Leveraging the Defense Production Act to Stockpile Minerals

On December 3, 2024, China banned the export of antimony, gallium, and germanium, which are crucial for defense applications in the U. S. Antimony is found in munitions, gallium is used in radar systems, and germanium is essential for night vision technology. These minerals are also important for commercial industries, like fiber optic cables. The U. S. largely depends on China for these minerals, and such bans could hinder the manufacture of defense equipment and worsen supply issues.

The U. S. relies on China for 24 minerals where it is over 50% import reliant, including bismuth for defense alloys and tungsten for ammunition. To address these challenges, the U. S. government needs to stockpile these strategic minerals to protect its defense capabilities. However, the current National Defense Stockpile is limited, only to be tapped during national emergencies like war, and requires bureaucratic approval for any changes.

Past administrations have used the Defense Production Act (DPA) to create mineral stockpiles outside of wartime, which could be valuable today. For instance, in the 1960s, a DPA inventory worth $1. 5 billion (over $10 billion today) was used to support domestic mineral production and relieve shortages.

The incoming Trump Administration has the authority to create a new DPA mineral inventory, which could be utilized to acquire and sell minerals to defense firms during supply shortages. This could also encourage domestic production by purchasing minerals from local producers. Past actions during the Korean War set price floors to boost domestic tungsten and aluminum production, showing the government can effectively incentivize local mineral markets.

The Trump Administration could access DPA's available funds, approximately $1 billion unobligated, for stocking minerals. With additional appropriations potentially adding $450 million to $900 million, they can proceed to purchase minerals needed for defense. A waiver already set by President Biden allows for DPA purchases without the usual restrictions.

The new mineral inventory should focus on minerals critical for defense, including those currently listed, but also future needs such as those for quantum computing. A strategic release plan for these minerals would prioritize sales to domestic manufacturers, particularly in defense sectors. It would also ensure that the minerals are in forms that can be directly used in manufacturing.

Storage of these minerals might occur in military depots or leased commercial spaces, similar to how the Eisenhower Administration managed stockpiling during the Cold War. The need for such measures is underscored by ongoing supply chain risks from China. 

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