China’s critical mineral monopoly threatens U.S. national security

OPINION:

The Trump administration faces a national security threat: China’s control over critical minerals. Its dominance over critical mineral supply chains presents a stark geopolitical challenge for the U.S. and its close allies. China is already weaponizing this control to neutralize America’s defense capabilities and undermine American industry.

The first Trump administration rightly anticipated the nature of the threat. It issued Executive Orders 13817 and 13953, declaring it a national emergency and stating that “our Nation’s undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries constitutes an unusual and extraordinary threat.” On the first day of his second administration, Mr. Trump issued executive orders to unleash American energy and declare a national energy emergency. Their stated objectives are “restoring America’s mineral dominance” and stemming an “imminent and growing threat to the United States’ prosperity and national security.”

China’s dominance increased between the first and second Trump administrations. State-backed Chinese companies continue to extend their influence by leveraging government support. From 2020 to 2023, Chinese-controlled nickel production out of Indonesia increased from 34% to 52% of global supply. Substantial government support to incentivize the funding needed to build mineral supply chains independent of Chinese control remains a significant element of any solution.

In 2018, Mr. Trump signed the BUILD Act, creating the U.S. International Development Finance Corp. In 2020, the Trump administration used it to invest in our company, TechMet, one of the first critical minerals investment companies with a portfolio of assets producing, processing and recycling critical minerals. The equity investment by the International Development Finance Corp. had an outsized effect on TechMet’s ability to attract additional private investment and build more projects free from Chinese control while providing a return to U.S. taxpayers.

Five years later, TechMet remains the only critical metals investment company with direct equity participation from the U.S. government. The U.S. must do much more quickly to counter the ever-growing Chinese dominance over critical mineral supply chains.

China has recently demonstrated its ability and willingness to weaponize its dominance over critical mineral supply chains, underscoring the grave threat posed by U.S. reliance on China for these vital resources.

In October, China sanctioned America’s largest drone manufacturer, Skydio, cutting the company off from the material needed for its batteries. The company, which provides drones to the U.S. military and allied nations, said it was targeted “because we serve critical customers that advance our national security.”

In December, the Chinese Commerce Department banned the export of gallium, germanium and antimony to the U.S. These critical minerals are essential for semiconductors, infrared technology, fiber optic cables, bullets and other weaponry. In January, the commerce ministry indicated that it would restrict the export of certain battery and lithium processing-related technologies.

These incidents highlight an emerging pattern of China leveraging its control over critical minerals, underscoring the urgency for swift, coordinated action to safeguard U.S. national security.

To counter China and build on the groundwork laid by Trump’s first administration, the BUILD Act and the recent executive orders, the administration can work with Congress to improve and expand the capabilities of the International Development Finance Corp. and the Export-Import Bank through their ongoing reauthorization processes. The current authorizations expire in October 2025 and December 2026, respectively. Both organizations can be key in securing American critical minerals supply chains and must be reauthorized as soon as possible.

The International Development Finance Corp.’s capabilities can be enhanced by lifting the budget cap, correcting a flaw in budgeting for equity investments, lifting the congressional notification threshold and expanding the countries where they can operate. The Export-Import Bank can also be unleashed by lifting its default cap (currently at an unrealistic 2%), extending the reauthorization period and expanding the Make More in America Initiative and the China and Transformational Export Program.

Existing Department of Defense mechanisms can be streamlined and used to fill funding gaps in key projects. The new Office of Strategic Capital, the Defense Logistics Agency, the Defense Advanced Research Projects Agency and other Defense Department offices have valuable expertise and could leverage additional resources to support critical minerals projects of strategic national importance.

The departments of Commerce, Energy, Interior, State and Treasury also have programs that could be optimized to secure portions of the supply chain and crowd in greater private investment. Strengthening the enforcement and monitoring of Foreign Entity of Concern provisions, the targeted and strategic use of tariffs, and implementing incentives for production domestically and among closely allied nations will also mobilize the private sector.

Bold and decisive action is needed. By investing in domestic and allied supply chains, the Trump administration will strengthen U.S. interests and protect its defense capabilities. Unchaining America from dependence on China’s critical mineral supply chains is a national security imperative.

• Brian Menell is the Chairman and CEO of TechMet, a leading critical minerals investment company with a portfolio of assets that produce, process and recycle the materials critical to U.S. national security and industrial competitiveness. TechMet’s major shareholders include the U.S. International Development Finance Corp., S2G Ventures, the Qatar Investment Authority and the global energy and commodity group Mercuria.