The Critical Minerals to Watch in the US

Capital Economics

Recent geopolitical developments have thrust critical minerals into the spotlight like never before. Speculations surrounding former President Trump’s alleged plans to make Canada the 51st state, the now-rejected deal involving Ukraine’s rare earths in peace talks, and renewed interest by the current US administration in purchasing Greenland have all highlighted the importance of securing mineral supply chains.

China’s Grip on Critical Minerals

Despite ongoing discussions, the focus remains largely on one country: China. In response to recent US tariff measures, China announced new restrictions on exports of tungsten, tellurium, bismuth, indium, and molybdenum, stating that export licenses will be issued only to compliant companies.

While these measures are less severe than the mineral export bans imposed in December—including gallium, germanium, antimony, and superhard materials—they have already had significant market impacts. Antimony prices outside China have doubled, and bismuth prices have reached decade-high levels.

China’s previous tightening of export rules on graphite, a critical material for electric vehicle and energy storage batteries, has raised further concerns. With Beijing controlling both production and processing, the impact could be as significant as its past rare earth restrictions, which led to WTO disputes and rare earth price surges.

Long-Term Implications for Global Markets

Rare earth exploration and production outside China have expanded since the 2010 WTO dispute, but China still dominates downstream processing and permanent magnet production. These rare earth metals are critical for EV motors and industries such as robotics, defense, and aerospace.

Adding to the supply chain strain, China is facing its own rare earth challenges due to a collapse in imports from Myanmar, its primary source of heavy rare earths. This disruption has already led to higher rare earth prices globally.

Though no outright bans exist on graphite and rare earth exports, China’s recent actions signal potential future restrictions, positioning Beijing to retaliate against US trade sanctions as needed.

According to Capital Economics, while China’s latest restrictions affect only $2 billion in annual exports—less than 0.1% of its total exports—they contribute to a growing arsenal of export controls. Currently, around 9% of Chinese exports, including most critical minerals, are subject to export licensing requirements.

As the geopolitical battle over critical minerals intensifies, securing alternative supply chains will be vital for industries dependent on these essential materials.