I happened to publish an article today on China’s export ban targeting MP Materials and USA Rare Earth. So here are my thoughts on Farrell Gregory’s policy prescriptions.
Even if these policies were executed perfectly, they would still fall far short of a real “Critical Mineral Security Endgame.” Gregory underestimates the distance between a policy list and industrial substitution. Critical minerals are not just a mining problem. They are an industrial-system problem. China’s advantage is built across extraction, refining, separation, purification, materials engineering, scale manufacturing, price control, export licensing, and downstream demand.
Strategic stockpiles can help with small-volume defense needs. They cannot solve large-volume industrial minerals such as graphite, copper, lithium, and nickel. Price floors are also much harder to internationalize than they look. European, Japanese, and Korean downstream manufacturers also want cheap inputs. They will not automatically agree to pay a long-term premium for a U.S.-led mineral price floor.
Offtake agreements face another constraint: the U.S. government itself is not the largest end-user. Defense demand matters, but its volume is limited. The real demand sits in EVs, batteries, wind power, power grids, consumer electronics, and semiconductor manufacturing. A 10% tax credit cannot close the structural cost gap created by China’s integrated industrial system. Equity investment has the same problem. The U.S. can put money into projects, but policy cycles are short, congressional funding is unstable, environmental and permitting conflicts are intense, local litigation is frequent, and projects remain exposed to commodity-price volatility. Whether the U.S. government can organize an industrial system over decades, the way China does, is a different question.
That is why I think the target of covering 100% of U.S. consumption of these 25 priority minerals from domestic or non-China sources within ten years is too aggressive. Twenty years would already be difficult, even under near-perfect execution.
A more realistic goal is narrower: within ten years, the U.S. and its allies should establish minimum non-China supply capacity for defense, advanced semiconductors, aerospace, power grids, and critical battery materials across these 25 minerals. That would create a security floor. It would not amount to full commercial substitution.
the antimony case makes the prioritization argument most clearly. china's Sept 2024 ban hit when US strategic reserves covered maybe a month of consumption. by the time any emergency domestic sourcing scaled, you're looking at 12-18 months minimum on a new processing facility. the gap between restriction duration and response time is where the real vulnerability lives, and it's different for every material on that 50+ item list. graphite has a similar problem (china does ~70% of processing, not just mining), so even if you find ore elsewhere, the midstream is still china-dependent. the prioritization framework in this piece cuts right at that: which materials have both the chinese willingness AND a short enough critical window that US action can actually close it.
The list problem is real. But there's a parallel failure that gets less attention: Washington isn't just choosing the wrong materials, it's reaching for the wrong instruments.
The bilateral frameworks of the last twelve months — DRC, Kenya, four continents of offtake structures — are equity stakes and processing guarantees, not tariffs. That's a different kind of play. It's patient industrial capital, not trade leverage.
The KPI question then gets harder. "Decreasing reliance on China" looks fine if you measure import share. It looks different if you measure who owns the refinery.
I happened to publish an article today on China’s export ban targeting MP Materials and USA Rare Earth. So here are my thoughts on Farrell Gregory’s policy prescriptions.
Even if these policies were executed perfectly, they would still fall far short of a real “Critical Mineral Security Endgame.” Gregory underestimates the distance between a policy list and industrial substitution. Critical minerals are not just a mining problem. They are an industrial-system problem. China’s advantage is built across extraction, refining, separation, purification, materials engineering, scale manufacturing, price control, export licensing, and downstream demand.
Strategic stockpiles can help with small-volume defense needs. They cannot solve large-volume industrial minerals such as graphite, copper, lithium, and nickel. Price floors are also much harder to internationalize than they look. European, Japanese, and Korean downstream manufacturers also want cheap inputs. They will not automatically agree to pay a long-term premium for a U.S.-led mineral price floor.
Offtake agreements face another constraint: the U.S. government itself is not the largest end-user. Defense demand matters, but its volume is limited. The real demand sits in EVs, batteries, wind power, power grids, consumer electronics, and semiconductor manufacturing. A 10% tax credit cannot close the structural cost gap created by China’s integrated industrial system. Equity investment has the same problem. The U.S. can put money into projects, but policy cycles are short, congressional funding is unstable, environmental and permitting conflicts are intense, local litigation is frequent, and projects remain exposed to commodity-price volatility. Whether the U.S. government can organize an industrial system over decades, the way China does, is a different question.
That is why I think the target of covering 100% of U.S. consumption of these 25 priority minerals from domestic or non-China sources within ten years is too aggressive. Twenty years would already be difficult, even under near-perfect execution.
A more realistic goal is narrower: within ten years, the U.S. and its allies should establish minimum non-China supply capacity for defense, advanced semiconductors, aerospace, power grids, and critical battery materials across these 25 minerals. That would create a security floor. It would not amount to full commercial substitution.
An interesting angle on this topic:
Recommendations for Strengthening the United States Strategy on Critical Materials (https://ebelousso.substack.com/p/recommendations-for-strengthening)
the antimony case makes the prioritization argument most clearly. china's Sept 2024 ban hit when US strategic reserves covered maybe a month of consumption. by the time any emergency domestic sourcing scaled, you're looking at 12-18 months minimum on a new processing facility. the gap between restriction duration and response time is where the real vulnerability lives, and it's different for every material on that 50+ item list. graphite has a similar problem (china does ~70% of processing, not just mining), so even if you find ore elsewhere, the midstream is still china-dependent. the prioritization framework in this piece cuts right at that: which materials have both the chinese willingness AND a short enough critical window that US action can actually close it.
The list problem is real. But there's a parallel failure that gets less attention: Washington isn't just choosing the wrong materials, it's reaching for the wrong instruments.
The bilateral frameworks of the last twelve months — DRC, Kenya, four continents of offtake structures — are equity stakes and processing guarantees, not tariffs. That's a different kind of play. It's patient industrial capital, not trade leverage.
The KPI question then gets harder. "Decreasing reliance on China" looks fine if you measure import share. It looks different if you measure who owns the refinery.
Really good article