Trump’s 2027 minerals deadline runs into US supply reality

US industry struggles to meet 2027 deadline: US President Donald Trump may struggle to end US reliance on Chinese critical minerals in just over five months, as domestic mining and processing companies remain far from meeting demand. That leaves his plan to ban federal purchases of rare earths, magnets, tungsten, molybdenum, and tantalum from China, Russia, Iran, and North Korea facing a significant supply shortfall.

REMEMBER- Since returning to the White House, Trump has made critical minerals a priority, channeling tens of bns of USD into roughly 150 mining and processing companies to reduce China’s grip on supply chains for defense and other strategic industries, but he has repeatedly granted waivers because domestic supply has been unable to catch up with demand. Trump criticized those exemptions in a May 10 post on his Truth Social platform, insisting federal agencies should buy American-made products “with no exceptions,” and last week, he signed an executive order making it more difficult for defense contractors to obtain waivers.

A supply gap too large to close: US demand for the most widely used rare earth magnets reached about 48k metric tons in 2025, while domestic production totaled only 300 metric tons, according to Arthur D. Little consultancy. Even with new projects, US capacity is expected to reach just 5k metric tons by the end of this year. But US investment in rare earths has been hampered by persistently low Chinese mineral prices, which Washington says undermines the economic viability of domestic projects. Beijing maintains that it complies with WTO rules and is committed to market stability.

US projects still years away: Building a domestic critical minerals supply chain has proven more difficult than Washington anticipated, with technical hurdles and shifting Pentagon requirements delaying several flagship projects. Reuters reported that Pentagon-backed Ucore Rare Metals pushed back its RapidSX refining project following changes to Defense Department specifications. Some production is now expected no earlier than 2027.

Separately, MP Materials is still calibrating its refining equipment ahead of producing magnets for General Motors, while its Pentagon-dedicated magnet plant is due to open in 2028. MP Materials has spent years calibrating its solvent extraction processing equipment — what CEO Jim Litinsky called a “painstaking process.” Other companies — including ReElement Technologies, USA Rare Earth, and Energy Fuels — are also expanding processing capacity, though most projects are not expected to reach full scale until 2028-2030.

ALSO- The Trump administration launched the USD 12 bn Project Vault in February to build a strategic stockpile of critical minerals for US manufacturers. In April, officials acknowledged they will need to buy minerals from “anywhere in the world, including China”. Experts say partnerships with Japan, South Korea, and other allies could serve as a bridge until the domestic projects ramp up.

China’s dominance: While the US holds reserves of most critical minerals, it lacks sufficient mining and refining capacity — meaning it could take years to get the required infrastructure in the ground to compete, minerals industry analyst Chris Berry noted. Now, China controls more than 80% of the global minerals refining industry, giving Beijing influence over the supply chain. This month, the IEA warned that industries worth USD 6.5 tn could face disruption if China tightens rare earth exports, as it has done several times this year.

MARKETS THIS MORNING-

Asia-Pacific markets opened lower this morning as Wall Street’s selloff in semiconductor and AI-infrastructure stocks spilled into Asian equities. South Korea’s Kospi led losses, dropping 8.0%, while Japan’s Nikkei fell 3.8%. “The latest selloff in chipmakers shows that doubts over spending, returns and valuations are still deepening rather than fading,” Vantage Global Prime’s Hebe Chen said.

THE CLOSING BELL-

The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 11.1 bn (19.2% above the 90-day average). International investors were the sole net buyers. The index is up 28.2% YTD.

In the green: ADIB (+4.8%), Rameda (+3.7%), and Valmore Holding -USD (+1.5%).

In the red: Qalaa Holdings (-2.9%), E-finance (-2.7%), and GB Corp (-1.9%).