Understandably, the United States has an interest in reducing its dependence on foreign sources for critical minerals. This is particularly timely as China enjoys a monopoly over the market. Following the principle of the strategic petroleum reserve, officials are now pushing for a strategy to stockpile critical minerals. This action comes in direct response to China’s recent, new and expanding export controls on rare earth elements. These measures had been introduced in retaliation against U.S. tariffs enacted by former President Donald Trump.
In 2024, the U.S. was importing almost 80% of its rare earth elements. Nearly 70% of those imports have originated from China in the first half of 2023. That dependency has raised alarm bells about our national security and economic security. As a consequence, equity financing is being targeted towards domestic mining companies to counteract China’s dominance in the supply chain of these critical resources.
Doug Burgum, another influential voice in this new and long-overdue discussion, helped set the tone with his call to action to restore the U.S. mining industry. He stated, “We have to get back in the game. It’s not just drill, baby, drill. It’s mine, baby, mine. If we don’t do that as a country, we will not be successful. We will literally be at the mercy of others that are controlling our supply chains.”
To support domestic mining, the Trump administration is reportedly looking into creating a sovereign risk insurance fund. This fund would protect companies investing in approved projects from the unpredictability of political changes in Washington, effectively stabilizing their investments. Burgum described the concept as “an insurance market that would be backed by the federal government.”
The suggested response from these officials is for the U.S. to open up its wallet. They call for establishment of a critical minerals sovereign wealth fund to support domestic mining companies focused on developing and processing critical minerals. This step alone would dramatically increase the country’s global competitiveness against China’s price-dumping tactics. China has since been flooding international markets with these minerals, driving prices down through the floor.
If we take some of our balance sheet and make investments in critical minerals, we can gain a competitive edge,” Burgum noted. He went deeper into the promise of stockpiling critical minerals during market slumps from foreign dumping. So instead, he proposed, the U.S. should make focused, strategic purchases of these resources to create a public reserve.
Burgum highlighted the importance of financial commitment to these initiatives, stating, “You got to write a check. There’s got to be a financial cost if you’re going to do these decisions where you’re destroying our balance sheet or destroying a company’s opportunity.” He challenged the notion that the most prosperous country on earth shouldn’t have the world’s largest sovereign wealth fund. As such, he reiterated the need for urgent and massive investment in critical minerals.