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Bill would create Strategic Resilience Reserve for

minerals

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Seven-person board would govern stockpile's operations

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Minerals would be stored in warehouses around US

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Measure could spark Western price structure for minerals

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Bill seeks to counter Chinese dominance of key minerals

By Ernest Scheyder

Jan 15 (Reuters) - A bipartisan group of U.S. lawmakers

on Thursday introduced a bill to create a $2.5 billion stockpile

of critical minerals, a move aimed at stabilizing market prices

and encouraging domestic ‌mining and refining.

The bill marks Washington's latest attempt to offset what

policymakers view as Chinese manipulation of prices for lithium,

nickel, rare earths and other critical minerals - vital ​for

items from electric vehicles to high-tech weaponry - that has

stymied American mining companies for years.

A China-generated glut of ‍lithium, for example, led North

Carolina-based Albemarle to pause U.S. expansion plans

in 2024. The Pentagon ⁠became the largest shareholder in

Nevada-based ⁠rare earths company MP Materials ( MP ) in July

amid intensifying Chinese competition.

The 68-page bill says China has moved to "weaponize its

influence over prices and volumes in the ‌contest for access to

critical minerals."

BILL AIMS TO 'INSULATE U.S. FROM FOREIGN ​THREATS'

China has rejected assertions that it manipulates the market

for critical minerals, saying in November it is committed to

"upholding the security and stability of global production and

supply chains."

To become law, the measure ⁠must pass the House of

Representatives and the Senate and ‍be signed by ​President Donald

Trump.

The bill would create a Strategic Resilience Reserve with a

seven-person board, modeled on the Federal Reserve's governance

structure, which would oversee the fund.

Members, appointed by the president and confirmed by the

Senate, would be ‍tasked with buying minerals considered critical

by U.S. agencies and stockpiling them at warehouses across the

country. The board would need the technical expertise to ensure

the minerals are stored properly. Certain lithium derivatives,

for example, emit hydrogen when exposed to water.

The bill prioritizes recycled material, but minerals

extracted from mines would be eligible. Allied countries would

be able to join the reserve if they contributed at least $100

million.

Minerals could be sold for private-industry or defense

purposes. Any profit would be used to ​buy more ‍minerals and keep

the stockpile active in perpetuity.

"Providing targeted investments and stockpiling key inputs

will help insulate the U.S. from foreign threats and will

provide a significant - and cost effective - boost to the U.S.

economy," said Senator ​Jeanne Shaheen, a New Hampshire Democrat

and ranking member of the Senate Foreign Relations Committee.

Senator Todd Young, an Indiana Republican, co-sponsored the

legislation. Representative Rob Wittman, a Virginia Republican,

introduced the same measure in the House.

The reserve's board would have flexibility over how to buy

minerals, according to Senate aides. It could, for example,

agree to pay twice the existing market price for rare earths - a

market dominated by China - if such purchases supported U.S.

mines.

Many niche-but-essential minerals on which Beijing has

imposed export controls are not traded or lightly traded,

sparking a ​push for minerals prices not tied to Chinese

production.

"It's certainly possible this reserve could create a Western

price for certain critical minerals," a Senate aide said.

Group of Seven finance ministers this week discussed floors

for minerals prices. Trump on Wednesday said U.S. over-reliance

on other nations for critical minerals is a ‍national security

threat.

Australia is also developing its own critical minerals

reserve.