What connects the White House’s approach to Pakistan and Panama, with a thread running through Canada, Greenland, and Ukraine? The answer could lie not in a grand theory of international relations but in the Trump administration’s realization that it is lagging behind China in the race for critical minerals—and its clear desire to catch up.
But what exactly are critical minerals? Why do they matter so much? Why does China dominate their supply chains and processing, and how long would it take for the United States to catch up? For answers, I turned to Gracelin Baskaran, the director of the Critical Minerals Security Program at the Center for Strategic and International Studies. Subscribers can watch the full discussion on the video box atop this page or follow the FP Live podcast for the audio interview. What follows here is a lightly edited transcript.
Ravi Agrawal: Let’s start with some basic definitions. What are critical minerals?
Gracelin Baskaran: Critical minerals are the minerals we need for national, economic, and energy security. But they also have a high likelihood of supply chain disruption. Sometimes this means that China controls that mineral. Sometimes it is a mineral produced in a single mine in one country, so if there was a disruption to that mine, it could undermine our supply chain security.
RA: What about “rare earths”—where do they fit into this?
GB: The U.S. Geological Survey has identified a list of about 60 critical minerals. Of those, 17 are what we call “rare earths.” Rare earths are actually everywhere, but the difficulty is finding them in a concentration dense enough to make them economical to extract.
RA: What are the main uses of rare earths and critical minerals? Why are they so important?
GB: Rare earths have entered the discourse because we use them in permanent magnets, which are used in every form of defense technology: fighter jets, warships, tanks, lasers, missiles. If we don’t have access to them, it undermines our ability to protect ourselves, which leaves us really nervous at a time of rising geopolitical tension, particularly in the Indo-Pacific. We use critical minerals at large in virtually every form of consumer technology and energy, which makes it crucial to our very existence.
RA: So there are critical minerals in smartphones, internal combustion cars, and electric vehicles. How much of these minerals are packed into those?
GB: I’m from Detroit, so I see it through the auto industry lens. A gasoline-powered vehicle uses about 32 kilograms of critical minerals, and electric vehicles use around 210. That’s a sixfold increase. A conventional gasoline-powered vehicle uses zero kilograms of graphite, but EVs use about 62 kilograms. That’s 1.2 times my body weight of a mineral I’ve never thought about. So the global energy transition uses significant quantities of new minerals that we haven’t needed before, but that we need a lot of now.
RA: Which countries are the main producers of all of these critical minerals?
GB: There’s a misconception that China produces all the minerals. Of the main minerals like rare earths, cobalt, copper, lithium, nickel, graphite, China is actually only a top-three producer for two of those. But they’re a top-three processor for all six, which means minerals from Africa and Latin America have historically gone to China for processing.
Some of the biggest lithium and copper producers are Chile and Argentina. South Africa is one of the biggest producers of platinum group metals; for cobalt, it’s the Democratic Republic of the Congo. But the challenge is that China has supply chain control because most of these minerals ultimately go there for processing.
RA: Talk a little bit about the numbers here. China has a huge monopoly in processing, but that’s also divided up between the heavy critical minerals and the lighter ones.
GB: Of the six minerals I mentioned, China processes between 40 and 90 percent worldwide. One reason we’re so worried about China’s export controls on rare earths this year is because they process about 70 to 80 percent of those. But there’s a difference between light rare earths and heavy rare earths, which are titled based on their atomic weight. China’s export controls this year didn’t touch light rare earths—partly because there is bigger diversification of where those light rare earths are processed globally. China processes about 60 percent of light rare earths. But China did restrict heavy rare earths this year, which they processed 99.5 percent of when those restrictions came out. This made it virtually impossible to get a permanent magnet that didn’t have Chinese heavy rare earths at the start of this year.
RA: Why is that? Is it because of the infrastructure required? Is it because of a willingness to tolerate environmental damage?
GB: China has an absolute advantage in many areas. First, geology—the U.S. has rare earths; we actually have the second-biggest-producing rare earth mine in the world. However, we don’t have a lot of heavy earths, although we’re particularly well-endowed with light rare earths. So for a lot of the transactions and support we’ve provided in the U.S., we know we need heavy rare earths from somewhere else.
Secondly, China worked through a very targeted strategy, lining up their foreign policy to get those rare earths from around the world alongside a domestic industrial strategy to process them at home. Third, processing rare earths is extremely energy-intensive. Separating a ton of rare earths uses about nine to 13 times as much energy as just taking them out of the ground. China used decades of effort to build cheap coal-fired power that allowed them to do that.
Fourth, it has a really big environmental footprint. In the U.S. and many European countries, we take a “Not in My Backyard” stance. But China was happy to absorb that environmental footprint in exchange for global dominance, which sustained their competitive advantage.
RA: When did China decide to start doing this? And how long would it take for America to catch up, if it did everything it possibly could?
GB: In 1910, the U.S. opened the Bureau of Mines, which was the U.S. government’s effort to have a coordinated approach. Until 1996, the Bureau of Mines coordinated our efforts, pushing research and development, managing data, and making sure we had the resources we needed. But when we closed the bureau, that’s where we ceded our advantage in a number of commodities. Rare earths were one of those: We actually used to be a top rare earth producer. We ceded our uranium advantage, from being the world’s top uranium producer to now being dependent on countries like Russia. At that same time, around the 1990s, China decided it wanted to become a superpower. It used strategies like the Belt and Road Initiative, targeted investment, and foreign policy to get those minerals from around the world.
On average, it takes 18 years to build a mine, from the time of deposit identification to the time of production. So the challenge that we face today is China now has a 40-year advantage. In the U.S., we have to open new mines and build processing facilities to counter that dominance. But we’re probably looking at a decade.
RA: Is it fair to say that critical minerals have become a much more important part of policymaking in the U.S. under the Trump administrations, or is this something that [Barack] Obama and [Joe] Biden also paid attention to?
GB: Minerals are one of the few areas of bipartisan support. In 2017, President [Donald] Trump passed the first executive order on critical minerals. The Biden administration built on those efforts because two and a half years ago, China restricted germanium and gallium, which are crucial for our semiconductor industry. Over the course of the Biden administration, we had export controls on graphite, tungsten, and antimony—so we did double down our efforts.
However, there’s been a rapid acceleration in 2025. Domestically, the U.S. government became the biggest shareholder in MP [Materials], a rare earth company. Minerals have also defined our foreign-policy approach to Africa, Ukraine, Saudi Arabia, and South America. Even in an “America First” era, we realized less than a month after Trump’s inauguration that we were not going to meet our minerals needs alone, which is when minerals became really embedded into our foreign policy.
RA: So if critical minerals define Trump’s foreign policy in his second term, how are you seeing that play out in a range of different countries?
GB: First, the U.S. is forging new alliances based on minerals. Three or four years ago, the idea that we would lean into Pakistan, and that a Pakistani official would be in the Oval Office opening a box of minerals in front of the president, sounded like a movie. But countries present themselves to this administration by showing the value addition they have from a minerals perspective.
Second, historical alliances have been redrawn. We’ve had an oil-for-security agreement with Saudi Arabia, and over time we needed their oil less. But President Trump signed a memorandum of cooperation for minerals, and now the U.S. government is going to be a 49 percent owner of a rare earths refinery in Saudi Arabia—which has phenomenal heavy rare earths.
Third, we’ve approached bilateralism and multilateralism centered around minerals. There was a real concern in January that the U.S. was not going to participate in multilateralism. But the G-7 cooperation has really centered on critical minerals, talking about standards and working to find a price floor mechanism to create an ex-China marketplace. Bilateral agreements with Japan, Australia, Saudi Arabia, and Ukraine have centered on minerals. So our international engagement has not been driven by aid or security efforts, but by minerals.
RA: Critical minerals often feel really weaponized. Part of that is because China flexed its muscles, especially in the last year, by restricting the exports of critical minerals and rare earths. Do you think China overplayed its hand?
GB: China absolutely overplayed its hand. At the start of this year, it was hard to see how other countries were going to engage with the Trump administration. But those rare earth export controls that came in this year were not targeted at the U.S.—they hit every country. Suzuki had to stop producing in Japan; European car companies had challenges with getting supplies. The export controls became a mobilizing call to accelerate efforts to create a resilient supply chain beyond China—now it’s a ticking clock before China loses that leverage.
RA: This acceleration you’re describing happened despite very hostile language from the White House, especially in regards to Canada and Greenland and strong-arming Ukraine as they looked to negotiate a peace deal. One might imagine that would drive these countries apart, but you’re saying China’s actions brought them together.
GB: Absolutely. Minerals were the rallying coordinating effort for the G-7+ at the G-7 summit. First, they need resilient supply chains. Second, China has overproduced minerals. Chinese companies in Indonesia, for example, have increased nickel production by 400 percent in the last five years. This has forced prices to come down so low that Western companies like BHP in Australia or Glencore in New Caledonia went out of business, increasing China’s dominance. As a result, countries have come together to work together on price support, keeping Chinese investment out, and preventing China from acquiring new projects. So it really did become the rallying cry even though the U.S. is in a complicated standing with a lot of these countries, including Canada, who hosted the G-7.
RA: What does the U.S. need to do in the next few years to catch up with China on supply chains, and eventually processing?
GB: This is all very expensive, so we’re going to need capital. In the U.S.-Australia deal, each country pledged to put a billion dollars forth in the next six months. But it’s such a long-term industry; globally, it takes 18 years to develop a project, and in America, it’s 29 years. So capital intervention is really important to try to address some of those challenges.
The second thing is technical know-how. China’s rare earth export restrictions in October prohibited Chinese nationals from working on rare earths—production, processing, permanent magnet manufacturing—anywhere outside of China without explicit permission from the government to limit the leakage of technical know-how. We’ve just woken up to the reality that we don’t even know how to do some of these refining processes, so that’s where we need countries like Canada and Australia, where about two-thirds of the top 12 mine engineering programs sit.
Even if the U.S. wants to do everything here, we have less than 1 percent of the world’s cobalt, nickel, and graphite, so we’re going to need to partner with countries where that feedstock is. It’s forced cooperation to ensure that even if we build those refining capabilities here or in our close-knit allies, the minerals come from a farther reach, which is exactly what China did.
RA: Are you saying China doesn’t have a stranglehold on all of those countries with resources? What would it take for America to get in on that game?
GB: There’s much greater competition for these resources today compared to five or 10 years ago. Countries are looking to get better deals for their minerals and get boosts in infrastructure, jobs, local value addition, and the development of new industries. Some of the new players on the scene—the [United Arab Emirates], Saudi Arabia, Australia, Canada, the U.S., certain European countries—are making much bigger plays. This is particularly important in Africa, where resources are driving tension in countries with rapidly growing youth populations. They’re trying to grab a larger share of benefits to stay in power, so they’re looking at who can give them the best package.
RA: Where does recycling fit into this? So many of these critical minerals have been mined already; they exist in our devices and cars. Could there be a way of reusing that in other products, and could America make a push to be a leader in recycling?
GB: This administration is certainly prioritizing recycling, but we are only just starting to develop an understanding of how to recycle rare earths. Early on in this administration, the government was looking at imposing a black mass export ban, which would make it illegal to export permanent magnets so that China could get the rare earth back out of them. The difficulty is we don’t have the capability to recycle domestically, which means if we ban exports, we will just have landfills full of stuff.
So we’re now investing in understanding how to recycle. The IEA [International Energy Agency] has estimated that we’ll meet maybe 20 percent of future demand by recycling, but I would challenge that number. Ten years ago, we couldn’t get 98 percent of lithium out of a lithium-ion battery, but we can today because we invested in that research and development. Recycling will be a really important part of our security efforts, but we’re never going to meet all of our demand going forward through secondary material, because our demand is growing significantly.
RA: How much of our thinking around the environment has to be adapted? The early leaders on critical minerals either have the ability to repress their people or shut down dissent over environmental damage, or are in poorer countries where the public doesn’t have the means to make that a big issue. What should the West consider as it looks to rebalance supply dominance?
GB: Environment has been a very politically charged matter as it relates to mining. The Democrats talk a lot about the environment, social governance, and ESG, while Republicans push away from that narrative. I would challenge both sides, because ultimately the environment is crucial to the commercial viability of operations. When communities stop a mine, or a permit gets taken to court for environmental reasons, projects can be stopped for decades. But managing the environmental externalities of mining is crucial to ensuring that that project has a social license to operate. Every year, Ernst and Young surveys mining executives, and social license to operate is usually the first or second most sensitive issue for mining executives.
Companies are doing really innovative things to manage environmental externalities. Mining is much cleaner now than it was 30 years ago—companies have invested into ensuring that there is no acid mine leakage into soil, that they are not polluting water and dumping in a way that undermines food security. It’s important that people understand that because the environment is such a political challenge.
RA: The Trump administration and China have weaponized critical minerals to varying degrees, and it’s become a big part of foreign policy writ large. Will this be the case just as long as Trump is in power, or will this be the new foreign-policy norm over the next couple of decades?
GB: 2025 was a wake-up call to us, similar to what Japan experienced in 2010, when China cut Japan off of rare earths. We can learn from the Japanese, because Japan now has the most progressive mineral security policies. Japan owns 50 percent of a rare earth project in rural Namibia called Lofdal; they have impressive stockpiling requirements, not only for companies, but also as a federal government; they’ve been very aggressive in innovation and will pilot rare earth deep-sea mining early next year. It was a necessary wake-up call, and 15 years later, it’s never left them.
Similarly, I don’t think the 2025 wake-up call will leave us. The U.S. auto manufacturing industry stopped this year as a result of this disruption, so it’s not just a distant national security issue, but affects the jobs and livelihoods of all Americans. However, I don’t know if we’ll always see this level of intensity. It’s very likely that this stays for three to five years, then becomes a more sustainable effort to support our mineral security. Mineral prioritization is here to stay, but maybe not at the level of 2025, which was forced on us by China’s restrictions in April.
RA: What happens if China does that again?
GB: My fear is that China is doing it in a way that’s not going to stop. 2024 was a 10-year high in China acquiring mines from around the world, and a lot of these mines aren’t in production yet. They’re dormant weapons: Since they aren’t currently producing, they’re not in our supply chain calculus. So there is a very real world where, if the U.S., Australia, and Europe pull their foot off of the gas pedal, China increases weaponization.
This is why it’s so important that we institutionalize a domestic coordinated minerals effort. Since closing the Bureau of Mines, there are now 15 government departments working on minerals without that coordinating function. We need to think about a long-term sustainable mechanism for the U.S. government, because that is the level of coordination that China has—and I’m not sure we have fully wrapped our head around that.
RA: Do you think the Trump administration is doing enough?
GB: The Trump administration is working on minerals from the standpoint of a national crisis, so it hasn’t thought about long-term institutionalization—an agency to continue these efforts beyond this administration. We don’t want a rebound that can come with a change in government. We have a democracy, and we need to institutionalize some of these mechanisms for longevity, which will require working with Congress more than we have.
