Critical minerals

China's export controls on rare earths, announced in October 2025 and suspended under the trade truce, exposed US dependence on Chinese processing, and the suspension now expires with the truce on 10 January 2027. The administration responded with industrial policy instead of legislation, using government equity stakes and price floors for producers such as MP Materials, Defense and Energy Department financing, minerals deals with Ukraine, Congo, Australia, Japan, Saudi Arabia and others, and a Section 232 action on processed critical minerals that directed negotiations and price-floor arrangements instead of immediate tariffs. The administration is putting hundreds of millions of dollars into mining and processing projects (The Guardian).

Critical minerals are one of the few areas where a Democratic Congress and the administration share goals. Permitting legislation with sponsors in both parties would speed mines and processing plants; stockpile funding and Defense Production Act authorities need appropriations; and the NDAA routinely carries sourcing rules. Democrats will scrutinize the terms of government equity stakes and whether price floors favor politically connected firms, but they are unlikely to unwind them.

The executive and Beijing control the near-term risk. If the truce is not extended, China's licensing regime returns and magnet supply to US automakers and defense firms tightens within weeks. The administration's minerals diplomacy, from Congo, where Rwanda's violations have stalled the peace deal, to Greenland and Ukraine, depends on executive agreements that Congress can examine but not direct.

For investors, the midterms marginally improve the odds of durable federal support through permitting and appropriations, while adding oversight risk for firms whose deals depend on direct presidential favor. Saudi Arabian Mining Company rose 6.7% on 4 November as Gulf markets advanced (Reuters).