Trump’s Second Term: Critical Minerals Strategy Likely to Persist
Donald Trump has labeled the Inflation Reduction Act (IRA) a “green scam” and vowed to repeal it upon reclaiming the presidency. This stance raises concerns for sectors like electric vehicles (EVs) and wind energy, key beneficiaries of the Biden administration’s $369 billion investment in energy transition initiatives.
However, the IRA’s reach extends beyond renewable energy. A portion of its funding, such as the $75 million allocated for upgrading Constellium’s aluminum rolling mill in West Virginia, has bolstered the U.S. industrial base. While Trump’s criticisms might suggest a broad rollback, his track record and bipartisan support for reducing reliance on foreign critical minerals suggest otherwise.
Bipartisan Focus on Industrial Revitalization
The push for rebuilding U.S. industrial capacity and reducing dependency on China for critical minerals began under Trump’s leadership. In 2020, his administration declared the nation’s overreliance on foreign adversaries for essential minerals a national emergency. A second Trump presidency would likely maintain, if not amplify, this momentum toward self-sufficiency in key resources.
Federal agencies like the Department of Energy (DOE) and the Department of Defense (DOD) have collectively funneled billions into enhancing U.S. metals production. The DOE has focused on inputs for EV batteries, such as lithium and graphite, while the DOD has supported projects for a range of critical materials, from antimony to zirconium.
Challenges in Metals Production
Despite the influx of government funding, investment has largely targeted downstream industries, such as battery manufacturing. Since the IRA’s enactment in July 2022, 17 new U.S. battery plants have been announced, boosting capacity projections by 68% through 2030, according to Benchmark Mineral Intelligence.
In contrast, new primary smelting facilities remain rare. For example, Century Aluminum announced plans for a $500 million smelter but has not provided updates since March. Meanwhile, rare earth processing projects like the Lynas Rare Earths venture in Texas face permitting delays, highlighting the ongoing challenges in scaling domestic metals production.
Mining Bottlenecks
New smelters need raw materials, yet the U.S. mining sector remains hampered by permitting hurdles. While funds have been allocated for lithium projects, such as Lithium Americas’ Thacker Pass, non-lithium projects like South32’s Hermosa zinc-manganese site in Arizona are exceptions. Most others are stuck navigating lengthy regulatory processes.
Environmental considerations have further complicated mining development. High-profile copper projects like the Pebble Mine in Alaska and Twin Metals in Minnesota have been blocked under the Biden administration. Trump has promised to reverse such restrictions, though projects would still face state-level approvals.
Tougher Stance on China
A second Trump administration would likely intensify scrutiny of critical metal imports tied to China. For instance, while Talon Metals has received funding for its Tamarack nickel project in Minnesota, the global nickel market remains dominated by Chinese-linked operations in Indonesia. U.S. automakers like Ford have partnered with Indonesian producers despite these ties, highlighting a tension between cost and geopolitical concerns.
Trump’s “America First” approach could lead to stricter oversight of such partnerships, potentially redefining what qualifies as IRA-compliant under federal subsidy rules.
Conclusion
Although Trump’s rhetoric targets the IRA as a “green scam,” his administration would likely continue the bipartisan push for critical mineral self-sufficiency. Far from dismantling the industrial and resource initiatives launched under Biden, Trump 2.0 might accelerate efforts to reduce foreign dependency, even if it means selectively embracing elements of the IRA.
