U.S. defence push hits China minerals snag: Reuters

President Donald Trump’s drive to eliminate Chinese critical minerals from U.S. defence supply chains by the start of 2027 is running up against the reality that domestic mining and processing capacity is years behind schedule, according to a Reuters report citing industry executives and analysts.

The administration has invested tens of billions of dollars across almost 150 critical minerals projects and last week tightened rules limiting waivers that allow defence contractors to source materials from China and other prohibited countries, Reuters said on Monday.

However, U.S. producers still cannot supply enough rare earths, magnets, tungsten and tantalum to meet military and industrial demand. Trump’s Jan. 1 deadline will be difficult to meet without continued imports or broader waivers, analysts told the news outlet.

The challenge underscores how difficult it has been to rebuild a domestic critical minerals industry after decades of reliance on Chinese mining, refining and magnet production. The U.S. produced only about 300 tonnes of rare earth magnets in 2025, versus demand of roughly 48,000 tonnes, and is expected to reach only about 5,000 tonnes this year. Tungsten and tantalum have not been mined domestically for years.

Project Vault

To bridge the gap, the administration has launched a $12-billion strategic stockpiling effort known as Project Vault, although that could itself require purchases of Chinese-produced minerals because alternative supplies remain limited.

Companies including MP Materials (NYSE: MP), ReElement Technologies and Ucore Rare Metals (TSXV: UCU; US-OTC: UURAF) are expanding U.S. processing capacity, but executives say building an independent supply chain will take years rather than months.

Industry groups also argue persistently low prices – which they attribute in part to Chinese state support – have made it difficult to finance new mines and refineries.