Critical-mineral demand outstrips domestic supply, while nuclear makes a comeback

Industries compete for critical minerals

The United States is racing to establish domestic supplies of rare earths and other critical minerals, but demand is growing faster than new capacity can come online. As AI infrastructure, energy projects, defence manufacturing and advanced technologies all jockey for the same materials, policymakers and industry leaders are confronting a difficult reality: reducing dependence on China is expected to take years, not months.

What to know

• Critical minerals such as neodymium, praseodymium, dysprosium and terbium are essential inputs for electric motors, wind turbines, data centres, advanced manufacturing equipment and defence systems. China holds large concentrations of these minerals.
• China also remains the dominant processor and refiner of many of these materials, which means supply chain risk persists even when raw materials are sourced elsewhere.
• Large-scale production in China helped keep global prices for rare earths relatively low. While this benefited manufacturers, it also made it difficult for higher-cost projects in the United States and allied countries to attract private investment. As a result, many domestic projects have relied on government support to move forward.

What to expect next

• Federal efforts to reduce reliance on Chinese supply chains are accelerating, particularly for defence and other strategic industries. But new mines, processing facilities and manufacturing plants often require years of permitting, construction and qualification before reaching commercial scale.
• Industry groups and analysts continue to warn that U.S. mining, refining and magnet manufacturing capacity can’t meet projected demand in the near term.
• For defence contractors and federal procurement supply chains, restrictions on critical minerals and components from foreign entities of concern such as China are set to take effect 1 Jan. 2027. Faced with that deadline, industry participants are seeking waivers.

What it means for energy supply chains

• Critical minerals are becoming a supply chain issue as much as an energy or manufacturing issue. As companies diversify sourcing away from China, supply chains are becoming longer and more complex, often involving multiple countries for mining, processing, refining and final manufacturing.
• Shippers should expect continued volatility in transportation flows as new production hubs emerge across North America and allied markets.
• Companies with exposure to energy infrastructure, AI data centres, batteries and advanced manufacturing should closely monitor market trends, diversify suppliers and build flexibility into sourcing and transportation strategies before shortages or trade restrictions disrupt supply.

Data centre boom fuels nuclear comeback ambitions

Driven by the need to power AI data centres, the United States is poised to see a nuclear energy resurgence.

Tech giants including Microsoft, Google, Amazon and Meta are all financing nuclear projects. Microsoft, for example, is investing more than $16 billion to restart the twin of the Three Mile Island reactor near Harrisburg, Pennsylvania, that experienced a meltdown in 1979. Renamed the Crane Clean Energy Centre, it’s slated to start powering Microsoft’s AI data centres in 2027.

A widespread nuclear energy comeback would face specific logistics challenges.

What to know

• Nuclear energy provides constant, reliable, low-carbon energy suited to meet data centres’ 24/7 energy demands.
• Nuclear power currently generates roughly 18% of total U.S. electricity and provides 55% of carbon-free power. Based on a series of presidential orders in May 2025, the United States aims to triple its nuclear capacity to 400 gigawatts by 2050.
• In June, the United States and Canada announced separate plans to each build 10 new nuclear reactors. This is the largest nuclear push across North America in decades.

What it means for energy logistics

• Nuclear reactor projects require moving oversized, high-value components under strict timelines. A nuclear renaissance would create new demand for project logistics, heavy-haul transportation and specialised energy supply-chain services.
• Aside from reactors themselves, associated investments in transmission and grid infrastructure would further increase demand for transformers, turbines and other critical equipment—all with their own specialised logistics demands.
• Companies involved in nuclear and AI-driven energy projects should engage logistics providers early in project planning—specifically in the front-end engineering design (FEED) stage to secure delivering capacity, avoid bottlenecks and keep construction schedules on track.

U.S. tariff changes

The latest changes to U.S. tariff policy underscore that trade compliance and customs expertise remain critical supply chain capabilities:

• Across-the-board Section 122 tariffs expired in July and were immediately replaced with Section 301 tariffs tied to screening for forced labour in supply chains. Imports from 60 countries are subject to these new tariffs, at rates of 10% or 12.5%.
• While negotiations on the U.S.-Mexico-Canada Agreement continue, Canadian goods face the threat of 50% tariffs under Section 338, which allows for additional duties when a foreign country is found to be treating U.S. commerce unfairly or discriminatorily. The implementation date is 19 August 2026.
• In retaliation for certain taxes on U.S. tech companies’ revenues, the U.S. administration has threatened 25% tariffs under Section 301 on goods from several European countries. It is currently unclear if and when these may be implemented.

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