'New oil': US aims to create $2.5-billion critical minerals stockpile to counter China's dominance

WASHINGTON: A bipartisan group of US lawmakers has introduced legislation to establish a $2.5-billion "Strategic Resilience Reserve" aimed at strengthening domestic supplies of critical minerals and rare earth elements.

The move marks the latest effort to reduce US dependence on China for materials essential to defense, clean energy and advanced manufacturing.

The proposal would authorise a federally-backed reserve governed by a seven-member board, whose structure would be modelled after the Federal Reserve.

Board members would be nominated by the president and confirmed by the Senate.

The reserve would purchase critical minerals designated by US agencies and stockpile them at facilities across the United States for strategic use.

Supporters say the measure is intended to protect US supply chains from geopolitical disruptions and market manipulation, while encouraging greater investment in domestic mining, refining and mineral processing.

"Providing targeted investments and stockpiling key inputs will help insulate the US from foreign threats and will provide a significant — and cost-effective — boost to the US economy," Sen. Jeanne Shaheen, D-New Hamshire, said in a statement supporting the legislation.

The bill argues that China has used its dominant position in global critical mineral supply chains to influence prices and availability, creating strategic risks for the United States and its allies.

Senate aides said the reserve could eventually help establish a Western benchmark price for certain critical minerals, reducing reliance on Chinese pricing.

The proposal comes as Washington accelerates efforts to rebuild domestic supply chains for lithium, rare earth elements, graphite, cobalt, nickel and other minerals used in EV batteries, semiconductors, renewable energy technologies, military equipment and consumer electronics.

Although the United States possesses significant deposits of many critical minerals, it has fallen behind China over several decades.

This is due in part to limited domestic refining capacity, lengthy permitting processes, higher production costs and reduced investment in mining and mineral processing.

In contrast, China invested heavily in mining, refining and manufacturing beginning in the 1990s, allowing it to dominate not only extraction but also the processing stages where most of the value is created.

Today, China refines the majority of the world's rare earth elements and processes large shares of lithium, cobalt and graphite used in batteries and high-tech manufacturing.

Many US mining projects require years — sometimes more than a decade— to secure environmental reviews and permits before production can begin.

And even when minerals are mined domestically, much of the material is shipped overseas for processing because the United States has relatively little refining capacity.

Industry analysts also cite price volatility, limited private financing and competition from lower-cost Chinese producers as barriers that have slowed development of US projects.

The proposed reserve builds on broader US efforts to secure strategic mineral supplies.

The Trump administration has expanded federal support for domestic critical mineral production, including investments in North American rare earth and lithium projects.

The US Army is also advancing plans to develop small-scale mineral refining capabilities to strengthen defense supply chains and reduce reliance on foreign processing.

The legislation reflects growing bipartisan agreement that critical minerals have become a national security priority as global demand continues to surge with the expansion of electric vehicles, renewable energy systems, artificial intelligence infrastructure and advanced defense technologies.

The bill must still advance through Congress before becoming law.

Critical minerals are increasingly viewed as the "new oil" because they underpin electric vehicles, batteries, semiconductors, AI data centers, wind turbines, defense systems and other advanced technologies. Countries that control these supply chains can exert significant economic and geopolitical influence.