Exploiting the Critical Minerals Panic

Nothing like a little fear to drive a new bubble

The chest thumping and table pounding among the current administration’s push to incentivize critical minerals mining in the US is nothing short of a bull market catalyst for a select subset of companies.

There are some inherent problems with lumping copper and nickel into the same category as gallium, rhodium or neodymium. Copper and nickel are generally far more abundant than any of the rare earth elements (REEs), with much simpler refinement requirements (generally).

There are an abundance (relatively speaking) of copper and nickel deposits ripe for exploitation in the United States; much less so REEs. The criticality of each element, and its presence on the list of Critical Elements published by the US geological survey, is derived from its domestic production versus its industrial domestic consumption.

In a perfect world (for the US), there would be sufficient domestic supply of all minerals to equal or exceed slightly the annual domestic industrial consumption.

The world is far from perfect, and of the 120k tonnes of nickel consumed annually in the US, only 17,000 are sourced from a single mine in the United States, while of the1.8 million tonnes of cooper consumed annually in the US, roughly 1.1 million tonnes are produced domestically.

So the criticality of what we shall term “industrial minerals” is far less than certain REEs, for which there is scant US production, massively scaling demand, and low alternative supplies from allied countries.

China controls 90% of the world’s REEs production, and so the US is particularly vulnerable to trade curtailments by China, as was seen with the Trump administration’s failed tariff strategy.

For this reason, REE’s are of far greater importance in the immediate sense than are the industrial metals, which can be sourced by the US from allied countries, for the time being. Though this is contingent on a full retreat from the punitive tariff mentality currently dominating US policy.

So let’s look at what companies are doing in the US around REE supply.

The criteria for maximum interest are: 1) Must be in the United States proper; 2) Must be big; 3) Must be relatively advanced i.e. no greenfields.

The fourth criteria which is not mandatory is that a company have exposure to more than one specific mineral.

Here now in order of opportunity size are the companies developing REEs in the US: