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Key takeaways:
In the latest episode of Fast Forward, Fastmarkets’ Andrea Hotter speaks to senior officials from the US Department of Defense; Assistant Secretary, Michael Cadenazzi at the Department of War, and Zach Boykin, the Department’s Technical director for strategic and critical minerals.
Fastmarkets’ own metals expert Will Adams unpacked how minerals have shifted from a niche procurement concern to a defining factor in military readiness.
The conversation makes one point clear: modern warfare is increasingly materials-intensive, and the systems that deliver defense capability, from advanced electronics to hypersonic missiles, depend on highly specialised inputs that are often difficult to source, process and scale.
For decades, defense procurement operated on the assumption that global markets would deliver reliable access to materials. That assumption is now being reassessed.
Growing defense budgets, more complex technologies and higher performance requirements are driving a step-change in materials demand. At the same time, supply chains remain fragmented and exposed, with bottlenecks emerging across mining, processing and manufacturing.
The result is a widening gap between demand growth and supply resilience. Policymakers increasingly recognise that the ability to produce and process materials may prove as critical as the ability to deploy them.
Since the 1990s, Western economies have progressively outsourced much of their mining and processing capacity, driven by cost pressures and environmental considerations. This shift concentrated supply chains, particularly refining, in China.
Today, that concentration represents a strategic vulnerability. Many critical mineral markets remain dominated by a single processing hub, leaving Western supply chains exposed to geopolitical risk and trade disruption.
Rebuilding capacity domestically and across allied nations is now a priority, but doing so means reversing decades of underinvestment, a process that will take time.
Stockpiling has traditionally been used to manage supply risk, but it is no longer sufficient in isolation.
Governments are now adopting broader approaches that combine strategic reserves with active market engagement. This includes maintaining working inventories with industry, securing access to production capacity and supporting investment across supply chains.
Initiatives such as Project Vault in the United States illustrate this shift. By providing capital to support transactions and inventory, governments are effectively stepping into the market to ensure liquidity and continuity of supply.
The approach marks a clear departure from passive risk management toward active market shaping.
Supply-side constraints remain the defining issue.
Expanding capacity, particularly in processing and refining, involves large-scale industrial projects with long development timelines. Permitting, environmental requirements and financing constraints all contribute to delays.
As a result, supply chain transformation is measured in decades rather than years. This creates a structural tension between the urgency of current defense needs and the slow pace of industrial build-out.
Managing that tension will require parallel strategies: mitigating near-term risk while investing for long-term resilience.
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Governments are responding with diversified strategies that span the entire value chain:
This “all-of-the-above” approach reflects the reality that no single intervention can resolve supply risk. Each stage of the value chain must be addressed simultaneously to achieve meaningful resilience.
Rather than relying solely on regulation, policymakers are increasingly using pricing signals, demand commitments and direct investment to influence supply. In some cases, this includes supporting minimum price levels or acting as a buyer of last resort.
The intervention in neodymium markets provides a clear example. By supporting pricing through commercial arrangements, the US helped improve the economics of Western rare earth projects, encouraging investment and capacity growth.
Such actions signal a broader trend: governments are becoming active participants in commodities markets, shaping outcomes to achieve strategic objectives.
Private investment is essential to scaling supply chains, but remains difficult to mobilize.
Critical minerals projects are capital-intensive, slow to develop and exposed to multiple risks, from permitting delays to geopolitical uncertainty. Investment horizons of 15–20 years sit uneasily with many traditional funding models.
To bridge this gap, governments are focusing on de-risking. Financial support, policy alignment and demand guarantees help create the conditions for private capital to enter.
Without this partnership between public and private funding, large-scale supply chain expansion is unlikely to materialise at the speed required.
International coordination has become a defining feature of critical minerals strategy.
The US, EU, UK, Canada and Australia are increasingly working together on co-investment, shared processing capacity and supply chain integration. These collaborations resemble emerging “mineral alliances”, designed to reduce reliance on adversarial suppliers.
However, competition remains inherent. Countries continue to compete for resources, investment and industrial capacity, creating a hybrid dynamic of cooperation and rivalry.
Over time, this will reshape trade flows, with supply chains increasingly concentrated within networks of trusted partners.
Western production is unlikely to match the cost structures of established suppliers, particularly where environmental standards and labour costs differ. As a result, greater resilience may translate into structurally higher prices for key materials.
For downstream industries, this represents a shift away from the low-cost paradigm that has defined global supply chains for decades.
Resilience, in this context, becomes an economic as well as a strategic choice.
The shift in critical minerals reflects a broader transformation in how governments engage with markets.
The world is moving from an era of assumed access to one of managed resilience. Supply chains are being reconfigured, governments are taking a more active role and private capital is being drawn into strategic industries.
This transition will take time. But as the Fast Forward discussion makes clear, its trajectory is already set.
Critical minerals are no longer a background concern. They now sit at the intersection of security, industrial strategy and global markets, and will continue to shape all three in the years ahead.
To hear more insights on how governments are rethinking industrial policy, investment and markets to secure the materials underpinning modern warfare, tune in to the complete conversation.
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