BIS Imposes Critical Minerals Export Restrictions on Black Mass and Tungsten Waste and Scrap

Background

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) recently published a temporary final rule and request for public comments that effectively prohibits the export of black mass and tungsten waste and scrap without prior BIS authorization. The rule takes effect August 27, 2026, and expires one year later, although BIS may extend the effective time period beyond this date.

The rule follows a Presidential Determination issued July 30, 2026, finding that certain recoverable critical minerals and materials (CMMs) are scarce and critical materials essential to the national defense. BIS published the rule shortly thereafter, on August 6, 2026, implementing a Directive Allocation Order under Section 700.33 of the Defense Priorities and Allocations System (DPAS). 

What the Rule Requires

The rule applies to the following CMMs:

• black mass, defined as "any shredded lithium-ion battery scrap containing cathode material (lithium, cobalt, nickel, manganese), anode material (graphite, silicon), or other residual battery cell materials," which are classified under Schedule B codes 8549.13.00.00, 8549.14.00.00, 8549.19.00.00  
• tungsten waste and scrap classified under Schedule B code 8101.97.00.00

Beginning August 27, 2026, U.S. persons engaged in the sale of covered CMMs must allocate 100 percent of monthly sales to U.S. persons. Sales to non-U.S. persons are prohibited unless BIS grants an adjustment or exception, which may be company-specific or generally applicable. 

Adjustments and Exceptions

U.S. persons may request an adjustment or exception from BIS, and BIS may authorize "interim relief" through a temporary license while a request for an adjustment or exception request is pending. 

The rule lists the following as examples of circumstances under which an adjustment or exception may be granted: 

• 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 rule or the Defense Production Act – 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 U.S. for processing or refining, then the processed/refined material will be returned to the U.S. 
• 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.

The rule states that BIS will accept requests for adjustments or exceptions submitted on a rolling basis through August 27, 2027, and that BIS intends to respond to such requests within 14 days of receipt.

Request for Comments

Public comments on the rule are due November 4, 2026. BIS specifically requests comments on whether any additional sales requirements "are necessary or appropriate to promote the national defense," as well as comments on the framework of the temporary DPAS regulatory provisions issued under the rule. 

Key Takeaways

• Near-Term Compliance Required. The effective date, August 27, 2026, leaves little time to adjust existing contracts or seek advance authorization from BIS. Companies selling black mass or tungsten waste and scrap should audit current customer arrangements now and determine whether an adjustment or exception is worth pursuing. Companies not properly prepared for these restrictions may have their export shipments detained by U.S. Customs and Border Protection, which will assist BIS with enforcing the rule. The rule states that U.S. persons unable to comply fully with the rule should notify BIS immediately in writing, explain the extent to which compliance is possible and give the reasons why full compliance is not possible – but makes clear that such notification does not guarantee any relief. 
• BIS Appears Open to Granting Relief to Affected Companies. As noted above, the rule states that BIS will entertain exception and adjustment requests on an ongoing basis, including requests submitted before the rule becomes effective. The rule includes a non-exhaustive list of circumstances that could warrant an exception or adjustment, indicating that BIS will seek to avoid applying these export restrictions in a way that inadvertently reduces or interferes with the availability of domestic covered CMMs. 
• Restrictions May Be Modified. The text of the rule, coupled with its request for comments, suggests the potential for significant modifications to these restrictions in the future. With this in mind, companies with insight on how the restrictions may inadvertently reduce domestic supplies of the covered CMMs or otherwise harm U.S. economic or national security interests should consider submitting comments. 
• The Rule Could Be Followed by Additional CMM Export Restrictions. Given the broad concern about CMM supplies cited in the rule and other statements and actions by the Trump Administration, this rule could be followed by subsequent actions extending restrictions to additional CMMs. As such, companies dealing in both these covered CMMs or other CMMs should monitor for any regulatory developments and consider opportunities to inform BIS's approach through comments or other engagement.

For more information or questions, please contact the authors.