Improving US critical minerals supply chains for profitability and power

ive model that allows private capital to flow into critical minerals, not through direct subsidies or market manipulation, but by creating a stable, attractive investment environment. By focusing on strategic funds, pricing power, investment risk reduction, and policy stability, the US can build a competitive market that can stand up against China’s state-directed industrial planning.

Currently, China dominates the critical minerals supply chain because it has a coherent financial strategy that shields its companies from losses and allows long-term control. In contrast, the US expects each player in the supply chain to be profitable independently, leading to higher costs, greater risks, and systemic vulnerabilities. This fragmented approach discourages private investment, especially in small, opaque, and volatile markets like critical minerals.

To break free from this cycle, the US should leverage its strong capital markets and focus on integrating the entire supply chain. By establishing strategic funds managed by the private sector to build vertically integrated supply chains and raising domestic commodity prices through tariffs and sourcing requirements, the US can insulate domestic producers from market manipulation and attract long-term investments.

Reducing investment risk by stabilizing prices and implementing long-term policy certainty is crucial for attracting private capital. Mechanisms like government-backed trading houses, price floors, and stable offtake agreements can provide the stability and confidence that investors need to commit to critical minerals projects in the long run.

By creating a market-based strategy that fosters competition and attracts private capital, the US can build a resilient critical minerals supply chain that can rival China’s state-dominated model. Rather than trying to match China’s subsidies and market control, the US should focus on creating a stable, profitable environment that encourages private investment and secures its supply chain for the future.