Highlights
- President Trump proposes an aggressive strategy to reduce U.S. dependency on China for critical minerals and rare earth elements.
- The plan aims to accelerate domestic mining and processing infrastructure.
- Significant economic and regulatory challenges are faced.
- The proposal highlights national security needs.
- Lacks comprehensive execution strategy for achieving true mineral independence.
President Donald Trump has unveiled an ambitious plan to expand U.S. critical mineral and rare earth production, positioning it as a national security necessity to curb reliance on China and BRICS nations. Industry players such as NioCorp Developments Ltd (opens in a new tab). (NASDAQ: NB) have lauded the initiative, arguing that it could accelerate projects like the Elk Creek Critical Minerals Project in Nebraska. However, while the proposal signals a shift toward resource independence, its assumptions and execution challenges raise serious questions about feasibility.
At its core, Trump’s strategy mirrors his broader economic nationalism and supply chain security agenda, focusing on massive investment in mining and processing infrastructure, fast-tracking federal funding and permitting, and leveraging the Department of Defense (DOD), Export-Import Bank (EXIM), and National Defense Stockpile to support critical mineral projects.
His administration also aims to eliminate regulatory obstacles, including waiving National Environmental Policy Act (NEPA) reviews for defense-critical minerals. NioCorp CEO Mark A. Smith (opens in a new tab) and GreenMet President Drew Horn strongly support (opens in a new tab) this policy direction, arguing that U.S.-based projects like Elk Creek could supply niobium, scandium, titanium, and rare earths—materials crucial to national security and advanced technologies.
Well Intentioned, But…
The rationale behind Trump’s proposal is partly correct. China’s near-monopoly on rare earth refining and critical minerals poses a strategic risk for the U.S., particularly as Beijing has begun restricting gallium, germanium, and graphite exports—materials essential for defense, aerospace, and clean energy technologies. Furthermore, while the U.S. has substantial mineral reserves, its mining and processing infrastructure is underdeveloped, leaving the country reliant on imports. Additionally, the permitting process for U.S. mining projects is among the longest in the world, averaging 29 years, making it nearly impossible to ramp up production quickly.
Despite the initiative’s strong national security focus, Trump’s plan overestimates the U.S.’s ability to build a self-sufficient mining industry in the near term.
Major Gaps
While the country does possess critical mineral deposits, processing them at scale requires advanced refining expertise, infrastructure, and decades of investment—all areas currently dominated by China. Even if new mines open tomorrow, the U.S. lacks the refining capacity to convert raw materials into usable products, meaning that American-mined rare earths would still need to be shipped to China for processing. Additionally, many projects, including Elk Creek, lack secured funding and commercial agreements, raising doubts about their long-term viability. Of course, there are bright points, such as MP Materials, which is ramping up refining and magnet production in a partnership with General Motors. But this will take time.
Try Competing Against the State-owned Rare Earth Complex
Trump’s proposal also ignores key economic realities that make rare earth and critical mineral mining in the U.S. an uphill battle. American mining companies face higher operational costs and extreme price volatility, whereas Chinese state-owned enterprises receive heavy subsidies, allowing them to undercut Western producers. Without market stability mechanisms such as long-term contracts, government-backed stockpiling, or price controls, simply “mining more” will not solve pricing instability—a factor that has deterred private investment in U.S. projects for decades.
Don’t Forget Mother Nature—Even the Chinese Having to Face the Force.
Another potential pitfall is Trump’s push to waive NEPA reviews for defense-critical mineral projects. While reducing bureaucratic delays is necessary, eliminating environmental oversight entirely could backfire, triggering lawsuits and political resistance. Trump’s previous deregulation efforts faced fierce legal battles, and any attempt to circumvent NEPA could be challenged in court, ultimately slowing down rather than expediting mining approvals.
Questions about Financing
The plan also relies heavily on government-backed financing, with proposals to expand EXIM Bank loans, DOD funding, and federal loan guarantees. While such financial mechanisms can provide a short-term boost, they also introduce inefficiencies and increase the risk of wasted capital if projects fail to deliver viable returns. Furthermore, private sector investors remain wary of backing large-scale mining operations without assuring long-term price stability—a critical issue Trump’s plan does not adequately address.
Where is the Refining?
A major omission from Trump’s proposal is the absence of any plan to build U.S.-based rare earth refining capacity. Increasing domestic mining does little to reduce reliance on China without refining infrastructure, as raw materials would still need to be processed abroad. Unlike China’s state-controlled industrial strategy, Trump’s initiative lacks centralized coordination, missing a “Rare Earths Czar” (that Rare Earth Exchanges has been calling for) or a national minerals strategy to unify research, investment, and defense procurement. Without this level of oversight, efforts to expand domestic production could become fragmented and inefficient.
Be Prepared for Real-World Constraints—Trump Needs to Fly to Beijing and Do a Deal
Additionally, the initiative fails to address short-term supply chain risks. The U.S. remains years away from achieving mining and refining independence, and an immediate solution is needed to stabilize supply chains. The Rare Earth Exchanges community has advocated for a 5-to-10-year rare earth price stabilization deal with China, which would ensure continued access to essential materials while the U.S. builds its own capabilities. Trump’s failure to acknowledge this reality suggests that his plan focuses more on political messaging than on delivering a realistic industrial strategy. If he is serious, his people will read Rare Earth Exchanges and consider creative deal-making. Trump is uniquely gifted for just such a calling.
Final Thoughts
Trump’s “Mine, Baby, Mine” rhetoric resonates with supply chain hawks and national security advocates, but the proposal lacks clear execution strategies. While expanding U.S. mineral independence is a necessary long-term goal, the plan glosses over critical funding gaps, processing limitations, and global market realities.
If the administration is serious about achieving strategic independence, it must integrate short-term supply agreements with China while simultaneously investing in domestic mining, refining, and rare earth processing infrastructure. Without such a balanced approach, Trump’s push risks stalling before it ever gains traction.
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