RK Equity Releases Policy White Paper Proposing a USA Strategic Lithium Reserve

A Market-Based Mechanism to Stabilize Lithium Prices, Counter China’s Oversupply, and Enable Western Supply Chain Investment

NEW YORK, Dec. 08, 2025 (GLOBE NEWSWIRE) -- RK Equity today released a new policy white paper titled “The USA Strategic Lithium Reserve: Stabilizing Price Volatility from China-Dominated Oversupply.” The report outlines a practical, rapidly deployable mechanism the United States can use to counter extreme lithium price volatility and reduce dependence on Chinese chemical conversion.

The paper argues that a U.S. Strategic Lithium Reserve (SLR)—modeled on the Strategic Petroleum Reserve—could provide the price stability needed for private capital to finance new lithium mining and conversion projects across the Western Hemisphere.

A Market-Based Alternative to Subsidies and Price Floors

Lithium prices have swung 10–15× in recent cycles—far beyond what most long-term capital can withstand. Much of this volatility stems from China’s dominance of lithium chemical conversion, where oversupply and subsidized lepidolite production exert sustained downward pressure on global prices. The result: U.S., Canadian, and allied projects struggle to reach Final Investment Decision (FID) even when resource quality and management execution are strong.

“A Strategic Lithium Reserve is the simplest, fairest, and fastest policy tool available,” said Howard Klein, Founder of RK Equity.
“It doesn’t pick technologies or subsidize risky projects. It neutralizes volatility so private capital can back the best projects.”

How the SLR Works

The SLR would operate as a rules-based reserve of lithium carbonate, purchasing material when prices fall below incentive levels—typically around $20,000–25,000 per tonne—and releasing it during extreme price spikes, supply disruptions, or export restrictions.

Establishing a 170,000-tonne reserve today would cost approximately $3.4–4.25 billion. A fully built-out 300,000-tonnereserve by 2030 would cost $6.0–7.5 billion. These sums are modest compared to existing U.S. industrial policy initiatives such as:

• DOE Loan Programs Office: >$100B
• Inflation Reduction Act clean energy incentives: >$400B
• CHIPS Act: ~$50B
  
  

Immediate Strategic Impact

The white paper highlights that the Americas—particularly Chile and Argentina—are already the largest non-China producers of lithium carbonate. Redirecting a portion of these flows away from China and toward a U.S. reserve would provide immediate strategic supply security.

“Unlike permitting a new mine or building a U.S. refinery, which takes years, the SLR can begin stabilizing the market within months,” Klein added.
“It is the lithium-age analogue to the SPR.”

Complementary Industrial Strategy

In addition to the SLR, the paper recommends:

• Continued use of the 45X Production Tax Credit, a broad-based, non-distortive incentive
• Targeted LPO, EXIM Bank, or Department of the Navy’s Office of Strategic Capital (OSC) support for nationally significant, long-lived strategic projects
• Limited, performance-linked incentives for companies with demonstrated ability to build and operate large-scale conversion capacity
  
  

The white paper also presents a three-phase implementation roadmap, beginning with authorization and early purchases, followed by hemispheric project alignment, and culminating in a fully operational SLR capable of dampening market extremes across cycles.

About RK Equity

RK Equity is a leading advisory firm specializing in lithium and critical minerals capital markets, with a 23-year track record advising public and private companies, institutional investors, and policymakers. RK Equity publishes the widely followed Lithium-Ion Bull newsletter, and its founder Howard Klein co-hosts the Rock Stock Channel, a leading YouTube program covering battery materials markets and equities.

Download the Full White Paper

The full report is available at:
https://blog.rkequity.com/2025/12/08/strategic-lithium-reserve/

Media Contact:
Howard Klein
Founder, RK Equity
Email: hklein@rkequity.com
X: @LithiumIonBull
Website: www.rkequity.com