US Critical Minerals Strategy

by | Jan 10, 2026 | Uncategorized | 0 comments

Executive Summary

The United States is pursuing an aggressive strategy to secure critical mineral supply chains essential for semiconductors, AI infrastructure, and clean energy technologies. This analysis examines the policy framework, implementation challenges, and specific implications for Singapore as a key strategic partner in the Asia-Pacific semiconductor ecosystem.

Case Study: The US Critical Minerals Initiative

Strategic Context

The Trump administration has prioritized building a secure critical minerals supply chain to create economic prosperity and geopolitical leverage, centered on streamlined permitting, legislative support via the One Big Beautiful Bill Act, and protective tariffs, including a planned 50 percent tariff on copper announced for summer 2025.

The 2025 Critical Minerals List

The USGS 2025 draft List of Critical Minerals includes 54 minerals using an updated methodology that quantifies risks associated with potential supply chain disruptions on the U.S. economy. For the 2025 List, USGS recommends adding six mineral commodities (potash, silicon, copper, silver, rhenium, and lead) and removing two (arsenic and tellurium).

Key Vulnerabilities

China’s Dominance: China is home to more than 90% of global rare earths and permanent magnets refining capacity, compared with just 4% for second-place Malaysia. China announced tighter rare earths export controls in early October, only to agree to a one-year suspension after a meeting between Trump and President Xi Jinping.

Semiconductor-Specific Dependencies: The U.S. has been 100% import-dependent for arsenic since 1985, with China supplying 97% of global arsenic. Taiwan, China, and South Korea control over 80% of global semiconductor manufacturing, with Taiwan’s TSMC alone producing over 50% of the world’s chips.

The Pax Silica Initiative

The US announced agreements with eight allied nations including Japan, South Korea, Singapore, the Netherlands, the UK, Israel, the United Arab Emirates and Australia. The summit on December 12 focused on reaching agreements across energy, critical minerals, and advanced manufacturing to build a secure, prosperous, and innovation-driven silicon supply chain.

Strategic Framework: Pax Silica aims to reduce coercive dependencies, protect materials and capabilities foundational to artificial intelligence, and ensure aligned nations can develop and deploy transformative technologies at scale. Unlike the Biden-era initiative which had more than a dozen core countries, this focuses on producer countries.

Legislative and Financial Tools

The CHIPS Act: The CHIPS and Science Act represents the most significant U.S. investment in semiconductor manufacturing, with $280 billion allocated over ten years, including $52.7 billion for semiconductor manufacturing and workforce development, $24 billion in tax credits for microchip production, and $500 million specifically for strengthening global supply chains.

Allied Partnerships: The United States announced memoranda of understanding with Malaysia and Thailand on October 26, 2025, providing for cooperation in diversifying critical minerals supply chains and promoting investments. On October 27, 2025, President Trump and Prime Minister Takaichi of Japan signed the United States-Japan Framework For Securing the Supply of Critical Minerals.

Outlook: Strategic Trajectory and Challenges

Short-Term (2025-2026)

Policy Implementation:

  • Regulatory streamlining for domestic mining permits
  • Activation of bilateral mineral agreements with allies
  • Initial deployment of CHIPS Act funding to semiconductor fabs
  • Establishment of Pax Silica working groups and pilot projects

Trade Dynamics: There is tension between domestic mining goals and broader manufacturing competitiveness. A purely domestic approach will face severe constraints because the United States does not have the necessary critical minerals reserves in all cases, creating fundamental limits that cannot be resolved through domestic policy measures alone.

Medium-Term (2027-2030)

Supply Chain Restructuring: The market value of lithium, nickel, cobalt, and graphite is projected to nearly double from current levels to $186 billion by 2030. As the transition to a modern, electrified economy accelerates, their strategic importance will only continue to grow.

Processing Capabilities: The United States must focus on building and securing access to adequate refining capacity. A strong example of cooperation is the recent US-Saudi agreement to establish a critical minerals processing facility in the Gulf, focusing on rare-earth processing through a joint venture bringing together MP Materials, the US Department of Defense, and Saudi Arabia’s Ma’aden.

Long-Term Challenges

Infrastructure Development: Bipartisan goals of mineral autonomy and technological superiority can only be realized through collaboration with allies and partners given a lack of unilateral resources, know-how, and intellectual property.

Workforce and Capacity:

  • Shortage of materials engineers and semiconductor technicians
  • 10-20 year timelines for developing new mines
  • Need for specialized processing infrastructure

Geopolitical Tensions: Balancing competition with China while maintaining functional trade relationships, particularly given China’s dominant position in processing and refining.

Singapore Impact Analysis

Singapore’s Strategic Position

Semiconductor Hub Status: Singapore is a global hub for semiconductor fabrication, home to leading players in front-end and back-end processes. The city-state processes approximately 11% of global semiconductor testing and serves as a critical transportation node for Asia-Pacific supply chains.

Pax Silica Inclusion: Singapore was among eight countries invited to the inaugural Pax Silica Summit, reflecting its strategic importance as Southeast Asia’s primary semiconductor assembly and testing hub.

Direct Impact Areas

1. Enhanced Strategic Partnership

Singapore gains elevated status in US regional strategy:

  • Access to preferential terms for semiconductor equipment exports
  • Integration into secure supply chain networks
  • Participation in joint R&D initiatives
  • Potential access to CHIPS Act-related investment flows

2. Critical Minerals Processing Opportunities

While Singapore does not extract raw minerals, the country plays a strategic role in processing high-tech materials for batteries and electronics. This opens export opportunities for equipment used in rare earth separation, lithium refining, and materials purification.

Specific Opportunities:

  • Rare earth element separation facilities
  • Battery material refinement
  • Advanced metallurgy for semiconductor inputs
  • Recycling infrastructure for critical minerals

3. Advanced Manufacturing Expansion

Singapore creates strong demand for advanced U.S. equipment, such as photolithography systems, wafer fabrication tools, and testing machinery. Expanding exports in this space can help Singapore enhance regional chip production and mitigate global supply disruptions.

Growth Sectors:

  • Advanced packaging technologies
  • Compound semiconductors (GaN, SiC)
  • AI chip testing and validation
  • Quality assurance systems

4. Supply Chain Resilience Role

The Pax Silica framework operates on interconnected principles integrating critical minerals sourcing, semiconductor fabrication security, AI infrastructure protection, and energy system resilience into a unified approach.

Singapore’s position as a trusted logistics hub becomes more valuable:

  • Secure transportation corridors for sensitive materials
  • Redundant supply pathways
  • Emergency stockpiling capabilities
  • Trade facilitation for allied nations

Challenges and Risks for Singapore

1. Limited Fiscal Capacity

Smaller alliance partners like Singapore and Israel have limited fiscal capacity relative to the United States and Japan, potentially creating imbalanced contribution requirements that could strain alliance cohesion.

2. China Trade Exposure

Singapore must balance deepening ties with the US-led coalition while maintaining economic relationships with China:

  • China remains a major trading partner
  • ASEAN centrality requires diplomatic neutrality
  • Risk of being caught in technology export restrictions
  • Potential for Chinese countermeasures

3. Talent and Workforce Constraints

The alliance collectively faces shortages of materials engineers, semiconductor technicians, and cybersecurity specialists needed to operate secure supply chains. Training programs and immigration coordination will be essential.

4. Infrastructure Investment Requirements

Major capital expenditures needed for:

  • Advanced processing facilities
  • R&D laboratories
  • Testing and certification centers
  • Energy infrastructure for manufacturing expansion

Economic Opportunities

Market Access: Recycling solutions for critical minerals present significant export opportunities to Singapore. As a major global trading hub and key consumer of critical minerals such as lithium, rare earth elements, and cobalt, Singapore is actively seeking innovative ways to secure and diversify its supply.

Value-Added Services:

  • Materials testing and certification
  • Supply chain management platforms
  • Technology transfer and training
  • Financial services for minerals trading

Regional Leadership: ASEAN countries’ ability to develop their own critical mineral value chains presents opportunities. Various countries, such as Thailand and Indonesia, aspire to become major automotive producers, while Singapore is at the forefront of research and development.

Policy Recommendations for Singapore

Immediate Actions (2025-2026)

  1. Establish Critical Minerals Processing Hub: Leverage existing chemical and materials expertise to build specialized processing capabilities for select minerals
  2. Expand R&D Collaboration: Partner with US institutions on advanced materials research, particularly in recycling and alternative materials
  3. Develop Workforce Pipeline: Create targeted training programs for materials engineers and semiconductor technicians through partnerships with polytechnics and universities
  4. Build Strategic Stockpiles: Work with Pax Silica partners to establish emergency reserves of critical materials

Medium-Term Strategy (2027-2030)

  1. Regional Integration: Position as ASEAN’s critical minerals hub, connecting Southeast Asian resources with allied processing and manufacturing networks
  2. Technology Standards Leadership: Help develop international standards for critical minerals processing and certification
  3. Financial Infrastructure: Create specialized financing mechanisms for critical minerals projects in Southeast Asia
  4. Circular Economy Pioneer: Establish world-class recycling facilities for semiconductor materials and electronic waste

Long-Term Vision (Beyond 2030)

  1. Innovation Center: Become global leader in sustainable and efficient critical minerals processing technologies
  2. Supply Chain Orchestrator: Serve as trusted intermediary connecting resource producers, processors, and manufacturers across allied networks
  3. Resilience Coordinator: Develop sophisticated risk management and alternative sourcing capabilities for the Indo-Pacific region

Conclusion

The US critical minerals strategy represents a fundamental restructuring of global supply chains with far-reaching implications. For Singapore, inclusion in the Pax Silica initiative offers significant opportunities to deepen strategic partnerships, expand high-value manufacturing capabilities, and enhance its role as a critical node in secure technology supply chains.

Success will require Singapore to:

  • Navigate complex geopolitical tensions between the US and China
  • Make substantial investments in processing infrastructure and workforce development
  • Leverage its strengths in logistics, finance, and advanced manufacturing
  • Position itself as an indispensable partner in the resilient supply chain ecosystem

The strategic trajectory favors countries that can demonstrate technological capability, political reliability, and geographic advantage. Singapore possesses all three, positioning it to capture substantial economic value from the critical minerals transition while strengthening its long-term security and prosperity.

Key Takeaway: The US-led critical minerals strategy is not merely about resource access—it represents a comprehensive realignment of technology supply chains that will define economic and security relationships for decades. Singapore’s early integration into this framework through Pax Silica provides a strategic foundation to capitalize on this transformation, but success will require sustained investment, diplomatic agility, and strategic execution.