Reshoring industry: can strategic metals anchor supply sovereignty?

As the US and Europe encourage production to move closer to end markets, attention is turning upstream. Discover why control of critical raw materials – such as tungsten – should be part of economic autonomy plans, the obstacles to new extraction and the financing tools emerging to accelerate projects.

For the last few decades, supply chains were engineered for one goal: lowest cost, just in time. That logic cracked under a run of shocks – pandemic shutdowns, semiconductor shortages, sanctions, tariff volleys and shipping choke points. Executives have taken note. A recent Bain report reveals that leaders are now juggling more priorities than at any point in recent memory and reallocating capital from dividends toward resilience, visibility and agility – a tacit admission that the old system was built for a world that no longer exists.

Reshoring is the headline response: bring production closer to customers, sometimes all the way home, sometimes to regional “China + 1” hubs. An Oliver Wyman study finds 59% of NYSE-listed CEOs plan to de-risk supply chains within two years, and its analysis shows trade flows tilting toward Mexico, India and Turkey as firms rebalance exposure; yet only 16% plan full domestic reshoring. EY sees the same shift echoed in corporate real estate decisions, helped along by incentives; US manufacturing construction spend reached about $200bn by mid-2023, the highest in decades.

But new factories and fabrication plants raise an awkward question: is there assured raw material supply from diversified sources? Reshoring has focused on the visible end of the chain. The upstream inputs that make plants run – strategic metals and minerals – are often treated as someone else’s problem. As Almonty CEO Lewis Black puts it:

“You can’t really have reshoring and manufacturing without being able to feed it. You can build yourself the most magnificent semiconductor factory, for example, but without the raw materials to build those chips the operation is just a monumental white elephant.”

Tungsten’s test for heavy industry

Rare earths should have cured that blind spot. As the World Economic Forum notes, the US was once a dominant force in rare earth mining, until environmental issues and cheaper imports hollowed out domestic capacity. China now produces most rare earths and controls much of the processing into key components for motors and turbines. The lesson is not geological scarcity alone, but the loss of infrastructure and skills required to produce at scale.

Tungsten belongs in this same conversation. It’s not a household name, but it is embedded everywhere heavy industry matters: the cutting and drilling tools that machine aerospace parts and ship hulls; dense alloys for defense; and contacts and interconnects inside chips. Western consumption is robust; Western mine output is not. That dependency turns supply chains into chokepoints in a crisis.

If the intuitive answer is to bring mining and refining closer to home, realism is required.

“Firstly, you got to have the deposits,” Black says – and many Western ones are depleted, in disrepair or “in locations that can’t be mined.” Time is the next constraint: mining projects routinely run on decade-long clocks, far beyond a political cycle. Then comes permitting and politics. In parts of Europe, he says, projects are allowed to “die a slow and miserable death” as applications are neither approved nor denied: “You can actually mine in Europe… but the way that they’ve killed it is by never issuing an environmental permit.” He points to Spain and Portugal, where “neither country have issued any permits to build any new metal mine for years. The main hurdle in the West is, unfortunately, the ideology.”

Making projects bankable

Operationally, many mines are cleaner and more automated than the public imagines – “AI and automation are playing a bigger and bigger role,” says Black. But community opposition, ESG expectations and litigation risk raise costs and stretch timelines, which is why so much capacity migrated to jurisdictions with weaker standards. The moral trade-off is uncomfortable: importing “clean” finished goods that rely on opaque overseas mining may simply outsource impacts. A report in IndustryWeek captures another constraint: people. Hundreds of thousands of US manufacturing jobs are unfilled today, and millions could be by decade’s end without serious investment in apprenticeships and long-cycle training. Mining and processing need metallurgists, drillers and plant operators that many countries stopped training at scale.

Financing is a further hurdle. Black says that years of volatile pricing and expensive funding structures that skim future output, combined with double digit debt costs, have kept institutional money cautious. He adds that prices are often set by private assessments rather than open exchange trading, which makes revenue harder to underwrite.

Policy signals that matter

What, then, does a practical path look like? The first step is to finance upstream capacity without turning it into a ward of the state. Here, market mechanisms are more durable than grants. One approach is a long-term offtake, a contract in which a buyer commits to take a set volume at no less than an agreed floor price. The floor lets lenders model cash flow and debt service, while the buyer accepts some downside in return for assured supply and origin reporting. That model is now common in battery materials and is gathering pace in strategic metals precisely because it aligns incentives without requiring a permanent subsidy. It’s also consistent with the way executives are re-engineering networks, utilizing decentralized, asset-light production and logistics structures designed to flex with demand while meeting requirements to account for emissions in the supply chain.

Policy still matters. The EU’s Critical Raw Materials Act – benchmarks for mining inside the EU, processing and recycling, plus streamlined permits for strategic projects – is designed to turn policy aims into bankable projects. In the US, industrial policy has already pushed capital toward semiconductors and clean-tech manufacturing. Extending that clarity to strategic metals – through faster, predictable permitting and transparent pricing – would attract private capital rather than displace it. As Black points out, however, you cannot make a supply chain simultaneously 100% resilient, sustainable, responsive, traceable and cheapest. “Strategy now is about the compromises you are willing to own,” he says.

Few countries can produce every raw material. Working with allies to co-finance extraction and processing, secure long-term supply contracts and apply common standards is the fastest way to build depth. That’s the difference between a story about new factories and one that reduces dependence. Without that upstream depth, the investments now being announced risk standing idle at the first serious shock.