The quest for critical minerals has become a pressing issue for the US, as the country seeks to reduce its reliance on China for these essential resources. With over 50 critical minerals identified by the US Geological Survey, the demand for domestic production is on the rise. President Trump's recent announcement to expand domestic production of critical minerals and rare earths has sent shockwaves through the industry, with many experts weighing in on the potential implications.

Critical minerals, including rare earths, are the building blocks of modern technology, from semiconductors to aerospace and defense. The US is currently reliant on imports for many of these minerals, with China accounting for roughly 60% of global reserves and 85% of processing capacity. However, with the US seeking to develop its own critical mineral access, the dynamics of the industry are set to change. Akshay Dubey, CEO of CVW CleanTech, notes that "the entire power generation system in the United States and the expansion that is required for AI and data center buildout is extremely dependent on critical minerals."

Despite the potential for domestic production, there are significant challenges to overcome. The permitting process for new mines can be lengthy, taking over 15 years on average, and the lack of clear regulations has hindered investment in the sector. Dubey cites the frustration of industry leaders, who are hesitant to invest in new projects due to the uncertainty surrounding permitting. However, with the Biden administration launching a review of US critical mineral supply chain vulnerabilities, there is a growing sense of urgency to develop domestic production. The Inflation Reduction Act has also offered incentives for domestic production, providing a glimmer of hope for the industry.

The recent minerals deal with Ukraine, which would have given the US access to a significant portion of the country's critical mineral reserves, has added a new layer of complexity to the situation. Although the deal is currently in limbo, the potential for Ukraine to become a major player in the critical minerals market is significant. With estimated reserves of 5% of the world's critical minerals, Ukraine could provide a much-needed alternative to Chinese supplies. However, as Mark Temnycky, nonresident fellow at the Atlantic Council's Eurasia Center, notes, "it would be a stretch to say that this would entirely offset China's control" over the rare earths market. Nevertheless, the potential for Ukraine to weaken China's monopoly over rare earths is a significant development, and one that could have far-reaching implications for the industry.