A rare point of bipartisan consensus in American politics today is that critical minerals and rare earth elements are vital to national defence and to leading the industries of the future. They are essential to semiconductors, data centres, fibre optic communications, artificial intelligence and many civil and defence applications.
But the world’s needs are also a vulnerability, because the critical mineral supply chains are dominated by China. It extracts, processes or controls more than 70 per cent of the world’s cobalt and lithium and nearly all the graphite on the market. It is also the leading refiner of 19 of the 20 most important industrial minerals.
This chokehold is the result of a decades-long strategy. From 2000 to 2021, Beijing channelled almost $57 billion into mineral extraction and refining across nearly 20 countries in Africa, Latin America and Asia. By contrast, Congress shut down the US Bureau of Mines in 1996. In 2024, the United States accounted for only 1 per cent of global critical mineral production.
Closing the gap with China will require a coordinated approach from Washington, its partner countries and the private sector. Until recently, such an approach was lacking in the Trump administration, whose rhetoric against Canada, Ukraine, Greenland and other producing nations complicated an already difficult task. In the past few weeks, however, Congress and the White House have proposed complementary roadmaps which contemplate greater collaboration with international allies, and that, if implemented, could begin to loosen China’s grip.
Predatory pricing
As many countries have learned, China is not shy about using its critical minerals preeminence for political ends. In 2010 it cut off rare earth exports to Japan over the disputed Senkaku Islands. Most recently Beijing imposed new restrictions on rare earths and magnets after remarks from Japan’s prime minister about the importance of Taiwan’s security.
In response to Trump’s ‘Liberation Day’ tariffs, last year China slapped controls on a dozen rare earths exported to the US and later broadened them to cover any ‘parts, components and assemblies’ containing Chinese rare earth materials or produced with Chinese critical minerals technology. Even after US stock markets plunged and the Trump administration rolled back many tariffs, China kept some of its controls in place. Trump’s rhetoric on China has been more circumspect since.
Beijing has also undermined western efforts to diversify supply chains through ‘predatory pricing’. In 2024, as global lithium demand rose by almost 30 per cent, Chinese exports grew even faster, driving down prices by 80 per cent and forcing projects in the US, Canada and Australia to close. That year demand for nickel, cobalt and graphite rose by 6 per cent to 8 per cent, but graphite and cobalt prices dropped by nearly 20 per cent while nickel fell by 10 per cent. Beijing’s strategy worked. Despite the sizable jump in demand, 2024 saw critical minerals global investments rise by only 2 per cent above inflation. In the past few years supply chains have become even more concentrated.
The Minerals Security Partnership
To address this vulnerability, the Biden administration relied on two competitive advantages: the private sector and international allies. It launched the Minerals Security Partnership (MSP) in 2022, which brought together 14 countries and the European Union, comprising more than half of the world’s GDP and 60 per cent of minerals demand. Australia, Germany, France, India, the UK, Canada, Japan and South Korea were among its earliest members.
The objective of the partnership was to spur public and private investments in strategic critical minerals projects through financial, diplomatic and strategic support. It pursued these goals by sharing information about potential projects with partner governments, investors and banks, facilitating investments by public finance agencies, promoting higher environmental, social and governance standards as part of our better offer to producing countries, and expanding recycling opportunities. At the suggestion of the EU, we added the ‘MSP Forum’ to help producing nations tackle obstacles to foreign investment and attract investors.
In an industry where mining investments take decades to materialize, the MSP was successful even in its infancy. Two years after its inception its working groups had reviewed more than 200 projects and supported over 30 of them. It also convened more than 100 private sector investors and financing institutions in Argentina and Chile to hear directly from government officials and held a session in Greenland that led to an agreement with a local developer.
In 2023 when China imposed export restrictions on germanium, a mineral key to semiconductors, integrated circuits and infrared vision equipment, the MSP midwifed a deal with Japan that increased the global supply of germanium by nearly 25 per cent. Analysts in China have taken notice. Several government mouthpieces have portrayed the MSP as the primary mechanism of industrial countries to de-risk critical minerals investments. A few even labelled it a ‘Metals NATO’ designed to ‘de-Sinicize’ critical minerals supply chains. Such criticism is a testament to the potential of the MSP.
Enter Trump 2.0
The second Trump administration recognized the dangers posed by the concentration of critical mineral supply chains early on. In March 2025, it announced plans to expedite permitting approvals and mobilize investments in domestic mining projects. By its count, Washington has taken equity stakes in and provided financial support exceeding $30 billion to a handful of US mining and refining companies. It has also signed ‘framework agreements’ with consuming and producing countries, including Japan, Australia and Argentina. In reports to Congress and joint statements with South Korea and Japan, the administration has expressed support for the MSP.
Nevertheless, the Trump administration’s approach at the international level has been erratic and at times counterproductive. It has opted to engage potential partners bilaterally through a hub-and-spoke architecture with the US at the centre. Several of the framework agreements announced have not been finalized or published, and the compacts with Australia and Japan are little more than aspirational.
The administration threatened to annex Canada, a founding MSP member and a leading cobalt, uranium, lithium, nickel and graphite producer, and seize Greenland, whose rare earth resources rank eighth in the world. It required Ukraine – home to Europe’s largest uranium and lithium deposits – to share the benefits of its critical mineral resources in return for US support against Russia’s invasion.
Never mind that Canadians do not want to be the 51st state, that Greenlanders refuse to become colonial subjects, and that Ukrainians facing an existential threat were in no position to reject a shakedown. In the eyes of some experts, the Trump administration’s investments seem to have been chosen ‘by whim’, with ‘almost no serious review’. Faced with the US go-it-alone approach, other countries have also flown solo. The EU has signed partnerships with more than 14 countries and targeted 47 strategic projects under its 2024 Critical Raw Materials Act. Australia, Canada, France, Germany, Britain and the United Arab Emirates have also pursued bilateral agreements with producing nations.
Three initiatives
After a year of inflammatory rhetoric from the Trump administration and legislative inaction, the first weeks of 2026 have seen a flurry of initiatives from the White House and Congress. If implemented, these could substantially improve the chances of reducing America’s critical minerals vulnerability and benefit our international partners.
Last month the White House announced plans to create ‘Project Vault’, a $12 billion public-private partnership to procure and store critical minerals across the US for commercial use by the private sector in the event of market disruptions. Days later, at a Critical Minerals Ministerial event in Washington attended by more than 50 countries and the EU, the State Department unveiled the outline of the Forum on Resource Geostrategic Engagement (Forge).
Described by Marco Rubio, the US Secretary of State, as the ‘successor to the Minerals Security Partnership’, Forge combines the objectives of the MSP with subsidies, standards and a preferential trading zone among producing and consuming countries that will be insulated from China’s oversupply through price floors enforced by adjustable tariffs. The creation of a trading zone echoes another bipartisan bill introduced last year, the Restoring American Minerals Security Act of 2025. Forge’s focus on creating a coalition of like-minded countries has led some Washington analysts to wonder if the Trump administration has ‘rediscovered multilateralism’
The Project Vault and Forge announcements followed the introduction in January in the House of Representatives of the Dominance Act – the Developing Overseas Minerals Investments and New Allied Networks for Critical Energies Act – which already has more than a dozen supporters in Congress from both sides of the aisle.
The proposed legislation empowers the president to negotiate international critical minerals agreements and authorizes US participation in the MSP – presumably Forge now – and the networks created by the MSP to engage the private sector, public financing institutions and producing countries. While prioritizing domestic production, the act acknowledges the need to ‘collaborate with allies and partners to build secure and resilient critical minerals supply chains’.
Critically, the Dominance Act establishes as a principal negotiation objective the adoption of best practices to protect labour rights, the environment and the safety of mining communities in producing countries, as well as the need for the citizens of mineral-rich nations to benefit from mining investments. It is a recognition that promoting high standards in the mining industry is not an ideological slogan but a calling card. We will not win a race to the bottom with China, but if we can change the terms of the debate by raising standards, our offer will appeal to producing countries.
Improving the offer
These three initiatives build on the efforts of previous administrations and advance a comprehensive strategy to achieve critical minerals independence. They share a sense of urgency and should be welcomed. As the White House and Congress move to align them, however, they should address the following gaps:
First, early-stage funding is key. Project Vault focuses on stockpiling but not on early-stage financing , the Forge announcement did not address funding, and an earlier version of the Dominance Act that allocated $75 million to the MSP did not make it into the bill introduced in Congress. But as the MSP learned, seed funding is often the insurmountable hurdle in an industry in which only one in a thousand-plus projects survives a feasibility study and start-up costs are high. For that reason, France, Germany, India and others recently announced multi-billion-dollar funds to seed critical minerals ventures. For any strategy to succeed, our private sectors will need substantial early-stage government support.