconductors, the United States has become increasingly reliant on international critical mineral suppliers, with impacts to national security and competitiveness in key sectors.
While critical mineral shortages have been flagged as an issue for years, bipartisan interest is intensifying and the federal government is taking steps to secure the supply chain, beginning with a recent agreement granting U.S. firms access to a range of elements in Ukraine. Additionally, as part of a new industrial strategy (direct state investment), the Office of Strategic Capital issued its first direct loan—a $150 million investment in MP Materials, the only operational critical minerals mining facility in the United States, and the U.S. Department of Energy released a funding opportunity of nearly $1 billion to scale “mining, process and manufacturing technologies.” Meanwhile, Congress is advancing a host of legislation to strengthen domestic and allied supply chains, including a bill introduced by Representative Haley Stevens (D-MI) that presents a “CHIPs-Like” federal policy framework to promote U.S. critical minerals development at the scale of recent semiconductor investment in the CHIPS Act.
This commentary outlines the critical minerals crisis as well as durable policy solutions to solve it for the critical minerals industry and its workers.
How Critical Minerals Are Produced
Critical minerals are widely distributed across the globe, so the global bottleneck lies not in access to the ore, but in the capacity to extract these elements and transform them into an industrially useful state. Today, mining is somewhat geographically dispersed. However, refinement and processing are far more concentrated—and here lies the United States’ primary exposure: China controls between 85 and 99 percent of global refining capacity for lithium, cobalt, and nickel, and REEs (a subset of critical minerals used for high-strength magnets and electronics). Control of these midstream steps has given Beijing powerful influence over the entire downstream manufacturing sector, leaving the United States almost entirely exposed in its reliance on overseas production of the U.S. Geological Survey’s top ten most critical minerals, as the chart below makes clear.
| U.S. GEOLOGICAL SURVEY’S TOP TEN MOST CRITICAL MINERALS |
| Mineral* |
Sector(s) |
% Domestic Production |
% Foreign Production |
| Samarium |
Defense, electronics, and renewable energy |
0% |
100% |
| Rhodium |
Automotive and industrial applications |
0% |
100% |
| Lutetium |
Medicine and security |
0% |
100% |
| Terbium |
Renewable energy, electronics, and lighting |
0% |
100% |
| Dysprosium |
Electric vehicles, renewable energy, and defense |
0% |
100% |
| Gallium |
Semiconductors, telecommunications, and solar energy |
0% |
100% |
| Germanium |
Optics, defense, and electronics |
>1% |
99% |
| Gadolinium |
Medical imaging and nuclear energy |
>2% |
99% |
| Tungsten |
Defense, electronics, and manufacturing |
0% |
100% |
| Niobium |
Transportation, infrastructure, and medical technology |
0% |
100% |
| * Minerals are listed in descending order by the U.S. Geological Survey’s estimate of the probability-weighted impact of supply disruptions on the U.S. economy.
Source: “Department of the Interior releases draft 2025 List of Critical Minerals,” U.S. Geological Survey, August 26, 2025, https://www.usgs.gov/news/science-snippet/department-interior-releases-draft-2025-list-critical-minerals. |
How China Cornered the Market
China’s dominance did not emerge by accident—it was the deliberate result of decades of strategic planning and targeted investment. In the 1980s, Beijing identified critical minerals as strategic resources of international importance and launched a multi-decade industrial policy to exert global control over the sector. This included heavy subsidization of extraction and processing, preferential loans, and tax breaks for domestic producers. By selling at below-market prices, China undercut global competitors, forcing non-Chinese-controlled mines and refiners out of business.
As a result, the skills, technology, and infrastructure to produce critical minerals outside of China’s operations atrophied. By the early 2000s, China had achieved near-monopoly status on the global market. Beijing’s willingness to weaponize this position—most recently by imposing export restrictions on seven rare earth minerals in response to U.S. tariffs during the 2025 trade negotiations—underscores the risks of allowing a single nation to dominate critical resource supply chains.
An Industrial Policy for U.S. Resilience
While recent federal measures offer important first steps toward reducing national exposure, from an industrial policy perspective they fall short of solving the problem. Securing reliable access to critical minerals requires a whole-of-supply-chain approach, ensuring that extraction, refining, and processing capacity exists domestically or within established allied nations. Achieving this will require U.S. policymakers to deliver on multiple critical priorities.
First, the United States must match China’s state-backed strategy by subsidizing a minimal level of production capacity to ensure that the United States can meet essential defense, energy, and manufacturing needs without relying on Sino-controlled supply chains. This investment must be maintained as long as China continues to deploy market-distorting measures.
Second, this approach must outlast the political cycle. Private industry will not commit capital to multibillion-dollar mining and refining projects if federal policy around subsidies and incentives will reverse with the next administration. Lawmakers must present a unified approach that signals to investors that this is a long-term national priority immune to partisan shifts. Stability in policy—grounded in consistent tax incentives, procurement commitments, and other tools—is essential to unlocking private investment.
Third, the U.S. must address the regulatory barriers that slow the opening of new mines and processing facilities. The current permitting process is slow, fragmented, burdened with overlapping requirements, and hampered by poorly defined procedures that make it difficult to identify the next step, creating uncertainty that deters venture capital and private industry from entering the sector (although it is worth noting that there is substantial investor interest in this sector). Establishing clear timelines, transparent standards, and coordinated federal–state permitting pathways will demonstrate that projects can move from proposal to production within a commercially viable window.
That said, any effort to rethink the regulatory process must first grapple with the reason the permitting process is so ambiguous and lengthy: mining, refining, and processing critical minerals is an inherently polluting and energy-intensive process—factors that have helped consolidate the industry in countries with weak environmental regulations. Even so, the technologies that critical minerals make possible—such as electric vehicles, renewable energy systems, and advanced energy storage—are central to reducing global greenhouse gas emissions and transitioning away from fossil fuels. When evaluated over their full life cycle, these technologies deliver substantial net environmental benefits compared to the carbon-intensive systems they replace. As such, the challenge is how to manage production in ways that minimize harm, ensuring that the broader environmental gains they enable are not undercut by avoidable local impacts.
Fourth, the U.S. must invest heavily in rebuilding the mining and processing workforce, combining a robust training and education pipeline with high-quality jobs that attract and retain skilled workers. This can be achieved by tying federal incentives to job-quality standards such as competitive wages, comprehensive benefits, worker voice, and strong workplace safety.
Fifth, federal investment should explicitly strengthen the institutions charged with protecting worker health and safety, such as the Mine Safety and Health Administration (MSHA) and the Department of Labor’s Bureau of International Labor Affairs (ILAB), by expanding their capacity for training, inspections, and oversight, to ensure that workplace standards keep pace with the demands of modern mining. Funding for these institutions should prioritize worker voice, including neutrality toward unionization, so that those on the front lines have both the protections and the platform needed to advocate for safe, fair, and sustainable working conditions.
Sixth, the United States should treat critical minerals with the same strategic foresight applied to oil, establishing a national reserve that can be drawn upon during periods of shortage or market disruption.
Lastly—and notably absent from many current policy discussions—is the need for parallel investment in substitutes for critical minerals, such as advanced nanomaterials capable of replicating their functions. Strategic investment into alternatives would reduce long-term dependence on fragile supply chains, limit the environmental harm associated with extracting, refining, and processing critical minerals, and position the United States at the forefront of next-generation materials innovation. This could be achieved by something similar to Operation Warp Speed, which leveraged public–private partnerships to accelerate the development of the COVID-19 vaccine.
Looking Ahead
The path forward raises several core policy questions that demand clear answers. How can the United States build enough domestic and allied capacity in extraction, refinement, and processing to secure its supply chains without replicating the environmental degradation that has plagued the sector globally? What level and form of public investment—whether subsidies, strategic reserves, or direct state financing—will be necessary to address China’s decades-long head start? How can regulatory reform balance the urgency of bringing new capacity online with the need for robust environmental and labor protections? And, critically, how will policymakers ensure that workforce development, job quality, and worker voice remain at the center of this strategy so that the benefits of a secure critical minerals supply chain are widely shared? The answers to these questions will determine whether the United States can meet the critical minerals challenge in a way that strengthens—not sacrifices—its economic, environmental, and social foundations.
While the Trump administration’s interest in critical mining is welcome, there are serious drawbacks to pursuing this agenda simply through deregulation and cost-cutting measures—approaches that risk tipping the balance between environmental benefit and harm toward unnecessary damage, while also disproportionately concentrating damage in marginalized communities and leaving unprotected workers to bear the greatest risks. This is a generational industrial policy challenge—meeting it will require bipartisan cooperation, long-term vision, and a commitment to mitigating the environmental and social cost of this inherently dangerous and polluting activity.
Tags: manufacturing, clean energy, critical minerals
The Critical Minerals Imperative: Competing in the Twenty-First-Century Resource Race
Critical minerals—such as lithium, cobalt, and rare earth elements (REEs)—are the building blocks of modern industry, underpinning technologies ranging from electric vehicle batteries to advanced defense systems. Their importance has grown exponentially as the global economy has moved toward electrification, digitalization, and clean energy technologies, making reliable access not merely an economic advantage but a national imperative.
Much like semiconductors, critical minerals are the unseen ingredient in scores of advanced manufacturing products. And, as with semiconductors, the United States has become increasingly reliant on international critical mineral suppliers, with impacts to national security and competitiveness in key sectors.
While critical mineral shortages have been flagged as an issue for years, bipartisan interest is intensifying and the federal government is taking steps to secure the supply chain, beginning with a recent agreement granting U.S. firms access to a range of elements in Ukraine. Additionally, as part of a new industrial strategy (direct state investment), the Office of Strategic Capital issued its first direct loan—a $150 million investment in MP Materials, the only operational critical minerals mining facility in the United States, and the U.S. Department of Energy released a funding opportunity of nearly $1 billion to scale “mining, process and manufacturing technologies.” Meanwhile, Congress is advancing a host of legislation to strengthen domestic and allied supply chains, including a bill introduced by Representative Haley Stevens (D-MI) that presents a “CHIPs-Like” federal policy framework to promote U.S. critical minerals development at the scale of recent semiconductor investment in the CHIPS Act.
This commentary outlines the critical minerals crisis as well as durable policy solutions to solve it for the critical minerals industry and its workers.
How Critical Minerals Are Produced
Critical minerals are widely distributed across the globe, so the global bottleneck lies not in access to the ore, but in the capacity to extract these elements and transform them into an industrially useful state. Today, mining is somewhat geographically dispersed. However, refinement and processing are far more concentrated—and here lies the United States’ primary exposure: China controls between 85 and 99 percent of global refining capacity for lithium, cobalt, and nickel, and REEs (a subset of critical minerals used for high-strength magnets and electronics). Control of these midstream steps has given Beijing powerful influence over the entire downstream manufacturing sector, leaving the United States almost entirely exposed in its reliance on overseas production of the U.S. Geological Survey’s top ten most critical minerals, as the chart below makes clear.
Source: “Department of the Interior releases draft 2025 List of Critical Minerals,” U.S. Geological Survey, August 26, 2025, https://www.usgs.gov/news/science-snippet/department-interior-releases-draft-2025-list-critical-minerals.
How China Cornered the Market
China’s dominance did not emerge by accident—it was the deliberate result of decades of strategic planning and targeted investment. In the 1980s, Beijing identified critical minerals as strategic resources of international importance and launched a multi-decade industrial policy to exert global control over the sector. This included heavy subsidization of extraction and processing, preferential loans, and tax breaks for domestic producers. By selling at below-market prices, China undercut global competitors, forcing non-Chinese-controlled mines and refiners out of business.
As a result, the skills, technology, and infrastructure to produce critical minerals outside of China’s operations atrophied. By the early 2000s, China had achieved near-monopoly status on the global market. Beijing’s willingness to weaponize this position—most recently by imposing export restrictions on seven rare earth minerals in response to U.S. tariffs during the 2025 trade negotiations—underscores the risks of allowing a single nation to dominate critical resource supply chains.
An Industrial Policy for U.S. Resilience
While recent federal measures offer important first steps toward reducing national exposure, from an industrial policy perspective they fall short of solving the problem. Securing reliable access to critical minerals requires a whole-of-supply-chain approach, ensuring that extraction, refining, and processing capacity exists domestically or within established allied nations. Achieving this will require U.S. policymakers to deliver on multiple critical priorities.
First, the United States must match China’s state-backed strategy by subsidizing a minimal level of production capacity to ensure that the United States can meet essential defense, energy, and manufacturing needs without relying on Sino-controlled supply chains. This investment must be maintained as long as China continues to deploy market-distorting measures.
Second, this approach must outlast the political cycle. Private industry will not commit capital to multibillion-dollar mining and refining projects if federal policy around subsidies and incentives will reverse with the next administration. Lawmakers must present a unified approach that signals to investors that this is a long-term national priority immune to partisan shifts. Stability in policy—grounded in consistent tax incentives, procurement commitments, and other tools—is essential to unlocking private investment.
Third, the U.S. must address the regulatory barriers that slow the opening of new mines and processing facilities. The current permitting process is slow, fragmented, burdened with overlapping requirements, and hampered by poorly defined procedures that make it difficult to identify the next step, creating uncertainty that deters venture capital and private industry from entering the sector (although it is worth noting that there is substantial investor interest in this sector). Establishing clear timelines, transparent standards, and coordinated federal–state permitting pathways will demonstrate that projects can move from proposal to production within a commercially viable window.
That said, any effort to rethink the regulatory process must first grapple with the reason the permitting process is so ambiguous and lengthy: mining, refining, and processing critical minerals is an inherently polluting and energy-intensive process—factors that have helped consolidate the industry in countries with weak environmental regulations. Even so, the technologies that critical minerals make possible—such as electric vehicles, renewable energy systems, and advanced energy storage—are central to reducing global greenhouse gas emissions and transitioning away from fossil fuels. When evaluated over their full life cycle, these technologies deliver substantial net environmental benefits compared to the carbon-intensive systems they replace. As such, the challenge is how to manage production in ways that minimize harm, ensuring that the broader environmental gains they enable are not undercut by avoidable local impacts.
Fourth, the U.S. must invest heavily in rebuilding the mining and processing workforce, combining a robust training and education pipeline with high-quality jobs that attract and retain skilled workers. This can be achieved by tying federal incentives to job-quality standards such as competitive wages, comprehensive benefits, worker voice, and strong workplace safety.
Fifth, federal investment should explicitly strengthen the institutions charged with protecting worker health and safety, such as the Mine Safety and Health Administration (MSHA) and the Department of Labor’s Bureau of International Labor Affairs (ILAB), by expanding their capacity for training, inspections, and oversight, to ensure that workplace standards keep pace with the demands of modern mining. Funding for these institutions should prioritize worker voice, including neutrality toward unionization, so that those on the front lines have both the protections and the platform needed to advocate for safe, fair, and sustainable working conditions.
Sixth, the United States should treat critical minerals with the same strategic foresight applied to oil, establishing a national reserve that can be drawn upon during periods of shortage or market disruption.
Lastly—and notably absent from many current policy discussions—is the need for parallel investment in substitutes for critical minerals, such as advanced nanomaterials capable of replicating their functions. Strategic investment into alternatives would reduce long-term dependence on fragile supply chains, limit the environmental harm associated with extracting, refining, and processing critical minerals, and position the United States at the forefront of next-generation materials innovation. This could be achieved by something similar to Operation Warp Speed, which leveraged public–private partnerships to accelerate the development of the COVID-19 vaccine.
Looking Ahead
The path forward raises several core policy questions that demand clear answers. How can the United States build enough domestic and allied capacity in extraction, refinement, and processing to secure its supply chains without replicating the environmental degradation that has plagued the sector globally? What level and form of public investment—whether subsidies, strategic reserves, or direct state financing—will be necessary to address China’s decades-long head start? How can regulatory reform balance the urgency of bringing new capacity online with the need for robust environmental and labor protections? And, critically, how will policymakers ensure that workforce development, job quality, and worker voice remain at the center of this strategy so that the benefits of a secure critical minerals supply chain are widely shared? The answers to these questions will determine whether the United States can meet the critical minerals challenge in a way that strengthens—not sacrifices—its economic, environmental, and social foundations.
While the Trump administration’s interest in critical mining is welcome, there are serious drawbacks to pursuing this agenda simply through deregulation and cost-cutting measures—approaches that risk tipping the balance between environmental benefit and harm toward unnecessary damage, while also disproportionately concentrating damage in marginalized communities and leaving unprotected workers to bear the greatest risks. This is a generational industrial policy challenge—meeting it will require bipartisan cooperation, long-term vision, and a commitment to mitigating the environmental and social cost of this inherently dangerous and polluting activity.
Tags: manufacturing, clean energy, critical minerals