When Bans Don't Build Markets: Rethinking the DoD’s Critical Mineral Strategy

Abstract

The U.S. government and the Department of Defense (DoD) are increasingly treating critical minerals as a core national security priority. Over the past several years, both entities have invested heavily in supply-side interventions—financing .projects, supporting processing capacity, and expanding mineral stockpiles. Far less attention however has been given to the design and sequencing of demand-side policies intended to create a durable market for U.S. and allied-sourced minerals. One of the DoD’s most consequential demand-side measures is its 2027 ban on procuring certain covered minerals and components sourced from China. The intent of the ban is clear: reduce dependencies on the People’s Republic of China (PRC) and catalyze a secure supply chain. However, as it is currently structured, the ban risks outpacing industrial realities. It imposes a compliance deadline before sufficient alternative mining, refining, and processing capabilities likely exist. It targets minerals that have received comparatively limited DoD investment. It may raise downstream acquisition costs without corresponding budget adjustments. It disproportionately burdens smaller defense firms, potentially narrowing competition within the defense industrial base. The central argument of this essay is not that demand-side intervention is misguided. Demand-side policies are crucial for the success of the DoD’s supply-side investments. Rather, the current approach is poorly synchronized. A ban alone does not create a market; it creates a compliance obligation. Without aligned capital investment, pricing mechanisms, and scale beyond DoD procurement, the ban risks producing bottlenecks, volatility, and consolidation rather than resilience.