On July 30, 2026, President Trump signed Presidential Determination No. 2026-19 under the Defense Production Act, delegating authority to the Commerce Department to restrict exports of recoverable critical minerals including battery black mass, rare-earth magnet scrap, and tungsten swarf. Six days later, the Bureau of Industry and Security issued an emergency rule locking the materials to domestic buyers starting August 27. The move marks a fundamental pivot in American mineral strategy: Washington is no longer just trying to dig more critical materials out of the ground. It is asserting sovereign claim over the strategic value embedded in what the country throws away.
Introduction
The warehouse sits on the eastern edge of a Nevada industrial park, indistinguishable from the distribution centers on either side of it except for the faint chemical smell that clings to the loading bays. Inside, pallets of shredded lithium-ion battery material are stacked floor to ceiling, a grayish-black powder that looks, to the uninitiated, like particularly unpleasant household waste. To Matt McAdams and the small circle of American recyclers who have spent years trying to persuade Washington to pay attention, it looks like something else entirely: a strategic reserve that the United States has been quietly shipping overseas by the container load for decades.
For most of those decades, nobody in a position of authority disagreed with the arrangement. Scrap was scrap. Markets cleared it. Whoever offered the best price took possession, and the material flowed, almost invariably, toward processing facilities in China or in countries within China's industrial orbit. The logic was pure commodity economics, and it held until April 4, 2025, when Beijing introduced export controls on seven heavy rare earth elements and their derivative compounds, and the abstraction of supply-chain vulnerability became, for some American manufacturers, a very concrete problem: empty shelves, idle machines, and in at least one documented case, a temporary shutdown at a Ford plant in Chicago.
On July 30, 2026, President Trump signed Presidential Determination No. 2026-19, invoking Section 101 of the Defense Production Act of 1950 to grant the Commerce Secretary authority to impose export restrictions on recoverable critical minerals and materials, a category the determination defines to include black mass, end-of-life rare-earth permanent magnets, tungsten swarf, and other waste and scrap containing critical minerals. Six days later, the Bureau of Industry and Security published a temporary final rule requiring that, as of August 27, one hundred percent of monthly domestic sales of covered materials be allocated to U.S. persons. The rule expires in one year, though BIS has reserved the right to extend it. What Washington once treated as an afterthought of industrial production it is now treating as a sovereign asset.
The Material the Markets Forgot
To understand why the administration moved with such unusual speed, it helps to understand what, exactly, is at stake inside the scrap stream. Black mass is the industry term for the shredded residue of spent lithium-ion batteries: a dense mixture of aluminum, copper, iron, lithium, cobalt, nickel, and manganese that emerges from the crushing process as a fine, dark powder. It is the feedstock from which battery-grade metals can be recovered and returned to productive use. The U.S. black mass recycling market was valued at roughly 1.16 billion dollars in 2024; forecasters project it will reach 4.75 billion dollars by 2033, growing at a compound annual rate of more than seventeen percent as electric vehicle adoption accelerates and the first generation of large-format EV battery packs reaches end of life.
Tungsten occupies a different corner of the strategic calculus but is, if anything, more acute. The metal is essential to cutting tools, armor-piercing ammunition, and a range of defense electronics. The United States has no operating domestic tungsten mine. Chinese producers control the overwhelming majority of global output. With no primary domestic supply and limited allied alternatives, scrap recovery has become one of the only viable pathways to any domestic tungsten supply whatsoever. Amermin, a privately held recycler, submitted a letter to Commerce Secretary Howard Lutnick in March 2026 making precisely this argument: that uncontrolled tungsten scrap exports represented an unacceptable risk to American industrial and military readiness.
The scale of what was leaving the country, often unnoticed, is striking. Tracking data from the Basel Action Network puts U.S. electronic waste exports at approximately 33,000 metric tons per month. A substantial portion of that stream contains black mass and other mineral-bearing scrap. Once exported, those recoverable minerals are processed at foreign facilities, the majority located in China or in supply-chain relationships that feed into Chinese midstream refining. The Presidential Determination frames this with deliberate directness: the United States relies heavily on imports of certain CMMs from foreign sources, threatening serious and sustained supply chain disruptions, and immediate action is imperative. That finding is the legal predicate for everything that follows.
The Mechanics of the Order
The Presidential Determination itself does not impose any immediate export restrictions. What it does is delegate authority: the President hands the Secretary of Commerce the power to act, and Commerce then exercises that power through its own regulatory machinery. The speed at which that machinery moved was, by the standards of federal rulemaking, remarkable. There were two business days between the signing of the determination and the appearance of a pre-publication copy of the Bureau of Industry and Security rule in the Federal Register. The prohibition on exporting covered materials takes effect less than a month after Trump gave Commerce the authority to act.
The rule covers four Schedule B commodity codes: tungsten waste and scrap under 8101.97.00.00, and black mass under 8549.13.00.00, 8549.14.00.00, and 8549.19.00.00. The core requirement is stark. As of August 27, 2026, U.S. persons engaged in the sale of black mass or tungsten waste and scrap must allocate one hundred percent of their monthly sales to U.S. persons. The covered materials must also remain physically located within the United States unless otherwise authorized by BIS. Critically, the rule applies not only to third-party export sales but also to recyclers transporting black mass to their own foreign-owned processing operations: a provision designed to prevent corporate structures from creating a workaround.
There are relief mechanisms. Companies may apply to BIS for an adjustment or exception, and BIS has committed to responding within fourteen days. Interim relief in the form of a temporary license is available while a request is pending. Comments on the temporary final rule are due by November 4, 2026, using docket BIS-2026-0364. The rule also carries explicit forward guidance that BIS may issue additional allocation orders targeting other recoverable critical minerals and materials, a phrase that has drawn close attention from lawyers advising scrap processors across the country. This is, in the agency's own framing, potentially only the beginning.
The Lessons of 2025
The policy did not emerge from nowhere. It is the direct descendant of a sequence of supply disruptions that began in early 2025 and accelerated through the year in ways that American policymakers did not fully anticipate and have not yet fully resolved. China's announcement on February 4, 2025, requiring export licenses for tungsten, tellurium, bismuth, indium, and molybdenum attracted relatively little attention outside specialist circles. The April 4 controls on seven heavy rare earth elements and their compounds attracted considerably more, particularly after it became clear that Beijing was approving only an estimated twenty-five percent of license applications, including those from U.S. firms.
The effects were not theoretical. Car makers in the United States and Europe struggled to obtain permanent magnets during April and May 2025. Some were forced to cut utilisation rates; at least one, Ford, temporarily shut down a plant. Chinese antimony exports fell by roughly ninety-seven percent after the August 2024 restrictions, and global prices surged approximately two hundred percent. Japan, one of the most sophisticated processors of rare-earth materials in the world, found that China had simply stopped exporting dysprosium and terbium to its market entirely, along with molybdenum powder and unalloyed yttrium and scandium.
As I reported in my analysis of the November expiration risk facing critical mineral supply chains, the partial détente produced by the Trump-Xi agreement in October 2025 suspended some of the newer Chinese measures for one year while leaving the April controls and the broader licensing architecture fully intact. That suspension is set to expire in November 2026, which places the timing of the new domestic allocation rule in a specific strategic context: the administration is attempting to build a domestic feedstock base for U.S. processors before that expiration arrives and before the January 1, 2027 deadline requiring defense contractors to eliminate Chinese minerals from their supply chains. The scrap regime, in this reading, is not a standalone policy. It is one component of a layered response to a vulnerability that 2025 made impossible to ignore.
The Capacity Question
The reaction from American industry has been neither uniformly enthusiastic nor uniformly hostile, and the division maps fairly cleanly onto where each constituency sits in the supply chain. Domestic recyclers and processors are broadly supportive. McAdams, at Amermin, was unambiguous: the company and its industry partners have been calling for exactly this kind of export control, arguing that domestic processors need reliable and consistent sources of tungsten scrap to justify the capital investment required to build new capacity. At full build-out, Amermin projects that its tungsten carbide output could supply roughly eighteen percent of estimated annual U.S. consumption, a figure that underscores both the potential and the scale of what remains to be built.
Redwood Materials, the Nevada-based battery recycler founded by former Tesla executive JB Straubel, has committed to producing one hundred gigawatt-hours of cathode-active materials annually by 2026 using recovered minerals. Ascend Elements has constructed a sixty-five million dollar recycling facility in Hopkinsville, Kentucky, projected to process up to 24,000 metric tons of lithium-ion battery material annually. These are genuine investments, but they represent the leading edge of a domestic processing sector that, by most assessments, is not yet capable of absorbing the volumes that would be redirected by a comprehensive export ban.
That is the concern animating Robin Wiener, president of the Recycled Materials Association, whose membership includes scrap dealers and processors that have built business models around international market access. Wiener does not dispute the strategic objective; she disputes the sequencing. Imposing a domestic sales requirement, she argues, overlooks critical industry dynamics, particularly when domestic processing capacity and capabilities for these materials cannot adequately handle the volumes recycled domestically. Exports, in her framing, serve as a relief valve: they move material that has no current domestic buyer through the recycling supply chain rather than allowing it to pile up, lose value, or, worst of all, discourage collection in the first place. The fear among scrap-sector participants is a near-term bottleneck in which export restrictions create a domestic surplus of unprocessed material while the processing infrastructure needed to handle it remains years and hundreds of millions of dollars away from completion. That risk is real, and the administration's answer to it so far is largely the exception and adjustment process at BIS, which is a regulatory mechanism, not a capital deployment program.
The Larger Architecture
The scrap-restriction rule does not stand alone in the policy landscape. It sits alongside a series of measures that, taken together, constitute the most ambitious attempt at critical minerals industrial policy in American history. The Section 232 investigation of processed critical minerals, launched in April 2025, produced a Presidential Proclamation in January 2026 directing negotiations to secure adequate critical mineral supplies. The July 2026 executive order on defense supply chains explicitly requires manufacturers supplying the Pentagon to cease sourcing critical minerals from Chinese suppliers by January 1, 2027. And as I reported in August, the State Department convened more than two hundred mining executives on August 7, 2026, with three billion dollars in announced investments explicitly linked to restocking weapons inventories depleted in the Iran conflict.
The G7 architecture described in my earlier reporting adds a multilateral dimension that the domestic scrap rules do not address: price floors, joint procurement instruments, and border-adjusted reference prices designed to make allied supply chains commercially viable against Chinese competition. The scrap rules exist in some tension with that effort, since allied trading partners, including Japan, South Korea, Germany, and Canada, also process recovered materials and may find themselves effectively locked out of U.S. scrap flows that they have historically relied upon. The BIS rule does not exempt allied-nation buyers from the domestic allocation requirement; exceptions require individual applications. That framing will generate diplomatic friction, particularly with partners who have made their own investments in critical mineral processing infrastructure and who are supposed to be part of the solution.
The deeper strategic logic, however, is not difficult to follow. China refines, on average, roughly seventy percent of the world's supply across nineteen of twenty important strategic minerals, according to the IEA's 2026 Global Critical Minerals Outlook. It controls ninety percent of the global supply of rare-earth permanent magnets. Its export control architecture, refined through repeated deployments since 2023, has demonstrated the ability to cause rapid and painful disruptions to manufacturing supply chains in the United States, Europe, and Japan. Against that backdrop, the proposition that used smartphones and spent EV battery packs constitute a strategic reserve is not hyperbole. It is, as the Presidential Determination makes explicit, the operative policy of the United States government.
A Reserve Hiding in Plain Sight
Back in the Nevada warehouse, the pallets of black mass carry a new legal status as of August 27, 2026. They are no longer simply a commodity awaiting the best bid from a global market. They are, in the language of the Presidential Determination, scarce and critical materials essential to the national defense, subject to the sovereign authority of the United States government to direct toward domestic use. Whether that authority translates into the processing capacity needed to actually refine them into usable battery metals, rare-earth alloys, or tungsten carbide is a question the rule cannot answer by itself.
The honest accounting of where the United States stands is sobering. The country is fully import-dependent for twelve critical minerals and relies on imports for more than half its consumption of an additional twenty-nine. The domestic recycling sector, while growing rapidly, processes a fraction of what will be needed to supply the defense industrial base, the electric vehicle industry, and advanced manufacturing simultaneously. Building the hydrometallurgical facilities needed to separate recovered black mass into battery-grade lithium, cobalt, and nickel requires capital measured in the hundreds of millions of dollars per plant and permitting timelines measured in years, not months.
What the administration has done, with unusual speed and through a legal instrument designed for wartime mobilisation, is assert that those materials will stay inside the country while it figures out how to process them. It is a necessary precondition for a domestic industry, but it is not sufficient. The gap between asserting ownership of the reserve and having the industrial capacity to exploit it is where the real work begins, and where the outcome of this particular gambit remains, for now, genuinely uncertain.
McAdams, for his part, is not waiting for certainty. Amermin is moving forward with its campus build-out, betting that the feedstock security created by the new rules will finally justify the investment that domestic tungsten recycling has long needed but has never reliably attracted. "Domestic processors need reliable and consistent sources of tungsten scrap to secure investment in new capacity," he told Recycling Today after the rule was published. "Keeping this material in the U.S. is vital to grow domestic processing capacity." It is, at its core, a chicken-and-egg problem that Washington has now chosen to resolve by mandating the egg. Whether the chickens arrive on schedule is the question that will define the next chapter of American mineral strategy.