Trump and China go head to head on critical minerals, implications for our Investments
First the breaking news:
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Rapid fire summary:
- Trump invokes the Defence Production Act and declares a national emergency - saying inadequate U.S. energy infrastructure and high energy prices threaten national security and economic stability.
- Federal agencies are directed to use emergency authorities to accelerate domestic energy production, infrastructure development, and fuel supply.
- Reports by a number of agencies must be filed within 60 days detailing vulnerabilities in the energy and critical minerals supply chain, and appropriate remedies.
We think Trump’s Executive Order might prove to be the major macro catalyst the critical minerals industry needed to finally unleash a wave of capital to the cash starved industry.
(And hopefully this wave of capital filters through to our Investments - keep reading to find out which ones we think stand to benefit the most)
This wasn’t the only headline to come out in the last 48 hours.
First was this headline from Bloomberg:
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Key points here:
- President Trump invoked emergency powers to boost domestic critical mineral production and reduce reliance on foreign imports.
- The executive order leverages the Defense Production Act to finance mineral projects and expedite permitting on federal land.
- The move responds to concerns over China’s control of critical minerals and rare earth processing and aims to strengthen the US supply chain.
Here’s the key quote from that Bloomberg article:
“[the order is] part of an effort to provide financing, loans and other investment support to domestically process critical minerals and rare earth elements, according to a White House official. The US International Development Finance Corporation, working with the Department of Defense, will provide financing for new mineral production projects.”
We think that means tangible capital investments from the US federal government WILL happen.
Perhaps aware that something like this was coming from Trump, China has already moved to further ramp up its critical minerals push:
(Source)
The key points:
- China is ramping up state support for domestic mineral exploration - the Chinese government has devoted more than Rmb100bn ($13.8bn) to investment in geological exploration annually since 2022, the highest three-year period in a decade.
- Provincial governments are increasing subsidies and access for exploration
- Beijing’s control over mineral supply chains remains a key geopolitical tool, with the advent of recently tightened export controls on strategic resources.
And a key chart here showing where China is allocating the most funds (the ones that stood out most for us highlighted):
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Gold and silver are the hot commodities of the moment, but it's interesting to see nickel and particularly copper getting some monetary backing from the Chinese government.
This week we also saw the copper price effectively go vertical as Trump mulls a 25% tariff on the metal:
(Source)
The pieces on the board are definitely moving now…
In a recent weekend note we discussed Trump’s desire to “bring back mining to the United States”...
Concessions for “critical minerals” are seen as a key bargaining chip in the ongoing negotiations for peace in Ukraine.
He has placed 25% tariffs on commodities like steel and aluminium (which applies to every importing country, even Australia), which will have a strong effect on the supply chains for bulk commodities.
Greenland is “on the table”, with the new US administration making overtures in order to access potentially huge deposits on the large island.
Trump has even talked about “taking over” Canada to access its raw materials…
These major moves by the US we think will have some big implications for the critical minerals industry where we have a number of Investments.
The first company we thought of when this news broke was our Investment Global Uranium and Enrichment (ASX: GUE).
Here’s the rundown on GUE:
What GUE does: GUE has a ~52Mlb uranium deposit in Colorado, USA and recently acquired a project in Wyoming which could be just as big if exploration goes well. It also has an investment in a unique uranium enrichment company which could be of strategic importance to Western countries like the US.
What’s next: The uranium enrichment company which GUE has a stake in is currently seeking a strategic partner before the midway point of this year.
Why it could benefit from US critical minerals push: It doesn’t get much more strategic and critical than a potentially breakthrough uranium enrichment technology.
Domestic US uranium production from deposits like the ones GUE has should thrive too.
US President Donald Trump’s close connections with the tech industry have been well documented, and these tech players have been allocating significant resources to securing nuclear power for their AI data centres.
That means more uranium over the long run we think.
Read more:
Below is a list of our other Investments that we think could stand to benefit from Trump’s Executive Order:
Our other US based Investments
Sun Silver (ASX: SS1)
What SS1 does: Huge silver project in Nevada USA
What’s next: Resource upgrade, new drilling campaign (next few weeks)
Why it could benefit from US critical minerals push: SS1 could have a large amount of antimony on its project in Nevada, antimony is used in many defence applications and has recently been the subject of Chinese export controls.
~US$1BN capped Perpetua Resources has received significant US Department of Defence capital support for its gold-antimony project - SS1 may be able to attract funding like this if it proves up a significant amount of antimony on the project.
Read more: SS1 just weeks away from more silver drilling, resource upgrade very soon
Gti Energy (ASX: GTR)
What GTR does: Uranium exploration and development in Wyoming - across its three projects GTR has a 10.23m lb uranium JORC resource.
What’s next: Scoping study (Q2 2025)
Why it could benefit from US critical minerals push: Domestic US uranium production in the heartland of US uranium - Wyoming.
Read more: GTR’s scoping study on track for Q2 2025
James Bay Minerals (ASX: JBY)
What JBY does: Gold exploration and resource definition in Nevada, USA.
What’s next: Drilling (imminent)
Why it could benefit from US critical minerals push: The tariffs and trade friction associated with the US government’s critical minerals push may have flow on effects to inflation and investor appetite for gold.
Pantera Minerals (ASX: PFE)
What PFE does: Lithium brine exploration and development in the USA’s lithium heartland - Arkansas.
What’s next: Updated well locations
Why it could benefit from US critical minerals push: US lithium could become very important in Trump’s America - his buddy Elon Musk could sure use it for his Tesla’s. And did we mention that Trump’s former press secretary Sarah Huckabee-Sanders is the governor of Arkansas? Arkansas has made building a lithium industry a major priority for the state.
Read more: PFE - $353M Standard Lithium & $105BN Equinor hit major milestone in the Smackover, USA
Mandrake Resources (ASX: MAN)
What MAN does: Large lithium brine project in Utah with a JORC resource, may move into precious and base metals
What’s next: Assessing options in a down lithium market and may deploy a portion of its large cash holdings ($13.5M cash in the bank at 31 Dec 2024) to acquire a new project
Why it could benefit from US critical minerals push: We know lithium is a tough market right now but US lithium market dynamics could change quickly. In the meantime, the MAN team has strong experience in the US and a new precious or base metals project could be well received by the market.
Read more: MAN - reviewing “precious and base metals” opportunities
