Big Tech Pivots to Minerals

No doubt, we are in a tense phase of geopolitical spotlighting…

Donald Trump, China, tariffs, Ukraine, Russia, embargoes, the break-up of NATO, Venezuela. The list goes on!

But it all seems to keep coming back to one common thread: Critical Minerals.

But as my colleague Lachlann Tierney points out, the tailwinds for investors haven’t begun yet. I’ll get to what that means in just a moment.

But back to critical minerals…

This group of obscure commodities has risen from the back of a geeky science textbook to the hottest thing across markets in recent months.

It has been the big-ticket item that has threaded together blockbuster geopolitical headlines this year.

Like when the US and Ukraine were discussing a minerals-for-military-aid deal that would hand Ukraine’s seemingly vast rare-earth reserves to the US economy.

Thus, solve America’s reliance on China for this critical group of commodities. In return, the US would hand Ukraine vast military aid.

As it turns out, an old US Geological Survey report showed that Ukraine doesn’t actually hold much of the rare earths.

Excitement waned, and the deal was put on ice. Ukraine’s vast supply of rare earths was far less than Trump or the media had imagined.

Nevertheless, it put another major spotlight on critical minerals.

As has China…

The world’s emerging superpower has flirted with its ability to ‘weaponise’ its dominance in global critical mineral processing.

And that reached an inflection point last April, after the Asian superpower hit back at US tariffs by imposing rare-earth export restrictions.

Clearly, the US is concerned.

And with the exception of oil, most raw materials haven’t been on America’s national security agenda for a long time.

But that’s changing rapidly.

America is the world’s most advanced, financially sophisticated economy.

But now it’s laser-focused on pivoting its economy into the dirty, low-margin business of mining.

And it’s starting from the Top

You see, ‘Big Tech’ is paying much closer attention to its vulnerable raw material supply chains.

Bezos and Gates have partnered with mining ventures, such as KoBold Metals, as they attempt to stamp their name on future mineral discoveries.

US vehicle manufacturers, such as Ford, Tesla, and General Motors, have taken an abrupt liking to signing direct mineral offtake agreements with mining developers.

Mining companies are now placing retired US Generals on their board of directors, now that the Department of Defence has become a major source of funding.

Meanwhile, the US government is pouring billions into upgrading the Lobito Corridor in Angola to secure access to Africa’s copper mines.

Plus, signing a historic $13 billion deal with Australia, aimed at bringing patches of dirt into operating mines.

The US is divided over many things…

But the need to secure mineral supply chains is one of the few examples of bipartisan unity. From Democrats and Republicans to high-level generals to market-moving tech entrepreneurs.

Minerals have become the key agenda for the USA.

Through decades of unencumbered supply, America has paid little attention to the ‘old-world economy’ of mineral extraction.

But that laissez-faire attitude is shifting.

US manufacturers are anxious… US politicians are keen to make deals.

Tech firms are investing directly in exploration and mining.

So, can investors join the ride?

No doubt, the US government has placed mineral supply as a key priority.

However, decades of mine closures, underinvestment in new mine developments, and offshoring of mineral processing ensure that the US will remain reliant for many years to come.

Despite the flood of investment capital, it will still take 15-20 years to turn a patch of dirt into a working mine.

Just ask Barrick, with their multi-decade attempt to get the copper-gold Reko Diq project into production…

Or Lynas and their prolonged attempt to build heavy and light-weight processing of rare earths from their Mt Weld mine.

This won’t come quickly or easily. And that’s where the opportunity sits for investors.

On that note, be sure to check out the latest presentation from my colleague Lachlann Tierney, who outlines the stocks poised to benefit as the US seeks to close the gap on China’s critical mineral advantage.

You can access his full presentation here.