U.S. Critical Minerals Supply Strategy to Reduce China Dependence | Shale Magazine

U.S. critical minerals supply

The United States aims to strengthen its supply of critical minerals as demand is expected to continue growing at an accelerated rate in the coming decades. It will achieve this by diversifying supply chains to strengthen regional links and developing its domestic mineral production. 

What are Critical Minerals?

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. 

Critical minerals are used for a wide range of applications, with rising demand for critical minerals being seen in the energy sector, particularly in renewables. Lithium, nickel, cobalt, manganese, and graphite are all used in battery production, while rare earth elements are needed for the permanent magnets used in wind turbines and EV motors, and electricity networks rely heavily on aluminum and copper. The tech sector also relies heavily on critical minerals. 

Demand for critical minerals increased significantly in 2024, with lithium demand rising by 30%, while the demand for nickel, cobalt, graphite, and rare earths rose by between 6% and 8%. The U.S. Department of Energy lists a total of 50 critical minerals, while the European Union’s list includes 34.

Difficulties in Ensuring Supply

Just a few countries have come to dominate the global supply of most of the world’s critical minerals. Cobalt is mainly mined in the Democratic Republic of Congo, while China holds around 40% of the world’s rare earth metals, followed by Vietnam and Brazil with around 20 percent each, and copper can be found in 56 countries, with Chile and Peru contributing 28% and 10% of production, respectively. 

Despite being sourced from various places around the globe, China dominates the production and refining of most of the world’s critical mineral supply. China has the highest refining capacity of aluminum, cobalt, copper, graphite, lithium, manganese, nickel, polysilicon, rare earths, and steel. 

Therefore, the United States remains heavily dependent on the import of critical minerals to meet its growing demand. China supplies over 50% of the U.S. demand for 21 nonfuel mineral commodities, according to the 2025 USGS report, while Canada supplies 21 such minerals, followed by Germany (11); Brazil (10); and Japan, Mexico, and South Africa (seven each). The report showed that the U.S. is 100% import-dependent on 12 minerals classified by the U.S. government as critical, and more than 50% import-dependent on 28 additional minerals.

U.S. Government Vowed to Invest in Securing Minerals

The Trump administration aims to reduce the U.S. dependence on imports by developing regional supply chains and increasing the domestic production and refining of critical minerals. 

In July, the U.S. Department of Defense announced plans to continue investing in critical mineral projects to ensure the national supply needed for weapons and electronics. This followed the signing of a multibillion-dollar deal by the Pentagon to become the largest shareholder in rare earths producer MP Materials. The Department of Defense emphasized its willingness to “share the risk” with private companies when it comes to investments in critical minerals. 

To date, the Pentagon has invested nearly $540 million into critical minerals projects and plans to continue investing in the sector, according to an official from the Department of Defense. “Rebuilding the critical minerals and rare earth magnet sectors of the U.S. industrial base won’t happen overnight, but (the Pentagon) is taking immediate action to streamline processes and identify opportunities to strengthen critical minerals production,” they stated. 

DoE to Invest $1 Billion in Sector

In August, the U.S. Department of Energy (DoE) announced a nearly $1 billion investment in the advancement and scaling of mining, processing, and manufacturing technologies across key stages of the critical minerals and materials supply chains. This aligns with President Trump’s Executive Order Unleashing American Energy and is aimed at ensuring a more secure, predictable, and affordable supply of critical minerals and materials to enhance U.S. energy dominance, national security, and industrial competitiveness.

The U.S. Secretary of Energy, Chris Wright, stated, “For too long, the United States has relied on foreign actors to supply and process the critical materials that are essential to modern life and our national security.” Wright added, “The Energy Department will play a leading role in reshoring the processing of critical materials and expanding our domestic supply of these indispensable resources.”

The funding will contribute to a wide range of areas in the sector, including a critical minerals and materials accelerator, a mines and metals capacity expansion, a rare earth elements demonstration facility, a battery materials processing and battery manufacturing and recycling grant program and the recovery of critical minerals from industrial wastewater.

Over the coming decades, the U.S. aims to significantly expand domestic critical mineral production and processing, as well as diversify its supply chains, to reduce its reliance on China. The Trump administration aims to do this through conventional mining projects as well as more controversial operations. 

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