This post was originally published on this site.
The United States’ move to keep more critical-mineral scrap at home could strengthen supply security, but its success will depend less on how much material stays in the country than on how much domestic industry can turn into usable minerals.
Later in August, some lithium-ion battery scrap, including black mass, and tungsten scrap will have to be sold to US buyers unless an adjustment or exception applies, according to the Financial Times. The one-year measure is designed to retain strategically important material as Washington seeks to reduce reliance on foreign processing capacity.
The logic is compelling. If the US needs more critical minerals, why export material that already contains them? But scrap is not the same thing as supply. It still must be collected, sorted, processed and refined into products that battery, defence and industrial customers can use.
From GEM Mining Consulting’s perspective, that distinction should determine how the policy is judged. The meaningful measure is not tonnes of scrap retained, but the amount of qualified secondary mineral supply that ultimately returns to the domestic economy.
Usable supply
Recycling can strengthen mineral security, but it cannot eliminate the need for mining and refining. The International Energy Agency estimates stronger recycling could reduce the need for new mine development by about 40% for copper and cobalt and 25% for lithium and nickel by 2050 under its energy-transition scenario.
Those are significant reductions, yet they leave substantial demand for primary production. More importantly, one tonne of black mass is not equivalent to one tonne of lithium, nickel or cobalt supply. Its value depends on chemistry, metal content, collection and sorting, recovery costs and whether the finished material meets customer specifications.
GEM encountered a similar issue in its 2025 work on copper slag. Large stocks of secondary material do not automatically constitute economic resources. Grade, recovery, energy consumption, CAPEX, OPEX, regulation and execution risk determine whether contained metal becomes saleable supply. Critical-mineral scrap deserves the same scrutiny.
A useful framework is what GEM calls recoverable strategic supply. Material must clear five hurdles: it must be available; collected and sorted; supported by domestic processing capacity; technically and economically recoverable; and capable of producing material that meets domestic customers’ specifications.
The US measure primarily addresses the first hurdle. It keeps more feedstock in the country. It does not by itself improve collection, build refining capacity, increase recovery rates or qualify the finished product for battery or defence applications.
Black mass illustrates how quickly the bottleneck can shift. The most complete national baseline available for this analysis comes from the US Department of Energy for 2023. Intermediate processing facilities could handle nearly 175,000 tons of batteries and manufacturing scrap, while facilities capable of recovering battery materials represented about 35,500 tons of capacity. Another 76,000 tons of material-recovery capacity was planned over the following two to four years.
Those figures are not a 2026 capacity snapshot, but they demonstrate the difference between shredding batteries into black mass and recovering lithium, nickel, cobalt, manganese or graphite into usable products.
Timing complicates the picture further. The IEA says global recycling capacity is currently being built faster than feedstock is becoming available. If every announced project were completed, capacity in 2030 could reach about seven times available feedstock. After 2030, the equation changes as more electric-vehicle batteries reach the end of their lives. By 2040, announced recycling capacity in Europe and the US would cover only about 30% of available feedstock.
That creates a difficult investment problem: build too late and recovery capacity becomes the bottleneck; build too early and plants may struggle for years to secure enough economic feedstock.
Export restrictions add another complication. The OECD says restrictions on critical raw materials increased fivefold between 2009 and 2024, with waste and scrap the most frequently restricted category. Europe is also tightening controls on battery waste and black mass.
Yet international scrap trade can help recycling plants reach scale and operate efficiently. Restrict exports before competitive domestic recovery capacity is ready, and material could sit idle or be processed less efficiently while established plants elsewhere lose feedstock. In the short term, that could leave demand for newly mined material higher than policymakers anticipate.
Tungsten presents a different test. The US Geological Survey says tungsten has not been commercially mined in the country since 2015, but seven US companies can convert concentrates, ammonium paratungstate, tungsten oxide and/or scrap into tungsten metal powder, tungsten carbide powder or chemicals. Recycling supplied the country’s only domestic tungsten supply in 2025.
The contrast matters. Black mass and tungsten scrap fall under the same broad policy approach, but they enter domestic supply chains at very different stages of maturity. Gross tonnes retained therefore reveal little about the actual security benefit.
Measure conversion
A better metric would track what GEM calls the scrap-to-security conversion ratio: qualified domestic secondary mineral output divided by the critical-mineral content retained because of the policy.
Both sides should be measured in contained mineral units rather than gross tonnes of mixed scrap.
Consider a simple illustration. Suppose the policy retains scrap containing 100 units of critical-mineral content. Of those, 85 reach domestic recovery plants, 75 are successfully recovered and 68 ultimately meet customer specifications. The conversion ratio is 68%. Those 68 usable units — rather than the original 100 — represent the meaningful contribution to supply security.
The problem is that available public data do not yet appear sufficient to calculate such a ratio reliably nationwide. The US datasets reviewed for this analysis do not provide a single national series tracking retained critical-mineral content and qualified recovered output on the same basis.
That is an opportunity for policymakers. Reporting metal-content flows through collection, pre-treatment, recovery and final qualification would make it possible to measure whether the policy is creating strategic supply rather than simply assuming that retained scrap equals security.
The principle is consistent with our work on strategic mineral stockpiles. A recent preprint by GEM Consulting’s Guzmán and Karpunina finds stockpiling works best as one component of a broader resilience strategy that includes recycling, diversification and substitution. Clear rules, governance and industry coordination also matter.
Scrap retention is not a government stockpile, but it can function as a form of distributed strategic feedstock. Its value ultimately depends on the domestic system’s ability to transform that material into something industry can use.
The same distinction applies more broadly to mineral substitution. GEM’s previous copper-substitution work emphasized the gap between what is technically possible and what can matter at market scale. Economics, industrial maturity and adoption determine the outcome. Secondary minerals should face the same test.
Washington has tools to help close that gap. The Department of Energy has offered up to $500 million in 2026 for domestic critical-material processing, recycling and related manufacturing. More predictable access to feedstock could also encourage private investment.
But export restrictions alone cannot build an integrated recycling industry. Black mass and tungsten scrap still have to travel the entire chain from retention and processing through recovery and product qualification at a competitive cost.
For miners, investors and governments, that distinction has consequences. Secondary supply will grow, but retaining scrap does not tell us how quickly recycling can displace primary production. If processing and qualification lag, the US may improve its strategic position without immediately reducing its need for new mines. If domestic conversion capacity succeeds, material already above ground could become a much larger source of supply.
The better question, then, is not how much critical-mineral scrap the US can keep. It is how much usable mineral supply it can create from every unit it retains.
That is where circularity becomes supply security — and where this policy should ultimately be judged.
* Alina Karpunina is project manager at GEM Mining Consulting.
