A bipartisan group of lawmakers is set to introduce a bill to create a $2.5 billion reserve of critical minerals to counter China‘s grip on global supply.
Sens. Jeanne Shaheen (D-NH) and Todd Young (R-IN), along with Reps. John Moolenaar (R-MI) and Rob Wittman (R-VA) announced the Securing Essential and Critical U.S. Resources and Elements or SECURE Minerals Act on Thursday.
This is Congress’s latest effort to boost the supply of minerals to reduce reliance on China, which has used its control over the supply as leverage in trade talks with the United States.
“As a senior member of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (CCP), I am acutely aware of how China’s dominance of critical mineral supply chains poses a grave threat to U.S. competitiveness and national security,” Wittman said in a press release.
“By engaging in unfair trade practices and subsidizing mineral production, China artificially lowers the price of critical minerals, making it uneconomic for companies to invest in domestic supply chains,” he said.
The legislation would resemble both the Strategic Petroleum Reserve and the Federal Reserve. The reserve will be managed by a seven-member board, appointed by the president and confirmed by the Senate, according to Axios. The bill would also establish storage facilities to hold supplies of key materials.
The legislation shortly follows the introduction by Reps. Young Kim (R-CA) and Ami Bera (D-CA) of the Developing Overseas Mineral Investments and New Allied Networks for Critical Energies Act, which aims to improve international coordination among countries to support the expansion of supply chains for critical minerals.
Critical minerals and rare earths are essential materials for developing technology-based applications in the energy and defense sectors. However, China currently controls the global supply of critical minerals and rare earths.
Beijing has used its control over the supply as leverage in trade talks against the U.S. For instance, China has imposed several export restrictions on rare earth materials bound for the U.S.
President Donald Trump reached a deal with China in November to lift some export controls for a year, but restrictions on other rare earths remain in place.
The administration has also looked abroad to partner with countries to diversify the domestic supply, including Malaysia, Thailand, Cambodia, and Australia.
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In an effort to expand domestic supply, the administration has also taken direct ownership of critical minerals companies.
For instance, the administration has taken a 5% stake in Lithium Americas, a Canadian company developing a lithium mine and processing plant in Nevada. It has also taken a 15% stake in MP Materials to help the company build a rare-earth magnet supply chain through its second U.S. magnet facility.
