critical minerals

Copper may be one of the earliest identified metals – there is evidence of Stone Age societies between 9000 BC to 2000 BC using it (without smelting) and it had its own archaeological period a long time ago — but its versatile properties make it one of the most sought-after materials even today, and perhaps more than ever.

Its conductivity makes it a key component of decarbonization and electrification technology ranging from solar power to hydro, thermal and wind energy, as well as energy storage and transportation.

The looming copper gap, to which ARPN called attention years ago, has prompted industry and academia to once more harness the materials science revolution providing advances in materials exploration and development, to join forces to identify sedimentary hosted copper deposits.  According to a newly-founded consortium of stakeholders led by the University of Western Australia’s Centre for Exploration Targeting (CET), these deposits offer a “promising and more sustainable alternative for meeting the increasing global demand for this energy transition critical mineral.”

According to mining.com, the deposits “account only for 20-25% of the world’s total copper production today and offer several advantages compared to non-sedimentary alternatives (…) being globally more widely distributed [and] present ESG opportunities by promoting economic distribution and reducing transport emissions.”

The sedimentary deposits are said to require less energy-intensive processing methods, and, as an added benefit in light of surging demand of battery critical materials against the backdrop of the green energy transition, sedimentary hosted copper deposits also contain significant amounts of cobalt.

The consortium, which also comprises the University of Warsaw, First Quantum Minerals, Teck Resources, BHP and Getech, a locator of subsurface resources, has launched a three-year Kupferschiefer project to create maps of promising areas within the Central European Basin using “proprietary gravity and magnetics data, as well as Globe earth model and spatial analytical expertise.” 

The materials science revolution appears to once more deliver, and the project is a promising endeavor with long-term prospects.  However, as followers of ARPN well know, the looming copper gap warrants immediate action.

The Financial Times predicted that copper’s growing application in this field will result “in it being dubbed the ‘metal of electrification’, with forecasts that it will double to a 50mn tonne market by 2035 compared with 2021 levels, according to S&P Global, which predicts a ‘chronic gap’ between supply and demand.”

U.S. import reliance for copper hovered around 30 to 35 percent in the 2010s, but in the 2020s, that number has gone up to more than 40 percent in the 2020s, according to the USGS Mineral Commodity Summaries. 

In addition to looking to turning to newly unlocked (courtesy of the materials science revolution) deposits the Wall Street Journal outlined earlier this fall that mining companies are also targeting “a new but also old source – closed mines, also known as brownfield sites.”  The Journal points to Sweden-based miner Bluelake Mineral, seeking to reopen a mine site in northern Norway that closed 25 years ago, as well as to Rio Tinto’s Resolution Copper project near Superior, Arizona.

As ARPN outlined earlier, the project is considered one of the most significant undeveloped copper deposits in the world and would reuse the historic Magma Mine which started production in 1910 and operated until 1996. While the project has strong support from the surrounding community, and began the permitting process in 1997, it is still awaiting permits to begin operation.

For all its uses and growing demand profile, copper incredulously has not (yet) been added to the overall U.S. government’s critical minerals list (though the Department of Energy recently designated the material a critical material as part of its 2023 Critical Materials Assessment).

However, with demand and geopolitical volatility surging, securing key mineral supply chains becomes more pertinent than ever, and stakeholders should look to embrace a multitude of opportunities – both traditional and new – to diversify away from our adversaries and unleash our domestic mineral potential where possible.

Only weeks before a planned November summit between Chinese President Xi Jinping and his U.S. counterpart, U.S. President Joe Biden, China’s commerce department has announced a new set of critical mineral export restrictions against what Nikkei Asia refers to as “a backdrop of domestic calls for a response to stricter limits on U.S. semiconductor exports to China.”

According to Nikkei, as part of the new restrictions, which will be in place until the end of October of 2025, the commerce department has added rare earths, including compounds and alloys to its “list of mineral resources and other items requiring disclosure of information such as material type and export destinations.”

The move ties into an overall context of export controls are gaining in popularity as the global race for resources heats up. India joined the ranks of countries considering export restrictions this August, and Kenya made similar headlines in October.  Zimbabwe banned lithium ore exports last December, and Namibia recently banned the export of unprocessed lithium and other critical minerals.

All these announcement tie into a larger trend, which has been noticeable particularly in Latin America, a region with a historic penchant for nationalism, but also elsewhere. ARPN has featured recent nationalist moves in Chile, Mexico and Bolivia, as well as in Myanmar, Indonesia, and China, and has showcased that even in the Western world, government involvement in the critical minerals sector is on the rise.

Of course, in light of Beijing’s dominating role in critical mineral supply chains and the current state of global affairs, China’s announcements relating to critical mineral export restrictions are not only highly consequential for U.S. domestic industry stakeholders, but must also be viewed through the prism of geopolitics, and as such U.S. national and economic security.

As Nikkei outlines, the U.S. has in recent years worked with Western allies to tighten exports of top-end semiconductors and chipmaking equipment to China, prompting Beijing to respond by considering banning “exports of manufacturing technology for high-performance magnets and other products that use rare earths” at the end of 2022.

Earlier this summer, China announced export restrictions on gallium and germanium, followed by controls on certain drones and drone-related equipment.  On October 20th, Beijing tightened the export control ratchet further – this time by announcing that to protect national security, the country require export permits for certain graphite products – a move analysts see as a play “to control supplies of critical minerals in response to challenges over its global manufacturing dominance.”

From a functional perspective, Chinese restrictions now extend to three of the key tech building blocs of the 21^st century:

-       Semiconductors (gallium/germanium)

-       Lithium-ion battery technology (graphite)

-       Permanent magnets (REEs)

As geopolitical tensions soar, this may not be the end of it. As ARPN stated before:

“As China ratchets up its export control regime (…) U.S. stakeholders would be well-advised to kick their efforts to bolster U.S. critical mineral supply chains into high gear.   For China – a ‘country of concern’ as per an August 9, 2023 Executive Order - it may be a short step from export controls to export embargoes.”

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