The definition of “critical minerals” has become a pivotal issue in 2025, determining not only which mining projects receive expedited federal permitting and funding, but also which deposits gain protection from incompatible development under California law. As the federal government races to secure domestic supply chains through accelerated approvals, California is charting its own course—crafting a definition that balances national security priorities with the state’s clean energy transition and land use planning framework. The outcome of these parallel efforts will directly shape project timelines, regulatory pathways, and investment decisions for years to come.
Federal Classification: Opening Doors to Expedited Permitting and Funding
At the federal level, inclusion on the U.S. Department of the Interior’s critical minerals list triggers concrete benefits. The August 2025 draft update added copper, potash, silver, lead, rhenium, and silicon while removing arsenic and tellurium—changes that will determine which projects qualify for expedited permitting procedures, federal loan guarantees, and Defense Production Act funding.
The practical impact is already visible through DOI’s emergency permitting procedures, introduced in April 2025 to compress review timelines to as little as 28 days for critical mineral projects. In May 2025, DOI expedited environmental review for the Velvet-Wood Mine, demonstrating how critical minerals designation can accelerate project approvals. Separately, the Federal Permitting Council has added multiple critical mineral projects to the FAST-41 process, including lithium, rare earth, and graphite projects, providing enhanced transparency and interagency coordination.
California’s Parallel Effort: Crafting a State-Specific Definition
While the federal government focuses on speed and supply chain security, California is taking a more deliberate approach through its State Mining and Geology Board (SMGB). At the September 18, 2025 Critical Minerals Committee meeting, where the committee voted to initiate pre-rulemaking for the definition of “critical mineral,” staff presented a draft definition that adapts federal language to California’s unique context:
“Critical mineral” means a non-fuel mineral or mineral material that is vital to the economic security and energy transition interests of the State of California, and is vulnerable to supply chain disruption, or serves an essential function in the manufacturing of a domestic product. Such a mineral may also be on current lists of critical minerals or materials designated by the federal government.
This proposed definition is significant for what it leaves flexible. By emphasizing “economic security and energy transition interests of the State of California,” the definition creates space for California to prioritize minerals essential to its carbon neutrality and zero-emission vehicle mandates, even if those minerals don’t align perfectly with federal priorities. The phrase “may also be on current lists” suggests California could recognize minerals not on the federal USGS list, or decline to prioritize federally-listed minerals that aren’t critical to California’s needs.
SMGB staff emphasized that formal recognition is overdue, given the growing importance of critical minerals for California’s clean energy transition, noting that shortages could lead to inflated prices and hinder decarbonization efforts. However, public comment cautioned against simply adopting the USGS list, which can be influenced by political factors and may include minerals (like gold) that are not truly critical to the state’s needs.
Why MRZ Classification Matters
California’s critical minerals definition may directly impact which deposits receive Mineral Resource Zone (MRZ) classification under SMARA—and that classification carries significant legal weight. Under SMARA, the State Geologist classifies lands into MRZ categories based on geologic and economic factors. Areas classified as MRZ-2 contain identified mineral resources of regional or statewide significance.
Once an area is classified as MRZ-2 (and potentially designated) by the SMGB, local lead agencies—typically counties and cities—face mandatory obligations. For example, within one year, they must establish mineral resource management policies in their general plans. For areas of statewide significance, agencies must consider the importance of the mineral resources to the state and nation as a whole.
This creates a legal safeguards against incompatible development. A critical minerals deposit that receives MRZ-2 classification and SMGB designation gains regulatory protection that can influence local planning and development that could otherwise sterilize the resource. Conversely, deposits that don’t receive this classification may lack such protection, regardless of their strategic importance.
The SMARA Integration Challenge
California’s challenge is integrating the new critical minerals definition into SMARA’s existing framework, which currently does not define “critical minerals.” Current regulations define “significance” in deposits based on 50-year marketability and minimum threshold values. SMGB staff noted that incorporating a critical minerals list would affect how significance is determined, particularly since assessing threshold values for critical minerals is complex due to limited available data and proprietary concerns.
The Bottom Line
For industry, the stakes are real. A formal critical minerals definition will determine which deposits receive MRZ classification and the regulatory protections that come with it. Projects involving minerals recognized by both California and federal definitions could benefit from expedited federal permitting and state-level land use protections. But projects involving minerals deemed critical by only one jurisdiction may face misaligned incentives—qualifying for federal benefits without state protection, or vice versa.