President Donald Trump has invoked the Defense Production Act (DPA) to accelerate the development of the domestic mineral industry, aiming to reduce the reliance on imports and bolster supply chains.
By signing an executive order on Thursday, Trump used the DPA, originally conceived by President Harry Truman, to mobilize industrial resources for national security. The act allows the government to provide financing, issue loans, and invest in projects that strengthen domestic mineral production and processing capabilities.
"The United States was once the world's largest producer of lucrative minerals, but overbearing federal regulation has eroded our nation's mineral production," Trump stated in the executive order, clarifying the need to boost mining and refining operations as a national security measure.
His action calls for an expedited permitting process for domestic mining projects, which are among the slowest in the world, along with increased federal land access for mineral extraction.
The U.S. International Development Finance Corporation, in coordination with the Department of Defense, is also set to provide financial support for new mining ventures.
The White House has long voiced concerns over the domestic dependence on foreign sources for critical minerals. President Joe Biden has previously invoked DPA to expand the production of battery metals, including lithium, nickel, and cobalt, recognizing the importance of these metals for many modern technologies – including batteries, semiconductors, defense systems, and green energy, and allowing companies to access $750 million in federal funding.
Trump's action goes further by expanding the list of priority minerals to include uranium, potash, and possibly coal – which he plans to leverage to bring down the cost of energy, helping industrial competitiveness.
While China's 70% control over rare earth processing has been a concern, recent export restrictions of elements such as gallium and germanium have worsened the situation, raising concerns over supply shortages for U.S. manufacturers.
Besides boosting domestic production, Trump is also pursuing international agreements, including a potential deal with DR Congo (the leading exporter of cobalt) and Ukraine.
"One of the things we are doing is signing a deal very shortly with respect to rare earths with Ukraine… They have tremendous value in rare earths, and we appreciate that," Trump said per Al Jazeera.
After weeks of negotiation, the deal regarding Ukraine's minerals fell through during Ukrainian President Volodymyr Zelensky's last visit to the White House, when tensions between the two leaders derailed negotiations. Since then, both sides have expressed willingness to move forward, signaling that the deal might happen soon.
Price Watch: Sprott Critical Materials (NASDAQ:SETM) is up 3.89% year-to-date.
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