Trump seeks minerals refining on Pentagon bases to boost US output: sources

Summary:

• Plan aims to counter China's control over critical minerals
• Fighter jets, submarines, bullets built with minerals processed by China
• Trump doesn't plan to establish critical minerals stockpile, sources say

US President Donald Trump aims to build metals refining facilities on Pentagon military bases as part of his plan to boost domestic production of critical minerals and offset China's control of the sector, two senior administration officials told Reuters.

The move is one of several planned for an executive order Trump could sign as soon as Wednesday after he told the US Congress last week he would "take historic action to dramatically expand production of critical minerals and rare earths here in the USA."

As part of the order, the Pentagon would work with other federal agencies to install processing facilities on its bases, according to the sources, who were not authorized to publicly discuss the administration's deliberations.

Using military bases for processing would underscore the importance Trump is placing on critical minerals for national security. Fighter jets, submarines, bullets and other weaponry used by the US military are built with minerals processed by Beijing.

Trump also plans to name a critical minerals czar, similar to steps previous presidents have taken to coordinate Washington's focus on other areas, according to one of the sources. The plans are under discussion and could change before Trump signs the order, the sources added.

Some Trump administration officials were spooked by initial signs that China might restrict critical minerals exports as part of its retaliation for Trump's tariffs or for other reasons, according to a person familiar with their thinking.

The US National Security Council did not respond to requests for comment.

With the Pentagon controlling about 30 million acres of land, the plan would ensure there is available land for the refining facilities, avoiding the controversy that sometimes occurs in host local communities. It would also avoid the need to buy land and avoid using land controlled by other federal departments.

A plan that prioritizes metals processing - rather than an overhaul of US mine permitting - could irk US miners but address a longstanding concern from manufacturers that China controls too much of the global metals processing sector.

China is a top global producer of 30 of the 50 minerals considered critical by the US Geological Survey, for example.

It's not clear how Trump's plan for processing facilities on Pentagon bases could work from a regulatory perspective, as the US Clean Air Act and Clean Water Act would still apply to Pentagon bases and those regulations have hindered private development of processing projects in the past.

Trump previously signaled a willingness for alternative uses of lands controlled by Washington. As a presidential candidate, he pledged to open up portions of federal land for large-scale housing construction, with zones that would be "ultra-low tax and ultra-low regulation."

Trump does not plan in the order to establish a US critical minerals stockpile that would mimic the Strategic Petroleum Reserve, the sources said, a step that some in the administration and mining industry had sought. China stockpiles some critical minerals, including cobalt, and the US government last year considered stockpiling the metal, which is used in missiles, aerospace parts, magnets for communication, and radar and guidance systems.

Trump also does not plan to order the Pentagon or other US agencies to require vendors to use only US minerals, what is known as a "Buy American" mandate, and one that junior miners especially have said is needed to offset China's market manipulations.

Nor would the order try to alter the federal mine permitting process, which was set by the 1970 National Environmental Policy Act, largely because such a move would require an act of Congress.

However, it would aim to expand the FAST-41 permitting process for mines, building on a step Trump took in his first term, according to the sources.

South32's Hermosa zinc-manganese project in Arizona was fast-tracked by former President Joe Biden, the first mine to receive that treatment.

The order would also seek to reclassify mine waste on federal land, mimicking a step that Rio Tinto, Freeport-McMoRan and others have taken to tap piles of old waste rock at US mines previously thought to be worthless.

Such a reclassification could help produce copper and other minerals cheaper and faster than building new mines.

It was not immediately clear if Trump plans to declare copper as a strategic mineral, which would allow US miners of the widely used metal tap into a 10% production tax credit. Phoenix-based Freeport, the largest US copper miner, told Reuters on Monday it hopes Trump takes that step, which would save it $500 million annually.