Introduction
The United States Department of Defense (DoD), often referred to as the Pentagon, is playing a leading role in addressing vulnerabilities in the supply of critical minerals that are essential for its defence technologies, electronics, batteries, magnets, and advanced manufacturing. These materials, such as rare earth elements (REE’s), cobalt, graphite, tungsten, antimony, gallium, and germanium, are all vital for key projects such as fighter jets and missiles to night-vision systems and semiconductors. Decades of offshoring as well as market forces have created heavy reliance on foreign sources, prompting recent aggressive government intervention through funding, stockpiling, and international partnerships.
Reliance on China
The U.S. remains significantly dependent on China for many critical minerals. China dominates global processing, refining approximately 80 – 90 % of rare earths and holding substantial control over other supply chains. In 2023, the U.S. was almost entirely dependent on foreign sources for rare earths, with China accounting for about 70% of imports. [1] Beijing has used export controls and restrictions on materials like gallium and germanium, heightening national security concerns amid geopolitical tensions. This dominance poises risks to defence production, as disruptions could cripple military supply chains and broader high-tech industries. [2] In Congress, Pentagon officials have highlighted this vulnerability.
Defense Production Act (DPA) as a Key Funding Tool
The Pentagon has leveraged the Defense Production Act (DPA) to provide grants, loans, equity investments, and offtake agreements that accelerate projects. Under recent legislation such as the ‘One Big Beautiful Bill Act’ (OBBA), billions have been allocated: approximately $2 billion for stockpiling expansion, $5 billion for supply chain investments, and additional DPA Title III authorities for direct support. [3]
Notable examples of the above include a major investment in the Mountain Pass mine in California, the U.S.’s only active rare earth mine, making the government its largest shareholder. [4] Other awards have supported tin processing, graphite projects in Alaska, rare earth separation facilities, tungsten, antimony, scandium, gallium, and more. Total DoD investments in critical minerals have reached hundreds of millions, with plans for continued action. [5] Further, to mitigate shortages, the Defense Logistics Agency (DLA) is also building stockpiles, aiming for up to $1 billion in acquisitions of materials such as cobalt, antimony, tantalum, and scandium. [6]
U.S.–Canada Cooperation
Despite recent politics, Canada is a trusted partner and treated as a domestic source under DPA authorities. The U.S.-Canada Joint Action Plan on Critical Minerals, updated over the years, facilitates collaboration on exploration, processing, and defence supply chains. The Pentagon has directly funded Canadian projects, including tungsten and geranium refining in the Yukon. [7] Further, multiple initiatives have received co-funding, leveraging Canada’s rich deposits and proximity in order to reduce reliance on distant suppliers. This bilateral effort strengthens North American resilience for dense, aerospace, and clean technology. [8]
Backing Projects Abroad
The United States is extending support beyond North America through frameworks with allies. A major U.S.-Australia agreement includes billions in joint investments for mining and processing, with Pentagon backing for a gallium refinery in Western Australia and Export-Import Bank financing for various projects. To diversify processing and create secure chains, similar MOUs exist with Japan, Malaysia, Thailand, and others. [9]
Domestic Resource Potential
The United States possesses substantial untapped potential, including rare earths at Mountain Pass, graphite in Alaska, tungsten in Nevada and Idaho, antimony projects, and various deposits across federal lands. Recent executive actions prioritize permitting and development on public lands, while DPA and other funds target processing bottlenecks (the U.S. has a strong mining history but limited domestic refining). [10]
Companies are responding to Pentagon solicitations for projects on minerals. Recycling and byproduct recovery will add further capacity. [11] However, full realization of its potential will require overcoming environmental, regulatory, and capital hurdles.
Further Issues
There are further issues important in U.S. critical minerals. First, large-scale stockpiling (i.e. cobalt and graphite quantities could alternatively support battery/EV production) for defense raises debates about opportunity costs for civilian energy transition goals. [12] Second, direct government ownership and price supports mark a shift toward industrial policy, which supporters see as necessary but critics question because of possible long-term market distortion. [13] Third, heightened tensions and events such as export restrictions or conflicts can accelerate timelines, whereby the Pentagon would rapidly solicit proposals. [11] Finally, challenges ahead lie in scaling processing capacity, workforce needs, environmental considerations, and ensuring projects reach commercial viability.
Summary
In summary, the Pentagon’s multifaceted strategy, whereby it combines DPA tools, stockpiles, ally partnerships, and domestic development, represent a determined effort to rebuild supply chains for critical minerals. While progress is evident, sustained investment will be needed to reduce vulnerabilities to foreign nations and bolster long-term resilience.
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Sources
[1] cnbc.com, https://www.cnbc.com/2025/07/15/us-pentagon-defense-department-rare-earth-critical-mineral-mp-materials.html
[2] carboncredits.com, https://carboncredits.com/pentagons-1b-mineral-stockpile-boosts-u-s-independence-from-china/
[3] jdsupra.com, https://www.jdsupra.com/legalnews/u-s-expands-critical-minerals-financing-6503447/
[4] cnbc.com, https://www.cnbc.com/2025/07/15/us-pentagon-defense-department-rare-earth-critical-mineral-mp-materials.html
[5] warontherocks.com, https://warontherocks.com/a-federal-critical-mineral-processing-initiative-securing-u-s-mineral-independence-from-china/
[6] mining-technology.com, https://www.mining-technology.com/news/pentagon-stockpile-critical-minerals/
[7] mining.com, https://www.mining.com/web/pentagon-strikes-deal-with-canadas-5n-plus/ and
Insidedefense.com, https://insidedefense.com/insider/canadian-company-wins-nearly-16m-expand-domestic-tungsten-supply
[8] thehill.com, https://thehill.com/opinion/national-security/5569516-canada-critical-minerals-us-defense/
[9] bhfs.com, https://www.bhfs.com/insight/u-s-expands-critical-minerals-financing-and-bilateral-partnerships-under-trump/
[10] realcleardefense.com, https://www.realcleardefense.com/articles/2025/09/03/next_steps_for_dod_to_end_us_reliance_on_china_for_rare_earth_elements_1132445.html
[11] reuters.com, https://www.reuters.com/world/us/pentagon-sought-fresh-supply-13-critical-minerals-day-before-iran-attack-2026-03-04/
[12] transitionsecurity.org, https://transitionsecurity.org/mining-for-war/
[13] cen.asc.org, https://cen.acs.org/articles/104/web/2026/02/critical-minerals-rare-earth-ministerial-china-project-vault.html
Disclaimer :
This summary is based on publicly available information from various company and government sources. It is provided for educational and informational purposes only. Though it has been taken to ensure accuracy, we make no representations or warranties of the reliability of the information.
Forward-looking statements, projections and estimates are subject to risks as outlined in the original company disclosures. Readers should consult official texts for full context. Nothing in the articles constitute forecasting, investment or financial advice. Please seek guidance from a qualified professional before making any investment decisions.
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