Finding better ways to handle underground rocks could be the key to US national security.
“Critical minerals” is the umbrella term used to describe the raw materials considered essential to the economy that are especially vulnerable in supply. Mined and extracted across the world, they’re used everywhere from electric vehicle batteries to smartphone touchscreens and semiconductors.
“We just think about minerals as rocks in the ground, but they literally are what’s driving the new economy,” said Ademola Adesina, cofounder of the supply chain technology startup Sabi. “And we can’t build an advanced manufacturing economy in the US or Europe without them.”
“We just think about minerals as rocks in the ground, but they literally are what’s driving the new economy.”
Ademola Adesina, Sabi
China controls 90% of processing and refining critical minerals, according to the Council on Foreign Relations, which has become a cause for concern for policymakers and government leaders — and a driving factor for several fast-growing startups.
Sabi, for example, is developing a platform that helps streamline mining in Africa, which houses about 30% of the world’s critical minerals reserves. The Lagos-headquartered startup currently works with about 70 small-scale, mechanized mines, per Adesina, helping them track materials, meet environmental standards and find funding.
There are also startups building hardware to onshore the critical minerals supply chain. Besxar, which emerged from stealth in October and is headquartered near DC’s Navy Yard neighborhood, is building chip-manufacturing fabships to be launched into space, where they require less water and energy, per founder Ashley Pilipiszyn.
The startup is planning space-based mineral refining, with 12 launches with SpaceX slated over the next year, she said. It’ll focus primarily on aluminum and gallium, which is used in semiconductors because of its ability to endure high temperatures. China has a near-monopoly on gallium production.
“We’re part of the supply chain,” said Pilipiszyn, whose firm has a contract with the US Navy. “We’re an American company on an American rocket, manufacturing in space, bringing them back to the US soil.”
Robert Johnston, a natural resources expert from the University of Calgary, is seeing hesitance from VCs in the sector, mainly because it’s typically very capital intensive. But some startups are closing rounds, including Sabi — Adesina has raised $70 million in venture capital from several international investors, including Norrsken22, which focuses on scaling business in Africa.
Pilipiszyn also noted she’s seen interest from VCs recently, though she declined to share how much money the startup has accrued.
“A lot of people need a lot less convincing today than they did two years ago,” she said. “I think it’s become very clear we are running out of options across the board when it comes to competing with China.”
Why is this such a big deal and what solutions are out there? Here’s what you need to know.
➡️ Jump to a section:
• What qualifies as ‘critical minerals’ or ‘rare earths’?
• Where do these materials come from?
• Why is the US so reliant on other countries for this?
• What’s the problem with depending on China and other nations?
• What is the federal government doing about this?
• How hard would it be for the US to onshore critical minerals supply chains?
What qualifies as ‘critical minerals’ or ‘rare earths’?
That depends on who’s asking, but the US government lists 60 minerals as critical, and they vary in importance. The list includes everything from copper to cobalt and silicon to silver.
NATO says 12 critical minerals are essential for building defense systems, including aluminum for tanks and aircrafts. Tungsten also makes metals more wear-resistant in crafting ammunition and jet engines.
Rare earth elements are a subset of critical minerals that are determined to be especially integral to the US economy; they’re used in products like smartphones and advanced defense systems. They mostly have unusual names. You may have heard of neodymium (key to the strong magnets used everywhere from EV motors to loudspeakers), but how about dysprosium (think hard drives) or yttrium (lasers)?
To be clear: Not all critical minerals are considered rare earths, but all rare earths are considered critical minerals.
The federal government’s index was updated in 2025 to add 10 new minerals, based on analysis and feedback across agencies. It’s a living document, updated at least every two years.
Where do these materials come from?
Critical minerals can be found everywhere, including natural pockets of the Earth and ocean, as well as in space. They’re also plentiful in discarded tech products like used batteries, or waste byproducts like the red sludge created during aluminum processing.
But it’s an exhaustive process to get these resources to a point where they can be used.
When a critical mineral is mined, usually other byproducts come with it. Extractors will use high-heat or chemicals to purify the minerals so they can then be used. That process is often highly pollutive through emitting greenhouse gases and contaminates nearby water supplies.
China overwhelmingly controls the critical minerals supply chain, and 99% of rare earths supply, according to the Council on Foreign Relations, a nonpartisan US think tank.
Why is the US so reliant on other countries for this?
The federal government has seesawed in its critical minerals prioritization, according to Johnston, the natural resources expert from the University of Calgary.
The same year World War II started, Congress enacted the Strategic and Critical Materials Stock Piling Act — legislation empowering the government to purchase and store critical minerals — mainly to strengthen defense purposes.
But this prerogative waned toward the end of the Cold War, Johnston said, as President George H.W. Bush pushed to redirect spending from military operations to humanitarian issues abroad. In the ‘90s, the Pentagon went on to sell its stockpile, including minerals as the agency downsized and considered the supply excessive.
Paired with the overall deindustrialization of the US and European countries, this offered China an opportunity, said Adesina, the founder of Sabi.
“I don’t think they’ve done it via any nefarious means,” Adesina said. “They just saw the opening, and were a bit more clear eyed about the importance of those minerals and pursued it.”
What’s the problem with depending on China and other nations?
China has made clear it will leverage its control over the supply chain to promote national defense priorities. In 2010, for example, China suspended rare earth exports to Japan for two months after Japan’s navy arrested a Chinese fishing boat captain. That stoked fears in being able to build infrastructure like hybrid cars and solar panels.
Since then, Japan has worked to lessen its dependency for rare earths, moving from relying on China for 90% of the supply to just 60% as of this year.
In the current trade war between the US and China, things have fluctuated. After China announced restrictions on critical minerals and rare earths exports, the White House walked back some of its tariff orders. China then relented, suspending its curbs on lithium and gallium.
“They are very good at waging economic warfare tactics against us to curtail that access,” said Steve Place, a critical minerals advisor, investor and founder of the national security innovation startup Corillian. “And that’s very scary.”
What is the federal government doing about this?
Shifting the critical minerals supply chain to the US is an overwhelmingly bipartisan issue, according to Johnston, of the University of Calgary.
Overall, he said, there’s continuity in rhetoric between the former administration and this one.
Biden put $120 billion toward battery and critical mineral supply chains, including tax credits for processing and refining lithium for batteries and tariff hikes on critical minerals imports from China. He also stewarded the CHIPS and Science Act, which focused on boosting semiconductor manufacturing in the US. Trump now wants to direct that program to focus more on critical minerals supply.
“Policymakers on both sides of the aisle and industry and consumers and investors recognize that there is a need for strategy around critical minerals,” Johnston said.
The Department of War this fall became the largest shareholder in the US rare earths mining and processing company MP Materials with a $400 million preferred stock purchase. The Department of Energy now has a 5% stake in Lithium Americas to source the critical mineral domestically.
Members of Congress have also taken up the cause. Rep. Burgess Owens (R-UT) put forward legislation to boost mining education in the US, and Sen. John Hickenlooper (D-CO) introduced a bill to set up a pilot domestic critical minerals processing program.
A key part of US strategy in having more control in the supply chain is through establishing allies and partnerships with Canada, Australia and countries in Europe, Johnston noted. Ukraine and the US also inked a deal this spring for America to access the country’s mineral resources in exchange for military aid.
How hard would it be for the US to onshore critical minerals supply chains?
Bringing critical minerals supply chains to the US is going to be difficult, several experts said, though there are several efforts underway.
The US is known to have significant deposits of lithium (like in the Blue Ridge Mountains near Charlotte), and there’s a push to recover more by recycling batteries. But there’s a workforce shortage and a lack of technology to do this in an environmentally conscious way, said Place, the advisor and investor behind Corillian.
Opening a mine in the US can take nearly 30 years, largely thanks to an extensive permitting process. Place wants to see a balance of streamlining the process — Trump recently put out an executive order demanding this — while ensuring environmental standards.
Despite the extensive work and investment to be done, Place is reassured by the innovation he sees founders working toward.
“The good news is, I think there is a generation of entrepreneurs that are going to rise to the challenge,” Place said, “and find ways that we can compete with our adversaries.”
