President Donald Trump has activated emergency powers to enhance the United States’ ability to produce critical minerals, and potentially coal, as part of a broader strategy to reduce dependence on foreign imports. In an executive order signed Thursday, Trump utilized the Defense Production Act to secure financing, loans, and other investment support aimed at boosting domestic production of critical minerals and rare earth elements.
The U.S. International Development Finance Corporation, in collaboration with the Department of Defense, will oversee the financing of new mineral production initiatives. The order also calls for faster permitting of mining and processing projects, alongside a directive for the Interior Department to prioritize mineral production on federal lands.
This move comes in response to longstanding concerns about China’s dominance over the processing of vital minerals, which are essential for a wide range of products, from batteries to defense systems. These materials are considered crucial for both national energy and security.
As a result of the announcement, shares of critical mineral mining companies in Australia and China dropped significantly on Friday. Australian lithium miner Liontown Resources Ltd. saw a decrease of up to 7.1%, while Syrah Resources Ltd., a graphite producer, fell by 9.8%. In China, Tianqi Lithium Corp. and Ganfeng Lithium experienced losses. Several coal mining stocks, including New Hope Corp. and Whitehaven Coal, also declined by nearly 4%.
In contrast, shares of MP Materials Corp., a U.S.-based rare earths miner, rose as much as 4.6% in after-hours trading, while coal producer Peabody Energy Corp. saw a gain of more than 2%.
Despite having some critical mineral resources, the U.S. remains highly reliant on imports, posing potential economic and security risks, according to the White House. The administration noted that the U.S. is dependent on foreign sources for at least 15 critical minerals, with 70% of rare earth imports coming from China.
The executive order also signals a push for collaboration with the private sector to build a resilient and secure domestic supply chain for critical minerals. The initiative covers a wide array of materials, including uranium, copper, potash, and gold, as well as any other elements deemed necessary by the chair of the National Energy Dominance Council. Notably, this designation could potentially include coal.
Government support aims to bolster domestic production to meet the needs of the Department of Defense and private industry, especially amid growing concerns about global shortages. China has already begun imposing export restrictions on key materials, including germanium, gallium, and antimony.
The Defense Production Act, originally passed in the 1950s under President Harry Truman to accelerate steel production for the Korean War, has been a tool used by various administrations to address domestic supply needs. President Joe Biden invoked the law to support U.S. production of critical minerals, adding battery materials like lithium, nickel, and cobalt to the list of covered items. Trump previously used the law to increase mask production during the COVID-19 pandemic.
Earlier this month, Trump previewed his plans during his Joint Address to Congress, promising “historic action” to expand the production of critical minerals and rare earths.
A U.S. House select committee on China had earlier recommended the creation of a critical minerals reserve to shield American producers from price volatility and mitigate Beijing’s influence over supply chains. In addition, Trump announced that the U.S. is set to sign a deal with Ukraine to enhance the production of rare earths.
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