The United States’ Strategy for Securing Critical Minerals Supplies: Can It Meet the Needs of the IRA?
The United States (US) reliance on foreign supplies of raw and processed critical minerals is pressing Washington to devise a strategy to secure short-, medium- and long-term solutions. Pressure only increased with the booming demand spurred partly by the Inflation Reduction Act’s (IRA) policies.
The US goal to become carbon pollution-free electricity by 2035 and reach net-zero greenhouse gas emissions by 2050 requires a complete overhaul of the structure of critical minerals production and supplies within the country as well as abroad to meet future demand and build resilience from China. This Memo assesses recent progress and whether it can help deliver on the IRA provisions.
To secure its critical mineral supplies, the US remains dependent from foreign countries. Graphite, manganese and many rare earth elements (REEs) are, indeed, rare occurrences in the country while deposits of nickel or cobalt are dwarfed by the giants in the Democratic Republic of Congo, Indonesia, or the Philippines.
With the aim of reducing these dependencies, the IRA, established in 2022, adopts a nationalistic approach to mineral sourcing by requiring a market-value based target for critical mineral content to benefit from its tax credits.
Thus, by 2027, to benefit from these tax credits, an electric vehicle should be built at 80% of the market value of critical minerals in its battery sourced domestically or from US free-trade partners (FTA). With a dependency on imports from non-FTA countries of 77% for cobalt and 46% for lithium and nickel, the IRA goals appear less than likely to be achieved.
This requirement of having 80% of the market value coming from an FTA-country or from the US, coupled with the “foreign entities of concern” provision in US legislation could significantly disrupt critical minerals supplies for US battery and car manufacturers.
On the domestic field, the US is trying to develop its own mining production, with three possible options:
- The opening of new mines, supported by the White House and the Department of Energy.
- The reprocessing of mine wastes, with around 100 000 abandoned mines in the US, whose exploitation often focused on a single ore.
- The recovery of byproducts from operating mines, whose potential strongly depends on economic considerations and on technical feasibility.
Each of these three options presents potential benefits and risks. Added to this are the difficulties of quickly obtaining operating permits, for which a waiting period of 7 to 10 years is often necessary. Moreover, social opposition to these new openings is generally strong.
Finally, US recycling capacity is still limited, and is not a significant enough source of metals to enable a real overhaul of US consumption systems.
Therefore, these domestic and external mining and refining efforts, even coupled with a push for recycling industries, face significant hurdles and are unlikely to reorganize critical minerals supply chains in the short term, thus jeopardizing the goals set out in the IRA. Under its current material requirements, the law is unlikely to be fulfilled, and only a softening of its sourcing rules could align with the geological and geopolitical realities of critical minerals production.
Download the full analysis
This page contains only a summary of our work. If you would like to have access to all the information from our research on the subject, you can download the full version in PDF format.
The United States’ Strategy for Securing Critical Minerals Supplies: Can It Meet the Needs of the IRA?
Author(s)
Related centers and programs
Discover our other research centers and programs
Center for Energy & Climate
Ifri's Energy and Climate Center carries out activities and research on the geopolitical and geoeconomic issues of energy transitions such as energy security, competitiveness, control of value chains, and acceptability. Specialized in the study of European energy/climate policies as well as energy markets in Europe and around the world, its work also focuses on the energy and climate strategies of major powers such as the United States, China or India. It offers recognized expertise, enriched by international collaborations and events, particularly in Paris and Brussels.
Find out more
Discover all our analyses
Can carbon markets make a breakthrough at COP29?
Voluntary carbon markets (VCMs) have a strong potential, notably to help bridge the climate finance gap, especially for Africa.
Taiwan's Energy Supply: The Achilles Heel of National Security
Making Taiwan a “dead island” through “a blockade” and “disruption of energy supplies” leading to an “economic collapse.” This is how Colonel Zhang Chi of the People’s Liberation Army and professor at the National Defense University in Beijing described the objective of the Chinese military exercises in May 2024, following the inauguration of Taiwan’s new president, Lai Ching-te. Similar to the exercises that took place after Nancy Pelosi’s visit to Taipei in August 2022, China designated exercise zones facing Taiwan’s main ports, effectively simulating a military embargo on Taiwan. These maneuvers illustrate Beijing’s growing pressure on the island, which it aims to conquer, and push Taiwan to question its resilience capacity.
India’s Broken Power Economics : Addressing DISCOM Challenges
India’s electricity demand is rising at an impressive annual rate of 9%. From 2014 to 2023, the country’s gross domestic product (GDP) surged from 1.95 trillion dollars ($) to $3.2 trillion (constant 2015 US$), and the nation is poised to maintain this upward trajectory, with projected growth rates exceeding 7% in 2024 and 2025. Correspondingly, peak power demand has soared from 136 gigawatts (GW) in 2014 to 243 GW in 2024, positioning India as the world’s third-largest energy consumer. In the past decade, the country has increased its power generation capacity by a remarkable 190 GW, pushing its total installed capacity beyond 400 GW.
The Troubled Reorganization of Critical Raw Materials Value Chains: An Assessment of European De-risking Policies
With the demand for critical raw materials set to, at a minimum, double by 2030 in the context of the current energy transition policies, the concentration of critical raw materials (CRM) supplies and, even more, of refining capacities in a handful of countries has become one of the paramount issues in international, bilateral and national discussions. China’s dominant position and successive export controls on critical raw materials (lately, germanium, gallium, rare earths processing technology, graphite, antimony) point to a trend of weaponizing critical dependencies.