To modify procurement requirements relating to rare earth elements and strategic and critical materials by contractors of the Department of Defense, and for other purposes.

HR9917 modifies procurement requirements for the Department of Defense, mandating that contractors acquire rare earth elements and strategic and critical materials from domestic sources. This bill directly addresses supply chain vulnerabilities by requiring the DoD to favor U.S.-based production. This is happening now due to ongoing geopolitical tensions and a national security focus on securing critical material supply chains, especially given China's dominance in rare earth processing. The money trail for this legislation flows directly into U.S. rare earth mining, processing, and strategic material production. The DoD's procurement budget, which is substantial, will now be directed towards domestic suppliers for these specific materials. This creates a guaranteed demand floor for U.S. producers, positioning them to receive direct contracts and subcontracts from prime defense contractors. The mechanism is direct procurement, where the DoD will specify domestic sourcing requirements in its contracts. Historically, similar efforts to bolster domestic critical material production have shown positive market reactions. For instance, following Executive Order 13953 in September 2020, which declared a national emergency regarding the domestic supply chain for critical minerals, companies like MP Materials ($MP) saw significant investor interest, with its stock price increasing over 50% in the subsequent three months as the market anticipated increased domestic demand. This bill provides a legislative mandate, offering more long-term certainty than an executive order. Specific winners include U.S.-based rare earth miners and processors such as MP Materials ($MP), which operates the Mountain Pass mine. Companies involved in other strategic and critical materials, particularly those with U.S. operations, also stand to gain. This includes lithium producers like Albemarle ($ALB) and Lithium Americas ($LAC) for battery-grade materials, and Lynas Rare Earths which is developing a processing facility in the U.S. Losers are foreign suppliers who previously provided these materials to DoD contractors, as their market access for U.S. defense contracts will be significantly curtailed. The bill has been referred to the House Committee on Armed Services, and if passed, it will immediately alter DoD procurement practices.