S. 429 — STRATEGIC Minerals Act

This section establishes definitions for terms used in the Act, including (1) appropriate congressional committees (i.e., Senate Committee on Finance and House Committee on Ways and Means); (2) country (i.e., any foreign country or territory, including overseas dependent territories or possessions and the Trust Territory of the Pacific Islands); (3) covered free trade agreement (i.e., an agreement exclusively focused on the critical minerals and rare earth elements sector that reduces trade barriers, includes enforceable provisions to prevent benefits to any foreign entity of concern, and is approved by Congress); (4) critical mineral (i.e., as defined in 30 U.S.C. 1606(a)); (5) foreign entity of concern (i.e., as defined in 42 U.S.C. 18741); (6) rare earth element (i.e., cerium, dysprosium, erbium, europium, gadolinium, holmium, lanthanum, lutetium, neodymium, praseodymium, promethium, samarium, scandium, terbium, thulium, ytterbium, or yttrium); and (7) Trade Representative (i.e., the United States Trade Representative).

This section directs the U.S. Trade Representative, in consultation with the Secretaries of State, Defense, Energy, and the Interior as appropriate, to provide the appropriate congressional committees with a classified briefing on the feasibility and advisability of pursuing and adopting covered free trade agreements, not later than 120 days after enactment of this Act. The briefing must include (1) an analysis of the most appropriate types of agreements (bilateral, plurilateral, or multilateral) for achieving the negotiating objectives in section 4(d), considering economic impact, strategic partnerships, negotiation feasibility, and national security implications; (2) recommendations for the type or types of agreements most needed to secure critical minerals and rare earth elements supply chains in alignment with U.S. national security and economic interests; and (3) an assessment of potential challenges and proposed solutions, including legal, regulatory, and geopolitical considerations.

This section authorizes the President, acting through the U.S. Trade Representative, to negotiate, enter into, and enforce covered free trade agreements determined to be in the national interest to enhance U.S. economic well-being, national security, and competitiveness in critical minerals and rare earth elements, provided the USTR first briefs specified congressional committees. It permits the President to proclaim modifications to duties or duty-free treatment as required to implement such agreements. The section specifies negotiating objectives, including (1) strengthening supply chains and reducing trade barriers for critical minerals and rare earth elements; (2) promoting sustainable practices, innovation, worker rights consistent with ILO standards, environmental and labor protections, small business access, ownership transparency, and health/safety interests; and (3) ensuring no required changes to U.S. laws unless expressly agreed, while considering pertinent objectives from the 2015 Trade Promotion Authority. It requires the President to consult with and provide at least 30 days' written notice to congressional committees before initiating negotiations or issuing proclamations, including negotiation targets, objectives, and impact assessments. The section allows the President to select negotiating partners and later add countries for accession, with trade benefits (e.g., tariff reductions) provided exclusively to agreement parties.

This section amends the definition of domestic source in the Defense Production Act of 1950 to include, subject to restrictions in new clause (iii), the territory of a party to a covered free trade agreement (as defined in sec. 2 of the Securing Trade and Resources for Advanced Technology, Economic Growth, and International Commerce in Minerals Act). The inclusion applies only for exercising authorities under DPA sec. 303(a)(1) (i.e., loans, purchases, and purchases commitments to expand domestic industrial base) relating to mineral activities for critical minerals or rare earth elements where supply in the United States and Canada is deficient, as determined by the Secretary of Defense consulting the Secretaries of the Interior and Energy based on domestic production levels, projected defense and infrastructure demand, foreign dependence (especially on foreign entities of concern), and supply chain disruption risks. Qualifying business concerns must ensure that minerals are processed, beneficiated, or recycled only by U.S.-organized entities with no more than 10% equity owned or controlled by a foreign entity of concern; that no extracted, processed, or transformed minerals or related revenues are sold or transferred to China or entities owned or controlled by a foreign entity of concern; and that no mine is owned, held, or controlled by a foreign entity of concern. (Thus, the provision enables limited use of allied territories' mineral resources for DPA Title III while barring adversary involvement.) The Secretary of Defense must issue compliance guidance, with violations triggering repayment of funds, disqualification from future assistance, civil penalties under DPA sec. 705, and potential criminal referral; the provision also defines related terms including beneficiation, control, critical mineral (per 30 U.S.C. 1606(a)), deficient supply, foreign entity of concern (per 42 U.S.C. 18741), mineral activities, processing, rare earth element, recycling, revenues, and sell or transfer.