Oil is Out, Critical Earth Metals are In

Image via Opla/Getty Images

***

On Wednesday, February 4th, the Secretary of State Marco Rubio hosted the Critical Minerals Ministerial, an event aimed at “…advance[ing] collective efforts to strengthen and diversify[ing] critical minerals supply chains.” The event was attended by over 50 countries, including many countries within the EU, Australia, New Zealand, South Korea, Japan, Thailand, the Democratic Republic of Congo (DRC), and others. Argentina signed a separate deal the same day. 

Secretary Rubio stated that one of the primary goals of the conference is to safeguard countries and manufacturing from limited sourcing of materials building a durable and resilient critical metal supply chain. Other causes discussed for the conference was to counter Chinese influence in the critical metal supply chain. Which is part of a larger administration goal of increasing demand and stability of such materials. While also encouraging more domestic manufacturing. With President Donald Trump having announced the Critical Metals Stockpile called “Project Vault” the day before. Members of the administration such as J.D Vance also maintained the idea that a price floor on critical metals would additionally be implemented to reduce investor risk, especially for smaller competitors. 

China is estimated to produce up to 60% of such metals and processes 90% of them. Many of these metals are essential to technological components such as semiconductors, batteries, wiring, and military hardware. Demands for such materials have also increased due to the increasing demand for AI, the growth of green infrastructure, and new military rearmament. 

Such concerns were starting to be realized when China restricted rare earth metals to the U.S. in response to President Trump’s 100% tariffs and the stock market falling 2%. Which has led to increased friction between the United States and China. But over the last year, the U.S. has been increasing strategic alliances for rare earth metals from countries such as Australia, Ukraine, DRC, and Pakistan in exchange for investment or security guarantees. 

Such talks have grown increasingly strained from President Trump’s calls to take over Greenland and previously threatened military force to claim it. Denmark did not send a delegation to the Ministerial. Although Trump claimed that such mining rights in Greenland were part of a framework deal with the country. The rush for Greenland has been spurred by its largely untapped mineral supply due to the country’s harsh climate. With many deposits already having been found. Although the practicality of extracting such metals from beneath thick layers of ice has led some to question the feasibility of such operations. 

Rare Earth Mineral Site near Narsarsuaq, Greenland, Photo Via Carsten Snejbjerg/Bloomberg/Getty Images

***

A few days before the Ministerial President Trump announced “Project Vault” a stockpile program at the cost of 12 billion to bolster procurement and storage of critical metals for U.S. manufacturers with the money coming from private funds and a loan from the U.S. Export-Import Bank. With investments in USA Rare Earth Inc of up to 1.58 billion dollars and the Department of Defence buying a 400 million dollar stake in MP Materials. Both of which are companies that mine critical earth metals. Such programs were also undertaken by other countries such as South Korea, Japan, Albania, and the EU. 

After the announcement of the trade group, stocks of various mining companies such as MP Materials, Critical Metals, NioCorp Developments, and USA Rare Earth dropped 6-14 percent. 

The development of a critical metals safeguard group is likely to amplify the effect of previous U.S deals such as the Pax Silica between the U.S, Australia, Greece, Israel, Japan, Qatar, South Korea, Singapore, United Arab Emirates, and the United Kingdom. Primarily to secure the future development of AI with increasing material, energy, and infrastructure demands. 

These policies have also been speculated to influence the future power of BRICS (Brazil, Russia, India, China, and South Africa) as every country in the organization is considered “metal-endowed” with Australia and Canada being the only 2 U.S aligned countries that are considered such. If the U.S and other countries bolster critical metal production and decrease reliance on BRICS it could signify changes in the top producers of critical metals and decrease influence of BRICS countries on global production. 

Many of these agreements show that despite increased political tensions between foreign countries and the Trump administration there is still a pressing need over economic development, technological advances, and resource needs by various countries. With the digital age and the age of AI. While much of the world is growing wary of China’s influence in such regards this could signify a shift in global hegemony as such alliances would likely weaken China’s influence. 

Deep Sea Nodules which contain various critical earth metals, Photo via National Oceanography Centre and the Trustees of the Natural History Museum

***

Although there is much importance on critical earth metals it is also important to note the environmental impact of such efforts where certain mining operations are taking place in areas with region specific biodiversities and large scale mining could harm such environments. Which will lead to a delicate balance of governments and organizations to regulate economic concerns with environmental concerns. Especially as demand for such metals are growing and more extreme measures are seemingly being considered. But it is important to further explore implications of transitions to green energy on the environment as many such mining companies position themselves as entail to the green revolution while using methods against the green revolution. 

***

This article was edited by Sydney Sternagel and Sinhawe Haji.