Proposed U.S. Reserve for Critical Minerals

🌱 What has Harris proposed?

While critical minerals are “often overlooked in political discussions”, Kamala Harris is focusing on this topic in her U.S. presidential campaign. Harris has proposed creating a stockpile or “national reserve” of critical minerals. In a white paper, she set out “a detailed plan to enhance domestic processing capacity for critical minerals”. The plan focuses on “addressing supply-and-demand mismatches” and creating more robust supply chains. It also highlights “the importance of ensuring that essential resources are readily available for economic and national security needs”. Through the national reserve, Harris hopes to “revitalize the U.S. manufacturing sector”. Harris wants to make sure the U.S. always has the essential minerals it needs, even in crisis situations – such as geopolitical tensions, trade disputes, international conflicts, and natural disasters.

🌱 What policies are planned?

The plan of Harris “draw[s] parallels to existing strategic reserves, such as the Department of Energy’s petroleum reserve”. It makes use of “emergency government powers under the Cold War-era Defense Production Act to increase domestic processing of critical minerals”. The U.S. Defense Logistics Agency currently already directs the storage of some critical minerals, but Harris wants to expand the government’s role in safeguarding critical minerals further. Concretely, Harris plans to shorten “the permitting process for new mining and manufacturing projects”. She has also proposed creating so-called “America Forward tax credits”. The tax credits “are designed to encourage manufacturers to invest in critical mineral production while linking government support to corporate responsibility” – such as “the treatment of workers”. The tax credits are “estimated to cost around $100 billion” in total and they “will be funded through international tax reforms”. In contrast, Donald Trump’s approach to critical minerals is focused on “tariffs and reduced government intervention”.

🌱 How will this impact relations with China?

China has a dominant market position when it comes to the mining and refining of critical minerals. This has caused a number of concerns around geopolitical dependencies, national security, supply chains’ robustness, and ultimately access to minerals. Already in December 2023, the U.S. House Select Committee on Strategic Competition between the US and the Chinese Communist Party had “recommended creating a reserve of critical minerals”. The committee had said this needed to be done “to insulate American producers from price volatility” and to protect the U.S. against China’s “weaponization of its dominance in critical mineral supply chains”. They specifically recommended that the government spend “$1-billion to expand an existing National Defense Stockpile”.