Thompson Hine | New BIS Rule Restricts Export of Certain Critical Minerals

The Bureau of Industry and Security (“BIS”) has published a temporary final rule to restrict the export of black mass and tungsten waste and scrap without a license. The agency defines black mass as shredded lithium-ion battery scrap that contains cathode material, anode material or other “residual battery cell materials.” The BIS will restrict export of these critical minerals to address an “inadequate supply” of those items, which threatens national defense and security.

Beginning on August 27, 2026, U.S. persons engaged in the sale of black mass and tungsten waste and scrap must allocate 100 percent of sales to U.S. persons, unless a license is obtained in advance from BIS. The restrictions apply until August 27, 2027 unless revoked earlier.

The rule comes days after President Donald Trump granted the Department of Commerce authority under the Defense Production Act (“DPA”) to place new export restrictions on certain critical minerals and materials (“CMMs”), including rare earth magnets.

CMMs are critical to national security due to their military and industrial applications, yet the U.S. relies heavily on CMMs imports from foreign countries, which threaten domestic critical mineral supply chains.  The agency says that the rule is “necessary to immediately secure the supply of certain recoverable CMMs to ensure an adequate supply of these materials.”

Persons seeking an adjustment or exception shall submit a request to BIS in accordance with the procedures outlined in Supplement No. 1 to Part 700(c), including:

1. a complete statement of all the facts and circumstances related to the domestic sales requirement from which relief is sought,
2. a full and precise statement of the reasons why relief should be provided, and
3. relevant supporting documents or data to support the request.

BIS has indicated that it will consider granting an adjustment, exception or interim relief in the following, non-exhaustive, list of scenarios:

• The domestic sales requirement results in an undue or exceptional hardship on that person not suffered generally by others in similar situations and circumstances.
• The consequence of complying with the domestic sales requirement is contrary to the intent of the DPA or this part—for example, because it would reduce the domestic supply of CMMs.
• A U.S. person plans to sell black mass and tungsten waste and scrap to a person located outside the United States for processing or refining, and then the processed/refined material will be returned to the United States.
• Compliance with the domestic sales requirement will result in irreparable harm to a U.S. person who is subject to the order.
• Additional time is needed to comply with the domestic sales requirements.

Requests for adjustments and exceptions must be made in writing and provided to BIS via email at DPASAllocations@bis.doc.gov. Interim relief (a DPAS temporary license) may be issued while a request is pending.

Compliments of Thompson Hine – a member of the EACCNY