America is running on a ticking time bomb hiding in plain sight.
Behind the hardware of the U.S. military, the foundation of the modern economy lies in supply chains controlled by its major geopolitical rival. From refined cobalt in missile guidance systems, specialized gallium for naval radar arrays, and heavy rare earths inside power grids, critical minerals are the bedrock of 21st-century military power.
However, over three decades, every single major section of processing has been handed over to Beijing. China controls roughly 60% of global mineral extraction, 90% of global refining capability, and near-total monopolies on heavy rare earths and magnet manufacturing.
Meanwhile, when it comes to military might, 78% of all U.S. military weapons systems depend on Chinese-linked critical mineral lines. A single administrative policy from Beijing carries the potential to freeze assembly lines, halt naval shipbuilding, and also stall commercial tech sectors without firing a single shot.
To create an opportunity for domestic producers and also create a shield for America’s supply chain, lawmakers introduced H.R. 7126, a bill to “Secure Essential and Critical U.S. Resources and Elements.”
This article will examine 3 main provisions of H.R. 7126.
- Strategic Resilience Reserve Corporation
- Advanced Market Commitments and Financial Instruments
- Supply Thresholds and Sourcing Limits
Most of the minerals the U.S. needs are refined in China, and prices swing too much for other countries to build around that. The three provisions try to address both problems, starting with the money.
A $2.5 Billion Safety Net
The center of H.R. 7126 is the creation of a government-owned corporation that would receive $2.5 billion to strengthen American supply chains. The corporation seeks to support domestic and allied mineral production and processing, assisting in the development of alternative mineral sources. Considering China’s stronghold over critical minerals, such as the global “90% supply growth…for cobalt, graphite, and rare earths” from China, the 2.5 billion dollars seems imperative in combating the lack of domestic production of such minerals.
However, expanding domestic production requires rather large financial incentives to investors for new mines and processing facilities. Volatile mineral prices undermine that confidence. According to the IEA report on critical minerals from 2025, the concentration of critical minerals in a relatively small number of industries (known as high market concentration) augments vulnerability to supply shocks, especially under the circumstance that the exports of the largest supplier are hindered.
In fact, the dangers became increasingly apparent in December 2024, when China restricted exports of gallium, germanium, and antimony to the United States, as well as other critical minerals in the following year.
Three-fourths of the 20 minerals, 19 of which are dominated by China’s refining industry, examined by the IEA were more volatile than oil, and half were more volatile than natural gas.
The struggles of finding profitability in these minerals from domestic or allied industries make the bind with China increasingly strong. However, the H.R. 7126 bill seeks to address this problem by authorizing $2.5 billion for a Strategic Resilience Reserve Corporation. The corporation could help alternative producers secure funding and more predictable demand, encouraging investment in facilities outside China. Proposed tools for providing that stability are floor prices and forward contracts.
Low mineral prices and financial instability make new mineral output hard to finance. Price volatility and concentrated supplies leave the U.S. struggling to diversify from China.
Guaranteeing a Price
Every major proposed change carries substantial economic risk—and H.R. 7126 is no different. With the enormous upfront investments required to begin mining and processing minerals, production often falls at the mercy of investors. This leaves the lingering question of whether this bill will be able to sufficiently account for these risks or end up as yet another failed attempt to pry away China’s mineral dominance.
While critical minerals are key for almost every US industry, their prices tend to fluctuate significantly. In 2023, for instance, lithium spot prices fell approximately 75%, while cobalt, nickel, and graphite also declined by 30-45%.
These sharp price swings could make it difficult for investors to predict future returns, discouraging them from financing the initial capital required to establish the mines and processing facilities required to make H.R. 7126 successful. Indeed, this price volatility has already caused several US and non-Chinese projects to be canceled or delayed when investors demanded higher returns and shorter payback periods, making it difficult to attract initial capital.
Fortunately, the SECURE Minerals Act’s authorization of $2.5 billion for the Strategic Resilience Reserve Corporation could work to provide initial capital for projects to begin. Section 206 of H.R. 7126 also enables the SRRC to use loans and other financing mechanisms to support eligible producers and acquire critical minerals, helping overcome difficulties in obtaining private investment.
Furthermore, Section 101 explicitly establishes support for stable and sustainable mineral prices as a goal, while Section 207 allows the Reserve to sell stored minerals under specific conditions, such as when storage threatens economic security or price stability. Together, these mechanisms can work to solve the price volatility problem once and for all by supporting producers through difficult market conditions while mitigating the effects of disruptions.
H.R. 7126 also authorizes the Strategic Resilience Reserve Corporation to use several financial tools, including “contracts for differences, advance or milestone payments, advanced market commitments, and minority, non-controlling equity investment.”
Perhaps the most important tool is the contract for differences. Essentially, it is an agreement that helps protect a company against falling mineral prices—if the market price drops below a certain predetermined price, the government pays the producer the difference.
For example, if a contract sets a reference price of $100 per unit and the market price falls to $70, the government would pay the producer $30 per unit, helping the producer maintain more predictable revenue.
However, it is important to note that these tools are not perfect, nor are they guaranteed to succeed. If the government promises prices that are too high, the SRRC may incur overwhelming costs and go bankrupt. Conversely, if the prices are too low, companies may still find investment profitable. Therefore, these mechanisms must be careful in balancing these risks and finding an effective middle ground.
Critical Minerals Beyond the Mine
Alongside expanding domestic mineral production, H.R. 7126 also prioritizes recycling and the recovery of critical minerals from mining waste and other discarded materials. This would allow the US to obtain more minerals without relying entirely on new production—while developing new mining projects can take years, existing waste streams could immediately be recycled for valuable materials.
Indeed, the US Geological Survey explains that waste from older mines can contain critical minerals that were previously considered too expensive to recover. Extracting these minerals now could increase domestic supplies while simultaneously addressing environmental issues associated with abandoned mining sites. However, to make recovery profitable enough to incentivize companies, technological improvements and financial support are necessary to make this recycling viable.
Battery recycling offers another opportunity. Used batteries contain critical minerals like lithium, cobalt, and nickel. These minerals can be recovered and reused using newly developing technologies aimed at improving battery recycling.
However, even if critical mineral mining, processing, and recycling would increase through the bill, it is unrealistic that the US would be able to produce every critical mineral it needs on its own. That’s why Section 101 establishes benchmarks for domestic and partner-country production while limiting dependence on foreign countries. This can work to diversify supply so that a disruption in a single country would not threaten the entire US economy.
This uniquely solves a major problem in the global mineral market: critical mineral production and processing are concentrated in a relatively small number of countries. This increases market volatility and makes it harder for alternative producers to compete. By emphasizing domestic production while sourcing from partner countries, the US can reduce its vulnerability to supply chain disruptions.
International cooperation can also play an undeniable role in sharing the costs and risks of developing new sources of critical mineral supply. The Minerals Security Partnership, for example, is an initiative involving the US and other partner-countries that seeks to mobilize investment in diversified critical mineral supply chains. The bill’s emphasis on allied sourcing can contribute to this broader effort by reframing mineral security as a shared economic challenge between America and its allies.
Where the Bill Stands
H.R. 7126 would put $2.5 billion behind an effort to undo a position China built over about three decades. The reserve corporation could guarantee prices through contracts for differences and lend to producers that struggle to attract investors. Section 101 adds benchmarks for sourcing from the U.S. and its partners, and the recycling provisions look for supply in mine waste and old batteries.
How well it works depends on how the corporation sets prices. Contracts priced too high could bankrupt it, and contracts priced too low give investors little reason to join. The SECURE Minerals Act has only been introduced so far, so none of this has been tested, and Congress would have to take it up before any of it could start.
China refines roughly 90% of the world’s critical minerals, and 78% of U.S. weapons systems rely on minerals tied to Chinese supply chains. A reserve fund and a set of price contracts won’t change that quickly, since new mines and refineries take years to permit and build. If the bill passes, the first real test will be whether the corporation can get a few projects outside China financed and running before Beijing restricts exports again.
