Seeking to reduce U.S. reliance on imports of critical minerals and elements, particularly from China, the Department of Energy on Tuesday issued new guidance outlining a preference for these materials in federal loan programs the department manages.

The new guidance was directed as part of a presidential executive order in September that tasked federal agencies to work together to reduce dependence on foreign supplies on key critical minerals and find ways to address this threat (Defense Daily, Oct. 1).

“Reliable access to domestically-produced critical minerals is of national importance,” Energy Secretary Dan Brouillette said in a statement. “These critical minerals make up necessary products for our military, energy technologies, national infrastructure, and economy. Our country needs critical minerals to make airplanes, computers, cell phones, electricity generation and transmission systems, and advanced electronics.”

In 2018 the Department of Interior released a list of 35 critical minerals, which included 17 rare earth elements grouped within a single category. The minerals are considered critical to U.S. economic and national security.

Of the 35 critical minerals, DoE says the U.S. imports more than half of what it consumes, with 80 percent coming from China, adding that “China has exploited its position in the rare earth elements market by coercing industries that rely on these elements to locate their facilities, intellectual property, and technology in China.” The department also says that for 14 of the minerals, the U.S. has no domestic production.

“It is imperative we utilize the tools of the federal government to help establish a robust domestic supply chain of these thirty-five critical minerals,” Brouillette said in his statement.

The new loan application guidance is aimed at minerals and elements that have a “nexus” with the energy sector and is structured within existing statutes, senior DoE officials said on a background call with media. There are already loan applicants in the “queue” representing domestic sourcing of these materials although approvals take “multiple years,” the officials said.

The DoE loan projects are administered under Title XVII of the 2005 Energy Policy Act and the Energy Independence and Security Act of 2007. While the projects covered under the statutes are energy focused, some have applications that extend into other sectors such as hydrogen fuel cells, nuclear energy, electric drive vehicles, and electric vehicle battery systems, technologies that the aerospace and defense sector is either currently using or developing for future use.

“It is fitting that the Department of Energy, along with other agencies, take a lead in pursuing a solution to the global critical minerals supply chain crisis, particularly where it involves clean and green applications and renewables,” Pini Althaus, CEO of USA Rare Earth, LLC, told Defense Daily in an email response for comment on the loan guidance. “Nearly every ‘green’ technology is comprised of one or more of these elements and we shouldn’t have to rely on any other country, and certainly not the Chinese Communist Party, for our clean energy applications and electric vehicle manufacturing.”

USA Rare Earth is standing up a domestic mining and manufacturing capability for rare earth and critical minerals.

There are no guarantees that loan applicants representing domestic sources and capabilities related to critical minerals will receive funding but they may have an advantage over other applicants depending on their applications, the DoE officials said. That said, critical minerals will be a factor in decisions on applications, they said.