The US and key allies have taken new steps to reduce dependence on China for critical minerals and rare earths. 

The State Department announced on Friday that the US and its allies committed to strengthening their artificial intelligence supply chains and cross-border logistics. They reached an agreement at the Second Pax Silica Summit.  

They signed a Joint Statement on AI Opportunity to align on a "pro‑growth, pro‑innovation" approach. The signatories will empower "builders, startups, developers, and the private sector while securing global AI supply chains. "

Under Secretary of State for Economic Affairs Jacob Helberg launched Pax Silica in December last year. The initiative aims to advance more secure and innovative supply chains for critical minerals, energy inputs, advanced manufacturing, and semiconductors. 

"The future of AI will not be determined by who regulates first," Helberg said on X. "It will be determined by who builds first and builds the most capacity. A future where we ACCELERATE INNOVATION AND PRIVATE INVESTMENT is welcomed." 

The State Department hosted the second Pax Silica Summit in Washington on Thursday. Thirty-five nations signed the joint statement. 

Critical Minerals Are Flashpoint

Critical minerals have become the latest flashpoint in a global scramble to protect supply chains. China controls 60% to over 90% of global critical mineral processing. The percentage depends on the mineral and the stage of the supply chain. 

The US relies on these for AI, missile defense, energy infrastructure, and emerging technologies.

New signatories to Pax Silica included the European Union (EU), Germany, Greece and the Netherlands, among seven others. In addition, Pax Silica counts India, Israel, Japan, Norway, the Republic of South Korea and the United Kingdom as members. 

"We plan to deepen cooperation to support the supply chains of tomorrow," the 35 signatories said in a joint statement. "This includes joint R&D initiatives to expand reliable energy infrastructure, produce critical minerals, harness skilled workforces, and accelerate the development of trusted semiconductor ecosystems."

The US, the EU, and Japan agreed in February to prevent supply chain disruptions and promote research and innovation efforts. The three economic powers made the announcement after the Critical Minerals Ministerial in Washington. 

US Supports Critical Mining Sector

The US has taken these actions to support its critical mineral supply chain. David Copley, a National Security Council Senior Director, said the US will deploy billions in capital to support the sectors.

MP Materials Corp. (NYSE:MP), United States Rare Earth Inc. (NASDAQ:USAR), and the United States Antimony Corp. (NYSE:UAMY) have benefited. Washington has poured subsidies, guarantees, and reshoring incentives into rebuilding its supply chains.

MP Materials announced in July last year a deal to supply Apple Inc. (NASDAQ:AAPL) with rare earth magnets manufactured in the US from 100% recycled materials. The agreement "advances MP’s mission" to restore the rare earth supply chain to the US, it said at the time.  

For the signatories of Pax Silica, strengthening critical minerals, energy, compute, and semiconductor manufacturing is central. “We share the view that the future of AI should be built on a foundation of trusted collaboration, economic security, innovation, and fair competition," they said.

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