President-elect Donald Trump has announced that his administration will pursue a path toward “US energy dominance”. He emphasized that “America is blessed with vast amounts of ‘Liquid Gold’ and other valuable minerals and resources,” declaring, “We will ‘DRILL BABY DRILL.’”

Achieving energy dominance will necessitate substantial quantities of minerals, ranging from tungsten in exploration drill bits to copper in electrical transmission lines. Crucially, this goal also requires secure mineral supply chains.

Without adequate mineral supplies, the pursuit of energy dominance could face significant delays. For example, constructing a liquefied natural gas terminal may require superalloys with long delivery lead times, potentially postponing project timelines. Additionally, limited mineral availability could drive up prices, making new energy projects less feasible if cost increases are substantial.

Fragile mineral supply chains pose another risk to energy dominance. Global disruptions, such as the covid-19 pandemic, alongside localized issues like labor strikes and regulatory challenges, can impact the supply chains vital for energy projects. Since many minerals are sourced from a limited number of countries, US energy initiatives are particularly vulnerable to disruptions in those regions.

For the United States to achieve energy dominance—across infrastructure, equipment, and operations— it must ensure both sufficient and secure mineral supplies. Currently, the country does not produce enough minerals to meet domestic demand and relies heavily on imports.

Artificial intelligence (AI) is a case in point. Data centres demand significant electricity and, consequently, extensive copper-intensive transmission infrastructure. With the US nearly 50% reliant on imports to satisfy its copper needs, expanding AI data centres could further increase dependence on foreign copper unless domestic production rises.

Moreover, mineral imports are susceptible to supply chain disruptions, including export controls. The US heavily relies on minerals from China, which has imposed export restrictions on at least sixteen minerals. While China continues to permit exports of some of these minerals, it retains the ability to restrict or ban exports to the US at any time, jeopardizing the supply chains for American energy projects.

The most secure source of minerals is domestic production. Domestic supply chains do not face international shipping risks, such as attacks on vessels in the Red Sea or country-specific risks like export bans from foreign governments. The US government has more capacity to address issues within US-based supply chains compared to those connected overseas. For example, the government can control the allocation of domestic materials under Title I of the Defense Production Act.

To boost America’s mineral supply and security for its energy sector, the US government could enhance domestic mineral production. This could involve reforming the mine permitting process, increasing financial incentives for mineral projects, and imposing tariffs on mineral imports.

Reforming the permitting process

Reforming the mine permitting process could entail not only expediting approvals but also opening more federal lands to mining. For instance, the Resolution Copper project in Arizona, if approved, would become North America’s largest copper mine, meeting nearly 25% of US copper demand. However, the project has faced over a decade of federal permitting delays due to restrictions on mining in certain federal lands. Resolution Copper has pursued a land exchange with the US government to facilitate the project.

The government could support land exchanges that enable mining projects to advance. During the Trump Administration, a final environmental impact statement and draft record of decision were published for the Resolution Copper land exchange, marking significant progress. However, the Biden Administration subsequently rescinded these documents, halting the exchange.

Additionally, the US government could consider revoking public land orders that obstruct mining initiatives. The Trump Administration repealed several such orders, opening more federal lands to mineral development, but the Biden Administration reversed those actions, restricting access to mineral-rich areas. Furthermore, the Biden Administration effectively banned mining in the Boundary Waters Canoe Area Wilderness for twenty years. In July 2024, then-candidate Trump stated he would “end that ban in about…ten to fifteen minutes” if elected.

Financial incentives 

Financial incentives could sustain and increase US mineral production essential for the energy sector. For example, aluminum is critical for transmission cables and components for offshore oil platforms. The US imports over 40% of its aluminum needs, and the closure of the Magnitude 7 Metals smelter in Missouri in January 2024 —due to high energy costs— eliminated nearly 30%  of US aluminum smelting capacity.

To encourage capital improvements and new mineral projects, the US government could expand direct loan offerings from the Advanced Technology Vehicle Manufacturing (ATVM) program to include mining projects, as current guidance only covers processing initiatives. The government could also revise rules to extend the 10% Section 45X Advanced Manufacturing Production Credit to non-vertically integrated mining operations.

Tariffs on imports

Imposing tariffs could protect existing mineral production and incentivize new projects. For example, the US depends on imports for 37% of its palladium consumption, a key component in petroleum refining. Sibanye-Stillwater, the only major US palladium miner, has reduced production due to low prices linked to rising imports.

A historical parallel occurred in the 1920s when tungsten prices plummeted due to significant imports from China, halting US tungsten mining. In response, Congress imposed tariffs on tungsten imports in 1922, leading to a revival of US tungsten mining in 1923.

To raise the cost of mineral imports and enhance the competitiveness of domestic production, the US government could impose tariffs on mineral imports. The first Trump Administration’s tariffs on aluminum and steel bolstered those domestic industries, and Trump has pledged to impose a 10–20% tariff on all imports, which would likely include minerals.

Minerals are, in short, vital to Trump’s energy dominance agenda, playing a crucial role in energy infrastructure, equipment, and operations. However, the US currently lacks sufficient production to meet domestic demand and must rely on imports, which introduces supply chain risks.

To enhance mineral supply and security for the US energy sector, the government could reform the mine permitting process, increase financial incentives for mineral projects, and impose tariffs on mineral imports. Ultimately, the pursuit of US energy dominance could coincide with a push for US mineral independence.

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Gregory Wischer is the founder of Dei Gratia Minerals, a critical minerals consulting firm. 

Dr. Shubham Dwivedi is an affiliate researcher at Georgetown University’s Science, Technology, and International Affairs program.

Source: MINING.COM – Read More