A July 22 GAO technology assessment found the U.S. at minimum 41% import-dependent on each of 11 battery and semiconductor minerals, with battery recycling offering a viable 2–3 year pathway to reduce reliance on cobalt, lithium, nickel, and copper. Within eight days, President Trump signed a Presidential Determination under the Defense Production Act treating recoverable critical minerals as strategic defense assets, followed by a BIS rule effective August 27 requiring 100% of black mass and tungsten scrap sales to remain domestic. The sequence reveals a government moving faster on supply restriction than on the processing capacity needed to absorb it.
Introduction
Two documents published within eight days of each other in late July 2026 define the current shape of U.S. critical mineral strategy more precisely than any single policy statement has managed to do. The first, GAO-26-108687, is a technology assessment released on July 22 by the Government Accountability Office, submitted to the House Committee on Energy and Commerce. It surveys substitution and recycling technologies across 11 minerals central to batteries and semiconductors, and it arrives at a conclusion that is simultaneously reassuring and sobering: the technology to recover lithium, cobalt, nickel, and copper from end-of-life batteries is mature, domestic infrastructure is not, and the semiconductor side of the supply chain will not be meaningfully de-risked through recycling or substitution for at least a decade.
The second document is a Presidential Determination signed on July 30, invoking Section 101 of the Defense Production Act to authorize the Secretary of Commerce to restrict exports of recoverable critical minerals and materials. Where the GAO report is analytical and cautious, the Determination is declaratory and urgent, finding that recoverable critical minerals are "industrial resources necessary to promote the national defense" and that reliance on imports "threatens serious, sustained supply chain disruptions." On August 6, the Bureau of Industry and Security gave the order teeth, publishing a temporary final rule requiring that 100% of monthly black mass and tungsten scrap sales be allocated to U.S. buyers, effective August 27.
Taken together, the sequence illustrates a tension that will define the next two to four years of U.S. mineral policy: the executive branch is moving at regulatory speed to retain recycled feedstock onshore, while the domestic processing industry operates at a pace constrained by capital, infrastructure, and, in some cases, bankruptcy. Understanding both documents, and the gap between them, matters for anyone invested in battery recycling, semiconductor manufacturing, or defense procurement.
What the GAO Found: Eleven Minerals, Two Timelines, One Structural Gap
GAO-26-108687 centers on 11 minerals used in batteries and semiconductors, a scope that excludes rare-earth magnet supply chains entirely. That omission is analytically significant and addressed separately below. Within its defined scope, however, the report offers one of the most clearly structured federal assessments of where recycling and substitution technologies actually stand.
The U.S. is at minimum 41% import-dependent on each of the 11 minerals examined. For gallium, graphite, manganese, arsenic, and indium, import dependence reaches 100%. The USGS Mineral Commodity Summaries 2026, published February 6, found that 12 critical minerals overall carried a net import reliance of 100%, with an additional 34 at 50% or more. China sits at the center of most of these dependencies: it controls 99% of global gallium production, dominates graphite supply, and holds a commanding position in cobalt and lithium processing. The GAO notes that in many cases, the source for these minerals is China, and export controls Beijing introduced in 2025 have already demonstrated what concentrated supply looks like when it becomes a policy instrument rather than a market dynamic.
The report uses three time horizons: near-term is 2 to 3 years, medium-term is 3 to 10 years, and long-term is more than 10 years. Battery recycling, which uses chemical leaching and smelting to recover copper, cobalt, lithium, and nickel at high rates, falls solidly in the near-term category. The technology is described as mature. The constraint is not scientific; it is logistical. The U.S. lacks the infrastructure to collect large quantities of batteries and process them domestically. In practice, black mass and battery scrap are still being exported rather than processed at home.
The semiconductor picture is considerably less optimistic. Substitution for gallium and indium is unlikely to have a near-term effect on import reliance because alternative materials do not perform as well across the same operating conditions. Recycling technologies for semiconductor manufacturing scrap are not standard practice in the U.S., and processes for recovering minerals from discarded electronics, where the target elements are bonded with other materials, remain in pilot-stage development. The GAO's honest summary: semiconductor recycling and substitution is a 10-plus year proposition at current trajectories.
The four policy options GAO outlines are: funding research and development to grow both substitution and recycling technologies; establishing national collection infrastructure for e-scrap and end-of-life batteries, including financial incentives for collection and storage; harmonizing standards and qualification processes; and deploying financial incentives and liability protections to lower barriers to commercial entry. These are sensible, well-documented options. None of them are fast.
The Recycling Economics Problem the GAO Report Surfaces
The GAO's finding that battery recycling technology is mature but domestic capacity is inadequate understates a structural economic problem that will not be resolved by the Presidential Determination alone. Black mass, the shredded lithium-ion battery scrap containing cathode materials (lithium, cobalt, nickel, manganese), anode materials (graphite, silicon), and residual cell components, can account for roughly 48% of hydrometallurgical recycling costs. The spread between those costs and achievable market prices for recovered materials is tight under good conditions and has been worsening as lower-value lithium iron phosphate batteries make up a growing share of the end-of-life stream.
The competitive pressure from international buyers has been severe. Over the past 18 months, foreign purchasers have paid above-market prices for U.S. scrap, outbidding domestic processors and directing feedstock abroad. Two prominent North American battery recyclers, Li-Cycle and Ascend Elements, have both filed for bankruptcy. The DOE's Round-3 battery grants, covered in this publication in September 2026, included black-mass refining and cathode rejuvenation among its portfolio priorities precisely because the commercial pathway for these operations has not closed on its own. The grants required recipients to finance at least half of total project costs, a threshold designed to filter out projects that cannot demonstrate commercial viability.
GAO's note that experts told the assessment team U.S. battery recyclers lack capacity is accurate but incomplete as a diagnosis. Capacity is a function of capital, feedstock certainty, and product qualification by end-users. An analyst at Rare Earth Exchanges put the distinction plainly: a laboratory recovery rate is science; reliable feedstock plus industrial throughput plus qualified product plus positive margins is a business. The BIS rule addresses the feedstock piece by preventing export. It does not address the other three components.
The Presidential Determination and BIS Rule: What They Actually Do
The Presidential Determination signed July 30 is frequently described in press coverage as a ban on exports of recycled critical minerals. It is not, at least not yet. The Determination makes the statutory findings necessary to unlock allocation authority under Section 101 of the Defense Production Act, and it directs the Secretary of Commerce to implement the authority through regulations, rules, guidance, and procedures. The White House fact sheet describes the action as granting Commerce "the authority to institute export restrictions" on recoverable critical minerals and materials. The Determination itself imposes no immediate restriction.
The BIS temporary final rule published August 6, 2026, titled "DPAS Directive Allocation Order and Additional Requirements for Recoverable Critical Minerals and Materials," is where the operational content lives. Effective August 27, U.S. persons that sell black mass or tungsten waste and scrap must allocate 100% of their monthly sales to U.S. persons unless they obtain an adjustment or exception from BIS. The restriction runs through August 27, 2027, though BIS may extend it. Public comments are due November 4, 2026. BIS has committed to reviewing adjustment and exception requests within 14 days of receipt and will cooperate with U.S. Customs and Border Protection to detain covered materials pending review.
The definition of covered materials is important. "Recoverable critical minerals and materials" includes black mass from used batteries, end-of-life rare-earth permanent magnets, swarf, and other waste and scrap containing critical minerals. Copper scrap is explicitly excluded, as it is already addressed under a separate July 2025 proclamation. Tungsten is included explicitly: the U.S. has not commercially mined tungsten since 2015, making recovery and recycling the nation's only domestic source for a metal used in munitions and construction equipment. China controls 83% of global tungsten mining.
The Aluminum Association and Amermin, a privately held tungsten recycler, both welcomed the order. Amermin's founder and CEO Ryan McAdams stated: "The President and Secretary Lutnick deserve real credit for recognizing that recovered material is strategic supply and for drawing the definition of covered material broadly." Amermin had been leading a coalition of tungsten processors urging export licensing requirements since early 2026, warning in a March letter to Commerce Secretary Howard Lutnick that uncontrolled tungsten exports pose "an unacceptable risk to American industrial and military readiness."
The July 30 action sits inside a denser policy sequence than individual news reports convey. In March 2025, Trump invoked the Defense Production Act to expand domestic mineral production capacity. In January 2026, an executive order launched negotiations with trading partners on critical mineral agreements. In February 2026, the White House announced Project Vault, a $12 billion initiative to establish a Strategic Critical Minerals Reserve. On July 20, 2026, a separate executive order made it harder for defense contractors to secure waivers allowing critical mineral purchases from prohibited foreign suppliers. The July 30 Determination is the latest step in this sequence, not a standalone action.
The Rare-Earth Gap: What the GAO Report Does Not Cover
The most consequential analytical limitation of GAO-26-108687 is not what it gets wrong about the 11 minerals it examines; it is what it omits. Rare-earth magnet supply chains, encompassing neodymium, praseodymium, dysprosium, terbium, and the downstream processing and magnet manufacturing that converts them into functional components, are entirely outside the report's scope.
This is not a minor gap. China accounts for approximately 60% of global mined production of magnet rare earths, more than 90% of refining and separation, and approximately 94 to 95% of permanent magnet manufacturing. The U.S. was 67% net import reliant for most rare earth elements in 2025 and 100% reliant on foreign sources for scandium and yttrium, both of which have direct defense applications. As covered in this publication in August 2026, China Northern Rare Earth completed bulk commercial sales of praseodymium metal validated for grain-boundary diffusion modification in sintered NdFeB magnets in H1 2026, a development that reinforces the sophistication gap, not just the sourcing gap, facing Western supply chains.
The IEA's Global Critical Minerals Outlook 2026 adds quantitative context: demand for magnet rare earths has doubled since 2015 and is projected to increase by more than 30% by 2030. Existing and announced refining capacity in geographically diversified regions is equivalent to around two-thirds of expected mined supply by 2035, while planned magnet production outside China represents only one-third of projected demand. Battery recycling rates for rare earth elements remain low; average recycling rates across key energy minerals could rise from around 10% today to close to 20% by 2040, but rare earth magnet recycling is at an early stage relative to cobalt and copper.
The Presidential Determination partially addresses this gap by including end-of-life rare-earth permanent magnets in the definition of recoverable critical minerals and materials. That inclusion means magnet scrap and swarf containing neodymium and dysprosium are subject to the same 100% domestic allocation requirement as black mass. As analyzed in this publication's earlier coverage of the extraterritorial compliance crisis facing global magnet manufacturers, the combination of Chinese export controls and now U.S. retention rules is beginning to create a two-directional constraint on rare earth material flows. Whether domestic processing capacity can absorb the material being retained onshore is a question the GAO report does not answer, because it did not ask it.
Capacity, Feedstock, and the Implementation Gap
The central practical question raised by the BIS rule is whether the U.S. has, or can rapidly build, sufficient processing capacity to handle the black mass and tungsten scrap it is now retaining. The answer, at current trajectories, is no, at least not immediately. Domestic battery recycling capacity is projected to take two to four years to double. China accounts for over three-quarters of global battery pre-treatment capacity and 90% of material recovery capacity. Even if every ton of black mass generated in the U.S. remains onshore, routing it through inadequate domestic processing infrastructure does not automatically produce usable cathode materials or refined metals.
The GAO's near-term optimism about battery recycling rests on the assumption that collection infrastructure is built and that feedstock is available at scale. The BIS rule addresses the second condition by forcing domestic allocation, but collection infrastructure, which requires national e-scrap programs, storage facilities, and financial incentives to overcome safety barriers from battery storage, does not materialize through export restriction alone. Safety issues with battery storage and insufficient collection demand are barriers the GAO explicitly identifies as requiring separate policy action.
The economics of tungsten scrap tell a cleaner story, since tungsten has an established domestic recycling industry with specific buyers and known end-uses in cutting tools, munitions, and heavy equipment. The absence of any domestic tungsten mine since 2015 means scrap is not supplementing primary production; it is substituting for it entirely. Amermin's multi-year lobbying effort to restrict tungsten exports reflects the frustration of an industry that watched strategic material flow to China and Russia while U.S. defense procurement continued downstream. The BIS rule is a direct response to that lobbying, and the tungsten scrap market is arguably better positioned to absorb the rule's effects than the battery recycling sector.
For battery materials, the situation is more complicated. The DOE's $500 million Round-3 battery grants, awarded in August 2026 with explicit circular economy objectives, will help fund some of the processing infrastructure the GAO identifies as missing. But grant timelines, permitting, and construction schedules mean that capacity built with those funds will not be operational for at least two to three years. In the interim, the BIS rule creates a condition where domestic buyers must take 100% of covered material output, whether or not the processing economics support it, and where adjustment or exception requests will be the practical mechanism for managing cases where no viable domestic buyer exists at a given price.
Conclusion: A Policy That Moves Faster Than the Infrastructure It Needs
The convergence of the GAO report and the Presidential Determination in the same week of July 2026 is unlikely to be coincidental. The GAO's near-term finding on battery recycling provided analytical cover for an administration looking to justify aggressive action on recovered materials. The Determination and the BIS rule that followed represent a bet that constraining supply outflows will force investment in domestic processing, in much the same way that other supply-chain interventions have historically used trade instruments to create protected space for domestic industry development.
The bet may prove correct over a multi-year horizon. Recycling infrastructure that has struggled to compete with Asian buyers for feedstock now has a structural guarantee that feedstock stays home. Tungsten recyclers who have watched material flow to adversarial countries now have the legal framework they sought. The inclusion of end-of-life rare-earth permanent magnets in the definition of covered materials signals that the administration understands the magnet supply chain as a recycling problem as well as a mining and processing one.
The GAO's analysis, however, supplies a necessary corrective to policy optimism. Battery recycling being near-term viable means two to three years under favorable conditions, not two to three months. Semiconductor recycling and substitution being a 10-plus year proposition means that gallium, indium, and arsenic import dependence is not going to be resolved by any combination of recycling rules and R&D grants within a normal legislative cycle. And the report's omission of rare-earth magnet supply chains, which is a scope decision rather than an oversight, means that the most strategically exposed part of the critical mineral complex still lacks a comprehensive federal technology assessment.
A Congressional Research Service report assessing the policy landscape reaches a similar conclusion: despite a flurry of executive action and billions in new federal commitments, the gap between U.S. ambition and actual supply chain resilience remains wide. The BIS Directive Allocation Order that took effect August 27 is one of the most operationally specific mineral supply chain interventions in U.S. history. Whether it accelerates the infrastructure buildout the GAO identifies as necessary, or simply redirects material flows through a bottleneck that does not yet have the capacity to process them, will depend on implementation decisions made by Commerce, BIS, and the recycling industry between now and the rule's November 2026 comment deadline and August 2027 expiration date.