Why Israel Matters in the Critical Minerals Race
Since President Trump took office, securing reliable access to critical minerals has been elevated as a core pillar of U.S. foreign policy and national security strategy. Critical minerals are the essential raw inputs used across every sector of the economy and underpin a wide range of strategic technologies – from semiconductors and solar panels to advanced defense systems and AI chips.
Decades ago, Chinese leader Deng Xiaoping famously said, “The Middle East has oil, China has rare earths.” Over the past three decades, China has built overwhelming dominance in the mining and processing of critical minerals, creating a major chokepoint for the United States. That vulnerability was underscored earlier this year when, amid renewed U.S.-China trade tensions, Beijing imposed export controls on rare earth elements – materials indispensable to advanced manufacturing, defense systems, and AI-enabled technologies.
That is why just about every meeting that President Trump has with a foreign counterpart is accompanied by an agreement or commitment to partner on critical minerals. The U.S. has moved quickly to secure agreements with countries including Ukraine, Democratic Republic of Congo, Saudi Arabia, Kazakhstan, Australia, Japan, with what one State Department official said were “a dozen more in the hopper.” What these countries share is either significant domestic reserves of critical minerals, the capacity to process them, or are allied technology manufacturers.
Against this backdrop, Israel’s inclusion in a new U.S.-led initiative known as Pax Silica is a big deal. Israel is neither a major source nor processor of critical minerals, yet it was invited to join a small group of allied countries—including Australia, Japan, the UK, South Korea, Singapore, the UAE, and the Netherlands—focused on securing technology supply chains spanning energy, critical minerals, advanced manufacturing, and computing.
“Pax Silica countries are really meant to be countries that make significant material contributions to the AI supply chain and are fundamentally aligned with the United States on broader geopolitical issues,” said U.S. Undersecretary of State for Economic Affairs Jacob Helberg. A key criterion, he added, is whether a country has companies that can be meaningful partners in securing those supply chains.
As competition over critical minerals grows, the challenge for the United States is not only securing access to raw materials. It is also determining how those materials are turned into trusted technology. I saw this firsthand last month in Israel, traveling with a delegation led by the Special Competitive Studies Project, which together with MIND Israel, is working to advance policy ideas that place technology at the center of next-generation U.S.-Israel cooperation. Meeting with startups, investors, and researchers offered a clear picture of how Israel contributes to the critical minerals challenge and highlighted the potential for deeper U.S.-Israel cooperation in this area.
Israeli innovation is increasingly focused on making scarce inputs go further. Israeli companies and researchers are pioneers in materials science, battery architecture, and manufacturing processes that reduce waste and improve performance. One company we visited, Addionics, is redesigning battery components to improve efficiency and power without increasing reliance on constrained mineral inputs. In a world of scarcity and chokepoints, these kinds of gains can help ease pressure on critical mineral supply chains.
Israel also plays an important role at the point in the value chain where mineral inputs are turned into semiconductors and advanced computing systems. Israel has long been a global center for chip architecture, design, and systems-level optimization – the node in the value chain where decisions are made that determine how much material input is required, how efficiently they are used, and how best to stretch scarce resources. The long-standing presence of global chip makers such as Intel and NVIDIA, alongside the presence of most (if not all) of U.S. tech giants that use Israel as a core R&D base, reflects the country’s importance in this segment of the value chain. This work sits several steps removed from extraction and processing, but plays an outsized role in determining how efficiently mineral inputs are ultimately used across advanced technology systems.
Beyond semiconductors, it’s clear that there is no shortage of Israeli startups whose technologies will be central to the technology supply chains of the future, including AI for energy and industrial optimization, cybersecurity solutions to protect globally distributed networks, and emerging quantum computing capabilities.
What’s under-developed, however, is a clear U.S.-Israeli strategy to leverage these strengths. While U.S. policy has focused heavily on securing upstream access to raw materials, far less attention has been paid to how allied innovation ecosystems can reduce dependence on scarce inputs, improve efficiency, and ensure that minerals ultimately feed into trusted, secure technologies. Pax Silica offers a promising framework to help fill that gap, creating an opening for companies, research institutions, and investors in both countries to collaborate more systematically across the AI value chain. As the critical minerals race accelerates, the countries that matter most will not only be those that control resources, but also those that know how to make limited resources count. Israel has much to offer the United States and our allies in that regard. http://gty.im/2252027844
