# Critical Minerals The materials underpinning modern military and commercial technology: the seventeen rare-earth elements (used in permanent magnets for drones, missiles, satellites, F-35 engines, and EV motors), lithium and cobalt (batteries), gallium and germanium (semiconductors), and dozens of others designated "critical" by the US Geological Survey. Finding the raw ore is generally not the bottleneck — separating and refining it is, and that processing step is where [[China]] holds overwhelming, near-monopoly dominance. ## The China chokepoint China controls roughly 70% of global refining capacity across 19 of 20 strategic minerals, 94% of sintered permanent magnet production, and effectively 100% of processing for several heavy rare earths including samarium — an essential component of magnets in Tomahawk cruise missiles and F-35 engines. This concentration is the result of decades of deliberate Chinese industrial policy: state-subsidized mining, tolerance for environmental damage that Western competitors couldn't match, and strategic acquisition of processing technology. China has demonstrated willingness to weaponize this dominance. In April 2025, Beijing imposed export restrictions on seven rare-earth elements in retaliation for Trump-era tariffs. In October 2025, China introduced its most comprehensive restrictions to date, modeled on the US Foreign Direct Product Rule — requiring export licenses for any product worldwide containing 0.1% or more of Chinese-origin rare earths. Though both sides partially stood down at the Busan APEC summit (October 30, 2025) with a mutual suspension of the most aggressive controls until November 2026, the underlying control architecture remains intact. Seven medium- and heavy-rare-earth elements remain controlled, and new restrictions on rare-earth compounds took effect January 1, 2026. ## The domestic supply chain The US response spans three stages: mining ([[MP Materials]], the only operating US rare-earth mine at Mountain Pass, California), refining/separation ([[ReElement Technologies]], developing rare-earth recycling and separation), and magnet manufacturing ([[Vulcan Elements]], recipient of the controversial $620M Pentagon loan). The [[Office of Strategic Capital]]'s expanded lending authority and EXIM Bank financing (nearly $4 billion in letters of intent) provide the government capital. Partnerships with allies — Australia (October 2025 bilateral framework), Japan (February 2026 action plan and March 2026 deep-sea mining MOU) — aim to build non-Chinese supply chains. New magnet manufacturing capacity coming online in summer 2026 will begin to reduce reliance, but self-sufficiency remains years away. The question is whether the November 2026 truce expires before alternative supply chains are operational. ## KB relevance Critical minerals connect to the vault's defense-tech and industrial-policy threads. The national-security framing is genuine — the US cannot build advanced weapons systems without rare-earth magnets it currently cannot produce domestically. But genuine strategic priorities also serve as vehicles for [[Defense Tech Conflicts of Interest]]: the [[Vulcan Elements OSC $620M Pentagon Loan]] was expedited under national-security urgency while raising conflict-of-interest questions. The critical-minerals story parallels the [[Chip Export Controls]] story — both involve US attempts to break Chinese supply-chain dominance, both use export controls as leverage, and both face the same fundamental question of whether technology denial works or merely accelerates adversary self-sufficiency. Since 2025 the industrial-policy thread has escalated from financing to **ownership**: DoD took ~15% of [[MP Materials]], DOE took warrant positions in [[Lithium Americas]], and the government took ~10% of [[Trilogy Metals]] — a company whose Alaska assets are worthless without a road permit the same government controls. The full ledger is [[Government Equity Stakes Roster]]; the frame is [[American State Capitalism]]. ## See Also - [[Government Equity Stakes Roster]] — the federal ownership ledger - [[Chip Export Controls]] — the parallel technology-denial regime - [[Office of Strategic Capital]] — the Pentagon's financing mechanism - [[MP Materials]] — the domestic mining operation - [[ReElement Technologies]] — domestic refining - [[Vulcan Elements]] — domestic magnet manufacturing - [[Defense Tech Conflicts of Interest]] — the corruption risk - [[China]] — the dominant supplier - [[Defense Production Act]] — the legal authority for intervention - [[Decoupling]] — the broader strategic framework - [[Mineralogy and Natural Resources]] — the geology of extraction and the critical-minerals race