Key Takeaways
President Trump’s goal for the United States to mine and process its own critical minerals by January 1, 2027, may need to slip as American companies ramp up.
U.S. miners and processors are not yet ready to supply the quantity needed to meet demand due to the complexity of processing and the challenges of getting mining operations of that magnitude up and running, although they are making great strides.
The United States and many of its western allies offshored mineral mining and processing, which China and other nations were able to dominate due to their cheap energy and lax environmental regulations.
In the short term, the United States will still need to rely on China, which has dominated the minerals industry by subsidizing its producers and undercutting American mineral prices.
The Trump Administration has been seeking purchase agreements and loans with producers to rebuild mineral capacity in the United States.
President Trump wants to end U.S. reliance on Chinese critical minerals by January 1, 2027, but it is unlikely American miners and processors will be ready by then. The Trump administration has spent tens of billions of dollars on nearly 150 minerals companies to loosen China’s hold on supply chains for weapons and other strategic products essential for the nation. The January 1, 2027, deadline is the date under federal regulations to stop purchasing rare earths, magnets, tungsten, molybdenum, and tantalum from China, Russia, Iran, or North Korea. The United States has been trying to limit critical mineral imports for years but has had to grant companies waivers because U.S. industries involved have been unable to meet demand. Recently, President Trump signed an executive order making it even harder for defense contractors to obtain waivers. According to Trump’s executive order, waivers can only be issued if a contractor shows an “exhaustive effort” to avoid Chinese material and has a timeline for weaning itself off such supply.
The difficulty of weaning the U.S. off dependence on Chinese supplies can be seen in the following example. In 2025, U.S. demand for the most common type of rare earth magnet was about 48,000 metric tons while domestic sources supplied 300 metric tons. U.S. firms are now on track to have the capacity to produce 5,000 metric tons by year-end, but that is a far cry from the amount of demand. Rare earths, which are among the 60 minerals considered critical by the government, must be processed before they are turned into magnets used to make weapons, automobiles, computers and other products. That processing is resource-intensive and an area where China dominates, thanks to its cheap coal power and lax environmental regulations.
Further, U.S. firms have not produced tungsten since 2015 and tantalum since 1959. Guardian Metal Resources is working to open a U.S. tungsten mine by 2028, while Lion Rock Resources is developing a tantalum mine in South Dakota, with no timeline for opening, but both are beyond the 2027 date.
The United States has reserves of most critical minerals, but it lacks the capacity to mine and process many of them. China grew to dominate the minerals-refining industry in the late 20th century and controls more than 80% of the sector today. The International Energy Agency warned recently that $6.5 trillion of global manufacturing is at risk if China imposes export restrictions on rare earths, as it has done periodically in recent years. U.S. rare earths investment has been hindered by persistently low prices because China has been subsidizing its producers and flooding the market with cheap products, thus making American projects unprofitable. Control of markets allows China to respond to the opening of a U.S. mine or processing facility by flooding the market with its own material, which drives down world prices and renders the new facility uneconomic. Technological breakthroughs can help drive price drops when they occur.
Ucore Rare Metals, a minerals-refining startup backed by the War Department, has developed a processing technology known as RapidSX that is similar to, but faster, cleaner, and cheaper than, the industry-standard solvent extraction. Ucore had planned to start refining by 2025, but production will not begin until 2027 at the earliest, as it had to rework its plans due to changing demands from the War Department, according to the company.
In February, the Trump administration launched Project Vault, a $12 billion effort to stockpile critical minerals for American manufacturers. Later, officials acknowledged that they will need to initially buy minerals from abroad, including China. Defense contractor Lockheed Martin provided the Department of War with a list of minerals it would like stockpiled, as defense contractors need to place orders. Nick Myers, CEO of Massachusetts-based Phoenix Tailings, a minerals startup that recently received a $500 million loan from the War Department to build a processing facility, said, “Defense contractors have just assumed they can keep buying Chinese products. The defense industry is never going to stop if you keep giving waivers.”
The complexity of mineral refining has slowed U.S. projects. Among the biggest U.S. companies is MP Materials, which is financially supported by the War Department. The company spent years calibrating its solvent extraction processing equipment, part of what CEO Jim Litinsky described as a “painstaking” process. MP built a magnet facility in Texas and expects to have magnets approved for its first customer, General Motors, by the end of the year. A separate magnet facility that MP is building for the Department of War is slated to open in 2028.
In Marion, Indiana, ReElement Technologies plans to process minerals using a technology common in the pharmaceutical industry known as chromatography. The technology has never been used to process large volumes of minerals. ReElement is planning to build the capacity to process 10,000 metric tons of germanium or other minerals this year. According to ReElement CEO Mark Jensen, the company’s germanium production is “profitable at any volume.” ReElement received a $25 million investment from the Department of War.
Another company, USA Rare Earth, spent more than five years studying chromatography before pivoting to solvent extraction. USA Rare Earth is building a South Carolina magnet facility. Energy Fuels, which recently received a $725 million loan from the Department of War, plans to be processing small amounts of rare earths by the end of the year and 6,000 metric tons annually by 2029. It is buying an existing U.S. magnet producer. Ucore, Energy Fuels and ReElement have each agreed to supply rare earths to magnet maker Vulcan Elements, which is building a North Carolina manufacturing plant, slated to open by 2030.
Conclusion
President Trump wants the United States to mine and process its own critical minerals by January 1, 2027, and stop purchasing from China, Russia, Iran and North Korea. But U.S. miners and processors are not ready to supply the quantity needed to meet demand due to the complexity of processing and the challenges of getting mining operations of that magnitude up and running, particularly amid changing requirements. The United States will still need to rely on China, which has dominated the minerals industry by subsidizing its producers and undercutting American mineral prices.
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