U.S. accelerates rare-earth production, weighs tariffs

The U.S. government is accelerating domestic rare-earth production. The National Energy Dominance Council has ordered federal agencies to identify projects within 10 days and begin site leasing within 30 days. The Department of Energy has allocated $134 million to strengthen domestic processing and supply chains. A White House initiative from January 2026 makes tariffs on processed critical minerals a possible option if negotiations to secure foreign supplies or processing arrangements do not succeed.

The action follows executive orders signed in 2025 that directed faster rare-earth output and created the NEDC, chaired by Interior Secretary Doug Burgum. Burgum confirmed actions are being taken “across the board” on critical minerals. The council set internal deadlines intended to shorten the usual pace of project selection and leasing on federal lands.

Federal permitting for mining and processing on federal lands is being expedited to move projects through regulatory review faster than typical timelines. The DOE funding is designated for projects that expand domestic processing and midstream capacity, including pilot facilities and research partnerships.

One site receiving particular attention is the Sheep Creek deposit in Montana. Geologists estimate the deposit contains rare-earth concentrations near 90,000 parts per million and includes co-products such as gallium, scandium and strontium. The Montana project is being developed in partnership with Idaho National Laboratory, which will provide technical support and research.

China controls an estimated 95% of global heavy rare-earth output, and the United States imports nearly all of the minerals it needs for many high-tech and defense applications. Officials say the federal actions aim to reduce that import dependence by building U.S. extraction and processing capacity.

Industry participants and investors are monitoring the tariff option. If tariffs on processed materials are imposed, companies that currently buy Chinese-processed rare earths could face higher input costs in the near term. Tariffs would increase the economic case for domestic processing and could encourage private investment in midstream operations over the medium term.

Analysts and officials note that mining, processing and building new industrial capacity involve technical, environmental and permitting challenges that can extend project timelines. The government is pairing accelerated administrative steps with funding and laboratory partnerships to address those technical hurdles.