Editor’s note: Critical minerals and electronics recycling will be featured in sessions at the 2026 E-Scrap: The Longevity Conference in New Orleans October 26-28.
The United States is investing heavily in critical-minerals capacity, driven by concern that batteries, semiconductors and advanced weapons depend on supply chains concentrated abroad. Building plants, however, does not guarantee that those facilities will have enough material to process.
A July 2026 Government Accountability Office assessment examined whether recycling and material substitution could reduce import dependence. Its findings were uneven. Semiconductor recovery remains technically difficult, but established battery-recycling technologies could reduce imports of copper, cobalt, lithium and nickel within two to three years. The limiting factors include inadequate domestic capacity and the continued loss of usable feedstock to landfills and overseas processors.
Federal capacity-building began several years ago. Since 2020, the Department of Defense has awarded approximately $439 million to rebuild domestic rare-earth supply chains. It also manages the National Defense Stockpile, which holds strategic and critical materials for national emergencies.
The effort widened in February 2026 with Project Vault, a proposed reserve serving government and commercial users independently of the Defense Logistics Agency stockpile. The initiative was announced with a planned $10 billion Export-Import Bank loan and $2 billion in private investment. Federal agencies have also been assessing potential purchases of materials such as scandium, tungsten, graphite, samarium, dysprosium and terbium.
The feedstock needed to support these investments can come from two broad sources: newly mined material and products or waste already circulating through the economy. Neither source offers a complete answer.
Domestic mining remains essential, but geology sets hard limits. Gallium illustrates the problem. It is generally recovered as a byproduct of processing bauxite into alumina, yet the United States lacks large bauxite deposits. A domestic gallium plant could therefore reduce dependence on foreign processing while remaining dependent on imported feedstock from countries such as Jamaica or Brazil.
Recycling offers a faster route for some battery minerals.
Manufacturing scrap, end-of-life batteries, obsolete electronics and retired rare-earth magnets already contain materials that domestic processors need. GAO nevertheless found that discarded electronics have low concentrations of certain critical minerals and are difficult to separate. Battery recycling is further advanced, although collection, storage and transportation remain expensive.
The federal government has now moved to keep more of that material onshore. On July 30, 2026, President Donald Trump issued a determination under the Defense Production Act authorizing the commerce secretary to establish export controls covering “recoverable critical minerals and materials.” The definition includes battery black mass, end-of-life rare-earth permanent magnets, swarf and other scrap containing critical materials. Copper scrap was excluded because it was addressed separately.
Commerce has since begun implementing that authority. In August, the Bureau of Industry and Security issued a temporary final rule covering black mass and tungsten waste and scrap. Beginning August 27, U.S. sellers of those materials must allocate 100 percent of their monthly sales to US persons unless they obtain an adjustment or exception from BIS. The rule therefore turns part of the July policy direction into an operating feedstock-retention requirement, although it does not yet apply to every recoverable critical material covered by the presidential determination.
For black mass and tungsten scrap, at least, material that previously could have been sold abroad for processing is now being explicitly directed toward the domestic market.
Keeping feedstock in the country will matter only if American plants can economically refine it. Resources for the Future identifies the midstream as a major weakness in the domestic value chain. The United States has minerals, manufacturing demand and new recycling projects, but still lacks sufficient refining, separation and component-manufacturing capacity.
Closing that gap is expensive. Individual rare-earth processing projects can require hundreds of millions of dollars, while Chinese producers can influence market prices through their scale and output policies. Rare-earth refining also consumes substantial water and can generate waste containing naturally occurring radioactive material. Cost escalation and wastewater problems at the planned Lynas refinery in Texas demonstrate how quickly a strategically attractive project can encounter local, technical and financial resistance.
The sequencing is awkward. Processing investments, defense offtakes and stockpiling programs were advancing years before the July 2026 feedstock-retention authority arrived. Meanwhile, GAO continues to find weak data and analytical tools for deciding which recovery technologies and infrastructure deserve priority.
America is beginning to build the receiving capacity. The open question is whether retained scrap and recovered minerals will arrive quickly enough, consistently enough and in the right volumes to keep those plants operating.
