US Critical Minerals Boom Struggles To Match China on Cost and Scale

Patriot Critical Minerals of the US plans to dig into a long-abandoned mining site in the sparsely populated state of Nevada to extract tungsten, an important raw material with industrial uses ranging from aerospace gear to common cutting tools.

The company, with only that single asset, is applying to the US departments of defence and energy for funding – now more readily available as President Donald Trump tries to bring critical-minerals production onshore in case China makes the resources harder to obtain following export curbs imposed over the past year.

“Obviously the current administration is very pro-development and driving a lot of these things,” Patriot CEO Brodie Sutherland said in an interview. But Patriot’s target to begin operations by mid-2029 at the US$300 million, 300-acre (121-hectare) project has run up against a shortage of government staff available to process applications, which in his case includes an environmental assessment. Trump cut federal government civilian employment by more than 10 per cent in 2025.

Patriot’s story appears to reflect a broader trend.

Since Trump returned to the presidency last year, the critical-minerals sector has been flooded with money, much of it from government agencies. Yet, analysts contend that the industry is too young, that the funding is too scattershot, and that environmental rules are too strict in some places for US producers to compete with Chinese imports on price.

“The impact seems to have been to shift capital around and, perhaps, move additional production and processing capacity to the near term,” said Jon Hykawy, president of the Toronto-based industry advisory firm Stormcrow Capital.Trump’s administration has invested a total of US$18.6 billion in critical minerals, according to industry news outlet The Northern Miner. The 17 rare earth elements – deemed “rare” because they are hard to extract and process, rather than for their scarcity – are among those minerals.

Last year, the Pentagon signed an agreement with MP Materials, the biggest US producer of rare earth metals, to invest US$400 million and acquire up to a 15 per cent stake.

USA Rare Earth, another top name in the industry, said in July that it would receive US$1.6 billion in “potential funding support” from the Department of Commerce and had separately closed a US$1.5 billion financing scheme.

The company had plans to increase magnet-making capacity in the state of Oklahoma and advance a Texas mining development towards commercial production from 2028. It was anticipating magnet-manufacturing capacity of up to 10,000 tonnes per year by 2029.

“More broadly, the rare earth industry has made meaningful progress over the past several years, with increased investment alongside growing bipartisan policy support for strengthening critical mineral supply chains, although building resilient and diversified supply chains remains a long-term effort,” a USA Rare Earth spokeswoman said.

China maintains about 60 per cent of the world’s rare earth mining production and about 90 per cent of processing and refining, according to the Centre for Strategic and International Studies, an American think tank.

In recent years, Beijing has increasingly leveraged its market dominance by tightening export controls on rare earths and other critical minerals, including tungsten. Specifically, stung by US tech and trade restrictions, China prohibited exports of the critical minerals antimony, gallium and germanium to the US in 2024. Even though it suspended the ban in November last year, Chinese customs data showed that shipments to the US of key antimony and gallium products, as well as most major germanium products, had remained muted.

This year, Beijing also placed 10 US entities, including MP Materials and USA Rare Earth, on an export-control list. Reaching China’s level of critical-minerals output in the US at competitive prices would take years because of the technical complexity involved in scaling up production, analysts have said.

US rare earth prices were two to five times above Chinese spot levels, according to an S&P Global analysis published in May.

US momentum had reduced American reliance on Chinese imports since 2022, but that reliance had not fallen further since last year, Hykawy said.

“The USA is moving towards independence on rare earths, but that will demand continued investment and contributions from mines in other nations,” he said.

American developers of new mines also face varied environmental rules from state to state, with restrictions common in national forests or near key watercourses, said Julie Klinger, an associate professor at the University of Wisconsin-Madison’s Nelson Institute for Environmental Studies.

Buyers of minerals are still finding ways to source from China because of its continued low prices, while looking to domestic suppliers as a “hedge” against geopolitical events,she said.

It was also unclear how much of the announced funding would pan out, analysts said.

Some funding arrives too suddenly instead of being spread over several years, retired US general Charles Flynn warned in a report last month by Geomechanics.io, a platform for geotechnical engineers. One US$200 million grant left nothing for the following 18 months, the report said.

“There are a lot of hopefuls and just a lot of noise in the sector,” Klinger said. “There’s a lot of money being thrown around right now, and to the extent those dollars translate to a supply-chain buildout, the best-case scenario is we’re poised to see further growth.”