US lawmakers introduce Bill to create US$2.5 billion critical-minerals stockpile
Allied countries can join the reserve if they contribute at least US$100 million
[HOUSTON] A bipartisan group of US lawmakers on Thursday (Jan 15) introduced a Bill to create a US$2.5 billion stockpile of critical minerals. This comes in a move to stabilise market prices, and encourage domestic mining and refining.
The Bill marks Washington’s latest attempt to offset what policymakers view as Chinese manipulation of prices for lithium, nickel, rare earths and other critical minerals, which are vital for items from electric vehicles to high-tech weaponry. China’s manipulation of prices has stymied American mining companies for years.
A China-generated glut of lithium, for example, led North Carolina-based Albemarle to pause US expansion plans in 2024. The Pentagon became the largest shareholder in Nevada-based rare earths company MP Materials in July, amid intensifying Chinese competition.
The 68-page Bill says that China has moved to “weaponise its influence over prices and volumes, in the contest for access to critical minerals”.
Bill aims to ‘insulate US from foreign threats’
China has rejected assertions that it manipulates the market for critical minerals, saying in November that it is committed to “upholding the security and stability of global production and supply chains”.
To become law, the measure must pass the House of Representatives and the Senate, and be signed by US President Donald Trump.
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The Bill would create a Strategic Resilience Reserve with a seven-person board, modelled on the US Federal Reserve’s governance structure, which would oversee the fund.
The members, appointed by the president and confirmed by the Senate, would be tasked with buying minerals considered critical by US agencies, and stockpiling them in warehouses across the country.
The board would need the technical expertise to ensure the minerals are stored properly. For example, certain lithium derivatives emit hydrogen when exposed to water.
The Bill prioritises recycled material, but minerals extracted from the mines would also be eligible. Allied countries would be able to join the reserve if they contribute at least US$100 million.
The minerals could be sold for private-industry or defence purposes. Any profit would be used to buy more minerals, and keep the stockpile active in perpetuity.
“Providing targeted investments and stockpiling key inputs will help insulate the US from foreign threats, and will provide a significant – and cost-effective – boost to the US economy,” said Senator Jeanne Shaheen, a New Hampshire Democrat and ranking member of the Senate Foreign Relations Committee.
Senator Todd Young, an Indiana Republican, co-sponsored the legislation and Representative Rob Wittman, a Virginia Republican, introduced the same measure in the House.
The reserve’s board would have flexibility over how to buy the minerals, said Senate aides. It could, for example, agree to pay twice the existing market price for rare earths – a market dominated by China – if such purchases supported the US mines.
Many niche-but-essential minerals, on which Beijing has imposed export controls, are not traded or lightly traded, sparking a push for minerals prices not tied to Chinese production.
“It’s certainly possible this reserve could create a Western price for certain critical minerals,” a Senate aide said.
The Group of Seven finance ministers on Jan 13 discussed the floors for minerals prices. Trump on Wednesday said that the US’ over-reliance on other nations for critical minerals is a national security threat.
Australia is also developing its own critical minerals reserve. REUTERS
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