Bipartisan Bill Proposes $2.5 Billion U.S. Critical Minerals Reserve

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  • A bipartisan bill proposes establishing a $2.5 billion Strategic Resilience Reserve to encourage domestic sourcing of critical minerals and rare earths.
  • The reserve is intended to challenge China’s near-total monopoly on the supply, refining, and pricing of these materials and to insulate the U.S. from foreign threats.
  • The reserve, which would be overseen by a seven-person board modeled on the Federal Reserve, has the potential to become the basis for a new, Western price benchmark for critical minerals.

A bipartisan group of lawmakers introduced a bill on Thursday, proposing the creation of a $2.5 billion critical minerals reserve in the United States.

The reserve would be a move to encourage mining and refining domestically as the U.S. looks to break China’s near-total monopoly in critical minerals and rare earths supply, refining, and pricing.

The bill says that China has moved to “weaponize its influence over prices and volumes in the contest for access to critical minerals,” and asserts that the goal is “insulate the U.S. from foreign threats.”

The bill proposes the creation of a so-called Strategic Resilience Reserve, which would have a board of seven persons to oversee the fund. The governance would be modeled on that of the Federal Reserve.

The board members, who would be appointed by the President and confirmed by the Senate, would have the task to buy critical minerals that U.S. agencies and departments consider strategic. The Strategic Resilience Reserve will then stockpile these minerals at warehouses in the United States.

“Providing targeted investments and stockpiling key inputs will help insulate the U.S. from foreign threats and will provide a significant – and cost effective – boost to the U.S. economy,” said Senator Jeanne Shaheen, a Democrat from New Hampshire and a ranking member of the Senate Foreign Relations Committee.

The reserve, if approved, could become the basis of a price for critical minerals in the West, not influenced by China.

“It’s certainly possible this reserve could create a Western price for certain critical minerals,” a Senate aide told Reuters.

The Trump Administration last year started buying minority stakes in North American rare earth and lithium companies and projects, to ensure domestic supply.

In addition, the U.S. Army will develop small-scale refineries to ensure domestic supply of critical minerals for defense and military purposes as the United States and the Western allies look to reduce their dependence on China.