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To support innovation, the United States and its allies should take steps in three areas: international policy collaboration, private-sector collaboration, and international funding sector coordination.

To collaborate on international policy, the United States and its allies should:

To improve private-sector collaboration, the United States and its allies should:

To coordinate international funding mechanisms, the United States and its allies should:

The United States will not secure its critical mineral future through traditional mining and processing alone. While expanding extraction and refining capacity is necessary, it is insufficient to overcome China’s structural advantages in technology, cost, and scale. The area in which the United States can most credibly compete, and potentially overcome its disadvantage, is innovation. The most promising way to leapfrog China’s entrenched position is for the U.S. government to maximize breakthrough materials engineering, advanced extraction and processing technologies, waste recovery, and recycling. Those innovations are already emerging across the private sector, National Labs, universities, and early-stage companies, driven in part by heightened policy attention to national and economic security. Yet innovation in this sector is uniquely fragile. Even technically successful companies can fail not because their technologies do not work, but because they slide into one of several persistent valleys of death that interrupt progress between the stages of discovery, pilot, and commercial scale.

Closing those valleys of death requires a stronger domestic funding ecosystem, reformed policies, and deeper allied coordination. Private capital alone cannot reliably bridge the multiple gaps facing frontier mineral technologies, particularly when timelines are long, the risks are greater, and returns depend on system-wide adoption rather than firm-level success. Government support is therefore not a substitute for markets but a necessary catalyst to spur private investment, reduce risk, and shorten scaling timelines.

At the same time, the United States should not innovate in isolation. While the United States brings comparative strengths in R&D, entrepreneurship, and capital formation, many U.S. allies have greater expertise in mining, processing, and industrial scaling. The United States needs a coordinated policy and financing architecture that treats innovation not as an afterthought but as the primary means by which it and its allies can leapfrog China in critical minerals—and secure the material foundations of economic and strategic strength.

Technology Valley of Death: Between early scientific discovery and a reliable, engineered process capable of producing materials at quality and scale. Many breakthrough concepts emerge from universities or National Labs, yet few transition into robust pilot systems. Government grants typically fund this stage.

Pilot-Scale and Validation Valley of Death: Once a technology is proven for potential commercialization, scientists and entrepreneurs face a second gap: financing and operating a pilot or demonstration. This stage is where most mineral innovations fail. Pilot facilities are capital intensive, technically risky, and too small to generate revenue. Yet without a pilot plant, technologies cannot produce the data required for customer qualification, engineering validation, or eventual bankability. Following the pilot, customer qualification and engineering validation are costly and time consuming, but necessary to prove the technology works.

Commercialization Valley of Death: Once a technology works and is validated, the company needs to attract enough seed or Series A capital to build the first commercial facility. This is the most acute bottleneck in the mineral supply chain. Investors often demand evidence that cannot be generated without a commercial facility, creating a catch-22.

Profitability Valley of Death: Even after a first commercial plant is built, a final gap remains: achieving cost-competitive, sustained profitability, especially in the face of cyclical minerals markets that are dominated by incumbents with massive scale and often influenced by China’s subsidized pricing. New producers face years of price volatility, qualification requirements with customers, ramp-up inefficiencies, and competition from artificially low-cost Chinese production. Many firms reach commercial output only to struggle with margins that cannot support continuing operations or expansion or attract follow-on investment.

We are grateful for the thoughtful comments of Council on Foreign Relations (CFR) President Mike Froman, Senior Vice President and Director of Studies Shannon O’Neil, and Associate Vice President of Studies Stuart Reid. For their insights over six sessions from June 2025 to December 2025, we are indebted to the members of the CFR/Silverado Study Group on Strategic Leapfrogging Through the Critical Minerals Crisis. We benefited immensely from insightful presentations and enthusiastic interventions by study group members, which included a cross section of bipartisan policymakers, scientists and national labs, investors, early-to-growth stage companies, and industry leaders focused on actionable strategies the United States should pursue to quickly advance new generations of technology that could change the critical minerals chessboard entirely. It was a privilege to convene with such an engaged, mission-driven cohort.

For full disclosure, this report includes a number of references to companies whose representatives were in the study group—including the three case studies. Those companies are Alta Resources Technologies, Element3, Glencore, In-Q-Tel, Lilac Solutions, MP Materials, Niron Magnetics, Orion Industrial Ventures, Phoenix Tailings, ReElement Technologies, Rio Tinto, TechMet, and Vulcan Elements. These references were intended to provide illustrative examples supporting our analysis and recommendations. But the companies and their representatives had no editorial control over the report in general or the passages mentioning them in specific. Nor did they provide financial support; CFR does not accept funding from corporations for individual research projects.

Our special thanks to CFR research associates A.J. Dilts, Turner Ruggi, and Michael Weilandt for their exceptional research support and seamless administrative coordination, and to Patricia Dorff and Caitlin Moran for their guidance and editorial contributions.

Our special thanks to Silverado Policy Accelerator CEO Sarah Stewart; Senior Policy Analyst David Kelm; and Vice President of Research and Analysis Andrew David.

Heidi Crebo-Rediker is a senior fellow for geoeconomics at the Council on Foreign Relations, specializing in economic security, economic competitiveness, and international finance. She directs CFR’s Roundtable Series on Global Political Economy. Previously, Crebo-Rediker served in the Obama administration as the State Department’s first chief economist. She provided strategic advice to two secretaries of state on the integration of economics and finance with geopolitics to help craft and launch “economic statecraft” in the Obama administration. Before this, she served as the chief of international finance and economics for the Senate Committee on Foreign Relations. Over her previous, nearly two-decade investment banking career based in Europe as a managing director at several investment banks, she managed businesses including sovereign and public-sector banking, European debt capital markets, emerging markets debt capital markets, and corporate finance. Her areas of industry focus were energy and mining, financial services, and telecommunications. She began her career in energy merchant banking and investing in Russia/CIS. Crebo-Rediker holds a BA from Dartmouth College and MSc from the London School of Economics.

Mahnaz Khan is vice president of policy for critical supply chains at Silverado Policy Accelerator, where she leads the organization’s critical minerals portfolio. Her work focuses on developing innovative trade policy strategies and analyzing the geopolitical and economic security dimensions of critical mineral supply chains. Prior to joining Silverado in 2024, Khan spent fourteen years as a career civil servant in U.S. trade policy, serving at the Office of the U.S. Trade Representative, the U.S. International Trade Commission, and the Department of Commerce. She also serves as a nonresident senior fellow at the Atlantic Council’s GeoTech Center. She holds a BS in business administration from Boston University and a JD from Chicago-Kent College of Law.t