U.S. Officials Sound Alarm: Critical Minerals Stockpile, Mining Investment, and Risk Insurance Key to Countering China’s Dominance

As the global race for critical minerals intensifies, U.S. officials are sounding an urgent alarm: the nation’s heavy reliance on China for minerals vital to defense, clean energy, and technology poses a dire threat to national and economic security. China controls approximately 60% of global rare earth mining and over 90% of processing capacity, creating a strategic chokehold on supply chains for lithium, cobalt, nickel, and rare earth elements essential for electric vehicle (EV) batteries, semiconductors, and military systems. To break this dependence, officials, led by Interior Secretary Doug Burgum, are pushing a multifaceted strategy: establishing a national critical minerals stockpile, investing directly in domestic mining companies, and creating a sovereign risk insurance fund to protect against policy volatility. These measures, announced in April 2025, aim to bolster U.S. competitiveness, but challenges like environmental concerns, high costs, and geopolitical risks loom large.

China’s Grip on Critical Minerals: A Strategic Vulnerability

China’s dominance in critical minerals is the result of decades of strategic investments, lax environmental regulations, and state-backed industrial policies. In 2024, China accounted for 85–90% of rare earth refining, 68% of cobalt, 65% of nickel, and 60% of lithium processing for EV batteries. This control allows Beijing to manipulate markets, as seen in its 2023 export controls on gallium and germanium and reported threats to cut off rare earth supplies to U.S. firms. Such actions, combined with China’s ability to flood markets with low-cost minerals, have collapsed prices, making it nearly impossible for U.S. companies to compete, according to Burgum.

The stakes are high. Critical minerals like neodymium power F-35 flight control systems, gallium-arsenide chips drive electronic warfare, and antimony is vital for ammunition. A 2025 Center for Strategic and International Studies (CSIS) report warned that China’s export controls could widen the gap in military readiness, with Beijing acquiring advanced weapons systems five to six times faster than the U.S. The U.S. imports over 50% of 51 nonfuel minerals and is fully reliant on foreign sources for 15, with China supplying over 90% of rare earth elements. This dependency, coupled with limited domestic refining capacity, leaves the U.S. vulnerable to supply chain disruptions, especially in a potential conflict.

The U.S. Response: A Three-Pronged Strategy

To counter China’s dominance, U.S. officials are advocating a bold approach outlined by Burgum at the Hamm Institute for American Energy conference in April 2025. The strategy includes:

• Critical Minerals Stockpile: Modeled after the Strategic Petroleum Reserve, a national stockpile would allow the U.S. to buy minerals during global oversupply to stabilize prices and secure long-term reserves. The National Defense Stockpile (NDS), valued at $1.5 billion and holding 47 commodities, has been bolstered by $1 billion from Congress in 2022 to acquire strategic materials. However, current reserves are inadequate for great power competition, covering only a fraction of defense needs.

• Mining Investment: The Trump administration is considering direct equity investments in domestic mining and processing firms to scale production. “We should be taking some of our balance sheet and making investments,” Burgum said, proposing a sovereign wealth fund to support companies challenging China’s market control. Recent initiatives include $600 million from the Defense Production Act to expand mineral access and $20 billion to boost domestic crane production, reducing reliance on Chinese equipment.

• Sovereign Risk Insurance: To protect companies from policy shifts, a federal insurance fund would reimburse firms if future administrations cancel approved projects. “Think of it like an insurance market backed by the federal government,” Burgum explained, noting that such a mechanism would ensure financial stability for investors facing political risks in Washington.

These proposals build on prior efforts, including President Biden’s 2021 Executive Order 14017, which identified supply chain vulnerabilities, and the Inflation Reduction Act (IRA), which allocated $8.5 billion for domestic mineral activities. The IRA’s Clean Vehicle Tax Credit incentivizes sourcing from the U.S. or free-trade partners, excluding China.

Challenges and Criticisms

Despite these ambitions, the U.S. faces significant hurdles. Domestic mining projects are costly and face long lead times, with volatile mineral prices deterring private investment. The U.S. lacks sufficient refining infrastructure, with China processing nearly all germanium, gallium, and tungsten. Environmental concerns also complicate efforts, as seen in opposition to Trump’s April 2025 executive order fast-tracking deep-sea mining, which Greenpeace criticized for bypassing United Nations regulations and risking ecological damage. U.S. waters hold over 1 billion metric tons of seabed minerals, but untested environmental impacts raise concerns.

Geopolitical risks add complexity. China’s influence in mineral-rich countries like the Democratic Republic of Congo, where it owns stakes in 15 of 19 cobalt mines, limits U.S. access. The Minerals Security Partnership (MSP), launched in 2022 with allies like Australia and Canada, aims to diversify supply chains but excludes Latin American nations, raising concerns about equitable collaboration. Posts on X reflect industry urgency, with users like @SecretaryBurgum emphasizing the need to “mine, baby, mine” to compete with China, while others highlight the importance of allied partnerships.

Smaller operators face compliance burdens, with estimated costs of $80 million annually for new cybersecurity regulations in related sectors like maritime, suggesting similar challenges for mining. The U.S. International Development Finance Corporation (DFC) has invested in projects like a $105 million stake in TechMet for EV metals, but its focus on low-income countries limits support for key mineral producers like Chile and Australia.

Global Context and Allied Efforts

The U.S. is not alone in its push for mineral security. Australia, Canada, and the EU are implementing stricter scrutiny of Chinese investments, with Canada ordering divestitures of Chinese stakes in mineral firms in 2022. The EU and NATO, learning from Russia’s energy coercion, view China’s mineral dominance as a similar risk. Japan and South Korea are scaling up processing, but their proximity to China and capacity constraints limit their ability to fully support U.S. needs.

The global critical minerals market, valued at $650 billion in 2024, is projected to grow with demand for clean energy technologies increasing mineral production by 500% by 2050, according to the World Bank. Latin America, holding half of global lithium reserves, is a key battleground, with the U.S. leveraging free-trade agreements with Chile, Colombia, and Peru to secure supplies. However, China’s $170 billion in African mining loans over two decades dwarfs U.S. investments, highlighting the scale of the challenge.

Conclusion

U.S. officials’ call for a critical minerals stockpile, mining investment, and risk insurance reflects a strategic pivot to counter China’s dominance and secure supply chains vital to national security and the clean energy transition. While initiatives like the NDS, IRA, and proposed sovereign wealth fund signal progress, the U.S. must overcome high costs, environmental concerns, and geopolitical competition to build resilience. The Schweers’ use of USDA crop insurance in New Mexico illustrates the value of risk mitigation in volatile industries, a principle the mining sector must adopt. As @ShahriyarGourgi noted on X, collaboration with allies will be crucial to competing with China and ensuring a stable, diversified supply of critical minerals.