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The One Big Beautiful Bill Act introduces an influx of investment and development challenges for the critical minerals and rare earth mining industry 

In recent years, demand for critical minerals, including lithium, cobalt, nickel, and rare earth elements, has surged amid the global shift toward electrification, advanced manufacturing, and renewable energy. In response to geopolitical concerns and supply chain vulnerabilities, the U.S. has enacted sweeping legislative reforms to bolster domestic mining initiatives. Provisions in , the One Big Beautiful Bill Act (OBBBA), represent the latest shift in federal policy, offering billions in federal funding and modified financial incentives designed to restrict access to Chinese companies and bolster national mineral security.

Meanwhile, high-profile private sector deals — such as and with the same company — underscore a broad push for reshoring of U.S. minerals mining. 

How is the regulatory landscape for critical minerals mining changing? 

OBBBA, signed into law July 4:

• Appropriates $7.5 billion to the Department of Defense for critical minerals projects.
• Eliminates the Section 45X Production Tax Credit phaseout exemption introduced in 2022's . Critical minerals produced in 2031 will be eligible for 75% of the credit, with this percentage lowered annually until the credit is eliminated for critical minerals produced after 2034.
• Provides a more restrictive definition of Foreign Entities of Concern (FEOC), expanding the scope of companies disqualified from receiving benefits. Combining the Specified Foreign Entities (SFEs) category with one known as Foreign-Influenced Entities (FIEs), OBBBA creates a new grouping called Prohibited Foreign Entities (PFEs), barred from 45X credits beginning in 2026.

Paired with critical minerals mining permitting reform initiatives embedded in 2023's , OBBBA's provisions have the potential to further accelerate critical minerals exploration and extraction projects and timelines in the U.S. and globally, for companies not barred as PFEs, while the 45X phaseout schedule may disincentivize investment in greenfield critical minerals mining projects with longer developmental timelines. 

What's next for U.S. critical minerals mining stakeholders?

The global market for critical minerals continues to evolve rapidly. In the U.S., the Federal Permitting Council recently added ten domestic mines and mining projects to the to expedite the permitting process. For mining organizations, the combination of expedited permitting, financial incentives, an influx of investment from the U.S. federal government, and high-profile public-private partnerships represents both opportunities and challenges. Success in this environment will require:

• Up-to-date knowledge of legislative and policy developments under OBBBA
• Strategic engagement with the U.S. federal government to drive and fund projects that both extract and process critical minerals and rare earth minerals
• Proactive engagement with federal and state regulators
• Comprehensive environmental risk management frameworks

Despite U.S. federal investment initiatives, mining organizations continue to navigate a complex web of environmental compliance obligations and potential areas of environmental and human health liability. Maintaining robust monitoring, reporting, and mitigation plans representing best practices throughout the project lifecycle and performing rigorous environmental impact assessments can help address potential impacts from extraction and processing activities on water quality and biodiversity in mining-affected regions.

As legislative frameworks and specific implementations of those frameworks continue to take shape, organizations that can unlock domestic growth opportunities for critical minerals and rare earth element mining while mitigating potential impacts on sensitive habitats and water resources are likely to maintain a competitive edge.