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The United States is brandishing billions of dollars in funding from recent laws to reduce the security threat from the West’s dependence on China for critical minerals, panelists told The Northern Miner’s Energy Transition Metals Summit in Washington, D.C.
The Inflation Reduction Act, the Bipartisan Infrastructure Law, the Defense Production Act and the National Defense Authorization Act are helping boost domestic production and processing capabilities. These include tax credits for mineral processing and battery manufacturing and consumer credits for clean vehicles sourced from allied nations.
“The U.S. is import-reliant on more than half of the 50 critical minerals identified by the U.S. Geological Survey, with a significant portion sourced almost exclusively from China,” Alex Jacquez, special assistant to the President for Economic Development and Industrial Strategy, said in an April 30 session. “If supply chains are disrupted, it could impact our ability to produce essential defence materials and technologies, leaving us vulnerable during conflicts and crises.”
As the West builds critical metals supply chains that challenge China’s market dominance, the reality is stark: China maintains significant control over global critical minerals processing capacity and the materials the rest of the world needs for the energy transition. This dependency poses serious security and economic stability risks, prompting the U.S. and its allies to take strategic measures to ensure supply chain resilience.
“We are focusing on building resilient supply chains and creating markets protected from lower-cost, lower-standard production,” Jacquez said.
The summit ran in coordination with Precious Metals Summit Conferences. Watch the full discussion below.
Moderated by The Northern Miner’s western editor, Henry Lazenby, the ‘Supply chain security’ panel explored the implications of China’s market dominance and the steps the U.S. and its allies are taking to mitigate risks and ensure a stable critical minerals supply. The panel’s experts noted an urgency in developing transparent, sustainable, and secure supply chains for critical minerals, assessing key government policies driving the change.
“We need to prioritize high-standard projects to create a diverse and secure supply chain,” said Abigail Hunter of the Wshington, D.C.-based non-governmental organization SAFE’s Ambassador Alfred Hoffman Jr. Center for Critical Minerals Strategy during an April 30 panel. “We must capture the real cost of extracting, mining, and processing these materials to establish a resilient system.”
In November, the minerals center and the State Department signed the Minerals Investment Network for Vital Energy Security and Transition, or the MINVEST initiative, which brings the private sector to the table to support the goals of the Mineral Security Partnership. It is a collaboration is designed to align public sector finance tools, such as export credit agencies and development finance institutions, to attract private sector capital.
MINVEST plans to create resilient and diverse supply chains for critical minerals while ensuring projects meet stringent environmental and ethical standards.
One example of a successful U.S. government collaboration is the partnership between Ultium Cells and the Department of Energy’s Loan Programs Office, which has created 4,000 jobs and aims to strengthen the U.S. battery supply chain by shifting from reliance on Asian sources to more domestic and North American feedstock.
Joe Sopcisak, a technical officer for the Assistant Secretary of Defense, described the DPA.
“We are providing investment for companies across the supply chain, from exploration to end-component production,” Sopcisak said.
The Department of Defense has made investments ranging from single million-dollar amounts to over $100 million, covering various supply chain stages, including pilot projects, feasibility studies, and actual mine construction.
Meanwhile, the 2024 National Defense Authorization Act expanded the definition of domestic sourcing in the DPA to include the United Kingdom, Australia and Canada to secure allied supply chains.
This includes grants, purchase commitments and other financial tools to spur investment and ensure the U.S. military has the necessary resources. Sopcisak said the national defence stockpile was important in mitigating supply chain risks but noted its limitations.
“The stockpile can only hold materials identified as shortfalls, and we need new legislation to create a broader national security stockpile,” he explained.
The panel also discussed the urgent need for workforce development to meet future demands. Addressing this gap is essential for building a strong supply chain and ensuring the U.S. can achieve its energy transition goals.
“We aren’t graduating enough geologists or mining engineers to meet our 2030, 2035, and 2040 goals,” Sopcisak said.
Hunter echoed this sentiment, emphasizing the importance of training and developing the workforce needed to support the critical minerals sector. “We need to build the workforce exponentially to meet the demands of the green energy transition,” she said.
