2024-25 Policy Recommendations
SUMMARY
Unleash the power of the U.S. government by leveraging its consolidated financial authorities to assume more risk to incentivize private capital investment in critical mineral projects. (Specific examples, such as risk insurance are provided below).
Establish the federal government as the critical minerals and rare earth elements (CM/REE) off-taker of last resort to further incentivize private capital, create project and investment certainty, and resupply America’s national stockpiles. (Short-and-long term)
Determine the most urgent and threatened CM/REEs and establish government-agreed price floors to provide certainty and “insurance” for the investor.
Reform the permitting process by executive order to break through the bureaucratic logjam and unleash American innovation and investment in mining, processing, and other critical industrial domains. (Long-term)
Commission a study on the feasibility of mandating that all defense critical materials and technologies become CCP-supply chain-free within five years to drive domestic and allied investment, permitting reform, and guarantee off-takes.
Evolve the U.S. Development Finance Corporation (DFC) into America’s Sovereign Wealth Fund by centralizing the duplicative investment and financing arms into a targeted organization that is data-driven, profitable, and focused on American national interests.
Require the U.S. Geological Survey to map the resources, ownership, capabilities, and supply chains of critical technology minerals beginning with Five Eyes.
Create a Five Eyes-like Critical Minerals Agreement that harmonizes standards and establishes a free-trade zone on CM/REEs generating a fair and robust trading space, synchronizes allied resource mapping, leverages collective resources and capabilities, and coordinates processing and refining development programs amongst these vital allies. This will assist in leveling the playing field with China.
Expand the remit of the National Energy Dominance Council to become a Critical Mineral Supply Chain Commission (CMSCC) tasked with creating a whole-of-government strategy and including a CEO advisory council to ensure continuous input from industries across the entire CM/REE value chain.
Introduction
America’s national security and economic prosperity are directly tied to stable and secure supply chains for critical mineral and rare earth elements (CM/REE). Today the United States and its allies are reliant on a strategic competitor—the Chinese Communist Party (CCP)—for these raw and processed minerals. The CCP has and will continue to weaponize its dominance of critical minerals mining and processing.
The time for hand wringing is over. The time for bold action to future-proof our industries, protect our national interests, and secure our economy is now.
The recent Critical Minerals Executive Orders are an excellent step in returning America to control its own minerals supply for energy, military technologies, medical equipment, and regularly used high-tech products. These outline necessary preliminary actions to reduce our reliance on China, creating a pathway for America’s domestic capacity and production, and generating new jobs. A short-term strategy is also imperative and urgently needed. America must work closely with its allies, leveraging resources and processing capacity today, while mobilizing resources for tomorrow. Regionally diversified, increased processing capacity is needed now; and this will necessitate an unprecedented level of public-private collaboration.
PRISM’s recommendations are the distillation of over four years of industry-led work in partnership with the Silverado Policy Accelerator and other knowledge partners, that brought together the entirety of the critical mineral/rare earth element (CM/REE) value chain from mining companies and investors through to the original equipment manufacturers (OEMs) to include automotive, energy, high-tech, medical, as well as allies and partners from across Europe, the Indo Pacific, Africa, and Latin and South America.
PRISM is the only initiative to do so.
Recommendations
Urgent Action Necessary
1. Identify the urgently needed and/or threatened CM/REE and:
a. Establish price floors for each.
b. Designate the U.S. government as the off-taker of last resort.
c. Implement an insurance program like USDA’s commodity insurance program. And,
d. Convene a series of matchmaking events to establish closed-loop supply chains for the identified CM/REE with the entire value chain represented.
Short-Near Term to Long-Term Actions
2. Closing the Critical Mineral and Rare Earth Element Value Chain: Streamline Domestic Policies
a. Expand the remit of the National Energy Dominance Council to become a Critical Mineral Supply Chain Commission (CMSCC) to create a truly whole-of-government national critical minerals strategy. Task the CMSCC with:
i. Conducting a government-wide review of all critical mineral working groups, task forces, offices, and agencies to identify areas of responsibility and existing gaps, with the aim of eliminating redundancies, streamlining operational efficiency, and centralizing CM/REE operations in one single federal agency with a requisite budget. (To be delivered within six (6) months and presented to the CMSCC.)
ii. Identifying ALL federal funding and tools available for CM/REEs; reviewing and eliminating the obsolete and/or ineffective; requiring coordination on a strategic level of the deployment of all federal funding for CM/REE projects.
iii. Establishing a CEO-level advisory council to ensure active input from industries across the CM/REE value chain and coordination/deconfliction of projects and investments of critical importance to the United States.
iv. Developing guidelines for data collaboration, information sharing, and transparency to create a level marketplace for CM/REE.
v. Operationalizing a national criticalminerals.gov platform for businesses and investors to access clear, centralized federal resources—the one-stop shop for the federal government’s CM/REE efforts.
b. Convene a working group to standardize the U.S. government's critical minerals lists to eliminate discrepancies and streamline definitions, such as focusing on the CM/REEs in critical technologies and infrastructure. (See Silverado Policy Accelerator’s Strategic Defense Critical Minerals Production Dashboard)
c. Issue an Executive Order accelerating the permitting process, which includes a sunset provision that automatically approves new or expanded permits that meet or exceed revised and streamlined standards after a period of no more than 60 days.
3. Unlocking Holistic Financing & Other U.S. Government Levers
a. Re-authorize, expand, and modernize the U.S. Development Finance Corporation (DFC) into America’s Sovereign Wealth Fund by centralizing the duplicative investment and financing arms into a targeted organization that is data-driven, profitable, and focused on American national interests. (Via DFC reauthorization or the CMSCC)
i. Expand DFC equity tools.
ii. Subsume the following, consolidate and streamline staff and budgets:
Millennium Challenge Corporate
Prosper Africa
USTDA (feasibility studies)
SCIF “Supply Chain Integrity Freedom Office” (USAID)
Defense’s Office of Strategic Capital (or require coordination)
Energy’s Loan Program Office
iii. Expand DFC’s definition of eligible recipients to those of “national security” and/or “economic security” concern and eliminate economic status as a determining criterion.
b. Create funding incentives or exemptions for off-takers to pay premiums for sustainably sourced minerals through credit ratings or third-party validation.
c. Implement an “insurance” program like the Department of Agriculture’s USDA (Federal Crop Insurance Program) that assists the commodities markets. Intent to bridge the current untenable gap to full operation and supply.
d. Reform S-K 1300 (43-101 U.S. equivalent) or eliminate its requirement for national security projects. Stock markets bet against a company going through 43-101/SK1300 compliance because it is complex and time-consuming. The USG is layering its “de-risking” regulations step-by-step throughout the project instead of de-risking the overall project. This needs to be dramatically simplified to shorten the timeline and truly de-risk a project.
4. Strengthen International Partnerships: An Allied Response for Strategic Competition
a. Establish a Five Eyes Critical Minerals Agreement (possibly expand to include other countries such as Japan) for tariff-free supply chains. Include a shared database of capabilities and resources, with pre-vetted and pre-approved suppliers.
i. Expand Defense Production Act provisions to fund long-term critical mineral projects, extending timelines for loan guarantees.
ii. Require the U.S. Geological Survey to map the resources, ownership, capabilities and supply chains of minerals necessary for critical technologies beginning with Five Eyes and then the Global South.
b. Strengthening Africa’s CM/REE Posture
i. Reauthorize the African Growth Opportunity Act (AGOA) with capacity-building initiatives, modernized governance policies, and inclusion of critical minerals agreements (CMAs) to incentivize capacity-building for domestic mineral processing.
ii. Establish a U.S.-Africa (select nations) Strategic Mineral Cluster pilot project to create a CM/REE closed-loop value chain to include energy, transportation, processing, and off-takes with harmonized standards, incentives, tariffs, etc.
i. The SMCs are geographic locations around which the value chain of CM/REE is developed, built, and expanded, to include mining, processing, and refining, creating a closed-loop supply chain.
ii. The objective is for host nations to retain a greater percentage of their raw materials and establish new economies such as processing.
iii. U.S. scientific, educational, and knowledge transfer will build long-term capacity, create lasting partnerships, and build access to CM/REE resources in the long term.
c. Expand the SMC pilot to other regions and allied nations.
5. Increase Transparency & Modernize the Supply Chain
a. Commission a study on the feasibility of mandating that all defense critical materials and technologies become CCP-supply chain-free within five years to drive domestic and allied investment, permitting reform, and guarantee off takes
b. Establish a vetted/trusted supplier list through a system for designation and accreditation.
c. Implement end-to-end value chain traceability standards for CM/REE to ensure that materials acquired from uncertified sources are excluded or receive appropriate tariffs.
d. Create incentives to encourage the adoption of higher standards across the supply chain, including preferential access to federal contracts, tax breaks, exemptions from tariffs, and other mechanisms.
e. Establish standards and processes for using AI tools to map supply chains, predict vulnerabilities, and optimize operations, including the development of public-private data-sharing platforms to enhance resource identification.
f. Establish standards and incentivize the reusability of minerals from end-of-life products. The CMSCC should also develop an incentive program to create a recycling and reprocessing industry within the United States.
6. Revitalize and Modernize U.S. Tools to “Stockpile”
a. Congress should appropriate funding to support the National Defense Stockpile Transaction Fund (NDS) authorized in the FY 2023 NDAA, specifically to include the most urgent minerals necessary for military technologies.
b. Authorize additional federal funding for research and development of cleaner production mining and refining processes to allow for scaling that will lead these processes to become more globally cost-competitive.
c. Direct the Defense Science Board to conduct a six-month study to determine the feasibility of expanding existing stockpiles of CM/REE for national security needs to mitigate future disruptions. This report should be delivered alongside the CMSCC report and Congress should hold hearings on their respective findings.
d. Require the Department of Defense to define a base threshold of minerals needed over the next five years, communicate to the defense industrial base, and issue contracts accordingly to secure a minimum, viable threshold.
7. Strengthen Supply Chain Resilience
a. Establish standards and incentivize the reusability of minerals from end-of-life products. The CMSCC should also develop an incentive program to create a recycling and reprocessing industry within the United States.
b. Require that any facility that receives Department of Energy or Department of Defense funding for the processing of black mass be restricted from exporting any material from the United States, except to Five Eyes partners for the express use of these resources within those countries, not for further re-export.
c. Require the Defense Logistics Agency Strategic Material Recovery and Reuse Program to pilot a recovery program to extract strategic materials from end-of-life hard disk drives used in the more than 4,000 U.S. government-owned data centers.
8. Improve Infrastructure and Workforce Development
a. Invest in necessary infrastructure to include energy, transportation, and storage.
b. Audit and optimize federal job training programs to focus on advanced manufacturing skills for the critical minerals value chain. Require the Department of Labor to review ALL job training programs, determine efficacy, eliminate those below 50%, and reallocate those funds to advanced manufacturing, mining, processing, semiconductor, and magnet industries.
c. Include bilateral academic exchanges within Critical Mineral Agreements for technical assistance, capacity building and closed-loop supply chain opportunities.
d. Identify and strengthen U.S. university mining and advanced manufacturing programs, partnerships, and apprenticeships through public-private partnerships.
e. Incentivize universities and colleges with a ‘moonshot’ like program for critical defense technologies and supply chain vulnerabilities modeled on the Defense Innovation Unit—providing seed funding for innovative projects.