The US wants to get its hands on critical minerals — whether through a deal (now in limbo) with Ukraine or domestic production.
On Tuesday President Donald Trump teased efforts to produce more critical minerals required for everything from semiconductors to aerospace and defense.
“Later this week, I will also take historic action to dramatically expand production of critical minerals and rare earths here in the USA,” Trump said on Tuesday during his speech in front of Congress.
Industry watchers point to more than 50 critical minerals identified by the US Geological Survey needed for nearly every type of modern technology, with a subset of those referred to as “rare earth” minerals — essential for magnets that go into everything from consumer electronics to EVs and even electrical grids and defense hardware.
“The entire power generation system in the United States and the expansion that is required for AI and data center buildout is extremely dependent on critical minerals,” said Akshay Dubey, CEO of CVW CleanTech, which has developed a technology for the production of critical minerals, including titanium and rare earths, from oil sands waste.
While the US produces significant amounts of aluminum, zinc, and magnesium, other critical minerals like cobalt, nickel, and graphite are imported from abroad. China accounts for roughly 60% of global reserves and 85% of processing capacity and has been aggressively investing in critical minerals projects for the past 20 years.
In a retaliatory move against the Trump administration’s recent tariffs on China, Beijing tightened controls over the exports of critical minerals.
“The Chinese understood very early that critical minerals, including rare earths, are going to be the building blocks for most advanced manufacturing going forward,” said Pini Althaus, mining executive and founding partner of Cove Capital. “The US is almost 100% reliant on China on critical minerals.”
In recent years, the US has increasingly focused on developing its own critical mineral access, with the Biden administration launching a review of US critical mineral supply chain vulnerabilities. That led to incentives offered in the Inflation Reduction Act to encourage domestic production.
Getting to domestic minerals is a challenge. It can take, on average, more than 15 years to turn a deposit into an operating mine where extractions are taking place. Dubey cites lengthy permitting processes as one of the main challenges.
“The frustration for industry and the challenge for industry has been no clear path to permitting,” said Dubey.
Story Continues
“If you’re sitting as a CEO of one of these [mining] companies and you have to make a decision of whether to start investing the capital, you don’t want to be in the situation where halfway through construction you have a new administration come in and they challenge the permits,” said Dubey.
Any announcement this week by Trump would come on the heels of a minerals deal with Ukraine that went sideways last Friday when a meeting between President Trump and Ukraine’s leader, Volodymyr Zelensky, turned into a shouting match. The US wants to broker a peace deal between Ukraine and Russia.
On Tuesday in front of Congress, Trump said he received a letter from Zelensky saying Ukraine is “ready to sign” the minerals agreement.
Ukraine is estimated to hold roughly 5% of the world’s critical mineral reserves, according to the UN.
Critical minerals in Ukraine.
The country’s main critical minerals include graphite used in batteries, lithium commonly used for rechargeable batteries, titanium inside aircraft and weaponry, and uranium necessary for nuclear reactors. Ukraine is also the world’s fifth-largest producer of gallium, which is commonly found inside semiconductors.
In the agreement as it stood last Friday, the US would receive 50% of all future revenues from Ukraine’s minerals, hydrocarbons, oil and gas, and other extractable materials.
Getting to all the minerals, though, may be a challenge. For example, a primary lithium resource is located in Donetsk, a region occupied by Russia.
Additionally, the extraction of rare earth minerals in Ukraine appears to be in the very early stages of development. Althaus said that it would take significant time and investment to see if the quantities available justify the costs of the extraction process.
While a deal involving Ukraine’s critical minerals would be viewed as a big step, industry watchers are in a wait-and-see mode.
“This would weaken China’s monopoly over rare earths, but it would be a stretch to say that this would entirely offset China’s control,” said Mark Temnycky, nonresident fellow at the think tank Atlantic Council’s Eurasia Center.
“It would be a start to America’s involvement in the rare earths race, however,” he added.
Bucket-wheel excavators mine rare earth materials on Ukrainian soil on Feb. 25 in the Zhytomyr region of Ukraine. Despite the ongoing war, many mining companies across the country have continued their operations, extracting resources such as titanium, graphite, and beryllium. (Kostiantyn Liberov/Libkos/Getty Images) ·Libkos via Getty Images
Ines Ferre is a senior business reporter for Yahoo Finance, focusing on energy, commodities and industrials Follow her on X at @ines_ferre.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
