President Trump’s drive to free the United States from dependence on Chinese critical minerals is crashing into a difficult truth: American mining and processing companies are nowhere near ready to fill the gap.
Since returning to the White House, Trump has treated domestic mining and processing of critical minerals as a matter of national security, directing tens of billions of dollars toward nearly 150 minerals companies in an effort to break China’s hold on supply chains for weapons systems and other strategic goods.
Defense manufacturers and other industries now have just over five months to comply with a federal regulation requiring them to stop purchasing rare earths, magnets, tungsten, molybdenum, and tantalum from China, Russia, Iran, or North Korea — with a hard deadline of January 1, 2027.
The U.S. government has been attempting to curb these imports for years, but has repeatedly issued waivers to companies because American supply simply cannot satisfy domestic demand.
Trump publicly lashed out at the waiver practice in a May 10 post on his Truth Social platform, writing: “ALL FEDERAL AGENCIES MUST BUY AMERICAN — NO EXCUSES!” Then, last Monday, he signed an executive order making it significantly more difficult for defense contractors to qualify for those waivers.
Despite that tough stance, conversations with 16 industry executives, investors, analysts, and policymakers paint a picture of an American minerals sector that falls far short of what’s needed.
Take rare earth magnets as an example: in 2025, U.S. demand for the most widely used type stood at roughly 48,000 metric tons, while domestic sources could only supply about 300 metric tons, according to figures from the Arthur D. Little consultancy. By the end of this year, American companies are expected to have the capacity to produce just 5,000 metric tons.
Rare earths are among 60 minerals designated as critical by the federal government. Before they can be used in weapons, cars, computers, and other products, they must go through a processing stage to be converted into magnets.
The situation is even bleaker for some other minerals. American firms have not produced tungsten since 2015 or tantalum since 1959. Guardian Metal Resources is working toward opening a domestic tungsten mine by 2028, while Lion Rock Resources is developing a tantalum mine in South Dakota with no opening date set.
Minerals industry analyst and consultant Chris Berry said there is little chance the U.S. industry can produce enough to make waivers unnecessary by January. “It’s going to take many more years to get the needed infrastructure in the ground to compete,” Berry said.
While the United States holds reserves of most critical minerals, it lacks the processing capacity to turn many of them into usable materials. China built its dominance in minerals refining during the late 20th century and now controls more than 80% of that global sector. The International Energy Agency warned this month that $6.5 trillion worth of global manufacturing could be at risk if Beijing restricts rare earth exports — something it has done periodically in recent years.
When asked for comment, the White House pointed to Trump’s executive order, which states that waivers may only be granted if a contractor can demonstrate an “exhaustive effort” to avoid Chinese materials and presents a concrete plan for moving away from that supply. The Pentagon did not respond to requests for comment.
Investment in U.S. rare earths has also been hampered by stubbornly low mineral prices — a situation Washington attributes to China subsidizing its producers and flooding global markets with inexpensive products, making American projects financially unviable. China has maintained that it follows World Trade Organization trade rules and works to keep markets stable. A representative for the Chinese embassy in Washington offered no additional comment.
One Pentagon-backed startup, Ucore Rare Metals, has developed a processing technology called RapidSX, which the company believes is faster, cleaner, and less expensive than the standard industry method known as solvent extraction. Ucore originally planned to begin refining operations by 2025 but has revised its timeline due to what it describes as shifting requirements from the Pentagon. The company’s CEO, Pat Ryan, told Reuters that some production won’t begin until 2027 at the earliest. “Can the entire supply chain be propped up by 2027? Boy, I tell you, that’s a battle,” Ryan said.
In February, the Trump administration launched Project Vault, a $12 billion initiative to stockpile critical minerals for American manufacturers. Officials acknowledged in April that the program will initially need to source minerals from “anywhere in the world,” China included.
Defense contractor Lockheed Martin’s CEO, Jim Taiclet, said at a conference earlier this month that the company has provided the Department of Defense with a list of minerals it wants stockpiled.
That stockpiling strategy has frustrated domestic minerals producers, who say what they really need is for defense contractors to place orders directly with them. “Defense contractors have just assumed they can keep buying Chinese products,” said Nick Myers, CEO of Massachusetts-based Phoenix Tailings, a minerals startup that last month received a $500 million Pentagon loan to build a processing facility. “The defense industry is never going to stop if you keep giving waivers.”
Defense contractors Boeing, General Dynamics, Huntington Ingalls Industries, Northrop Grumman, and RTX did not respond to requests for comment. L3Harris Technologies declined to comment.
The technical complexity of refining minerals has also contributed to delays across U.S. projects. Partnerships with allies such as South Korea and Japan may serve as a temporary bridge for manufacturers while American suppliers work to scale up, according to Samantha Carl-Yoder of the law and lobbying firm Brownstein Hyatt Farber Schreck.
MP Materials, one of the largest U.S. players in the field and financially backed by the Pentagon, spent years fine-tuning its solvent extraction processing equipment — a process CEO Jim Litinsky called “painstaking.” The company has built a magnet facility in Texas and expects to have some magnets approved for use by its first customer, General Motors, before the end of the year. A separate magnet facility MP is constructing for the Pentagon is expected to open in 2028.
In Marion, Indiana, ReElement Technologies is pursuing a different approach, planning to process minerals using a technique borrowed from the pharmaceutical industry called chromatography — a method that has never been applied to large-scale mineral processing. The company aims to build capacity to process 10,000 metric tons of germanium or other minerals this year. CEO Mark Jensen said in a statement that the company’s germanium production is “profitable at any volume.” ReElement received a $25 million Pentagon investment earlier this month.
Another firm, USA Rare Earth, spent more than five years exploring chromatography before switching to solvent extraction, according to a source with direct knowledge of the company’s strategy. USA Rare Earth, which is constructing a magnet facility in South Carolina, declined to comment on its processing research.
Energy Fuels, which last month received a $725 million Pentagon loan, plans to begin processing small quantities of rare earths before the end of the year, with a goal of reaching 6,000 metric tons annually by 2029. The company is also in the process of acquiring an existing U.S. magnet producer.
Ucore, Energy Fuels, and ReElement have each committed to supplying rare earths to magnet manufacturer Vulcan Elements, which is building a production plant in North Carolina scheduled to open by 2030.
