Critical Minerals Supply Chain at Risk: How China's Export Policies Could Impact Global Markets

Rhea-AI Summary

China's new export controls on critical minerals, set to take effect on September 15, 2024, are raising concerns about global supply chain implications. The changes directly impact the tungsten market and could signal potential future restrictions. This comes as the United States needs to increase its critical mineral usage tenfold for clean energy transition.

In response, mining companies are working to improve critical mineral production outside China:

• Troy Minerals Inc. (CSE: TROY) acquired two high-purity silica assets and is developing vanadium and rare earth element projects.
• United States Antimony (NYSE: UAMY) acquired Alaskan mining claims with high copper values.
• Perpetua Resources Corp. (NASDAQ: PPTA) is advancing its Stibnite Gold Project, which would be the only mined source of antimony in the US.
• Electra Battery Materials (NASDAQ: ELBM) is developing North America's only cobalt sulfate refinery.
• MP Materials Corp. (NYSE: MP) operates America's only scaled rare earth production source at Mountain Pass.

Positive

• Troy Minerals acquired two high-purity silica assets, diversifying its critical mineral portfolio
• United States Antimony acquired 69 Alaska mining claims covering 11,040 acres with high copper values
• Perpetua Resources received a $1.8 billion letter of interest from the Export-Import Bank of the United States for its Stibnite Gold Project
• MP Materials' NdPr production more than doubled quarter-over-quarter to 272 metric tons
• MP Materials was awarded an NdPr supply contract for the US Department of Defense

Negative

• China's new export controls on critical minerals could disrupt global supply chains
• The United States needs to increase its critical mineral usage tenfold for clean energy transition, indicating a significant supply gap

Insights

Financial Analyst

China's new export controls on critical minerals, particularly tungsten and antimony, could significantly impact global supply chains and prices. This move may increase volatility in the critical minerals market, potentially driving up costs for industries reliant on these materials. For investors, this presents both risks and opportunities:

• Companies with non-Chinese sources of critical minerals may see increased demand and higher profit margins.
• Firms heavily dependent on Chinese imports might face supply disruptions and cost pressures.
• The situation could accelerate investment in alternative sources and recycling technologies, benefiting companies in these sectors.

Investors should closely monitor companies like Troy Minerals and MP Materials, which are positioning themselves to capitalize on this shift in the global critical minerals landscape.

Market Research Analyst

The critical minerals market is poised for significant growth, driven by clean energy transitions and geopolitical factors. Key points for investors:

• The US is projected to need a 1000% increase in critical mineral usage for its clean energy goals, indicating massive market expansion.
• Growing demand for high-purity silica in silicon photovoltaics presents opportunities in companies like Troy Minerals.
• Diversification across various critical minerals (e.g., REEs, vanadium, antimony) could be a prudent strategy given the evolving market dynamics.

While China's export controls create short-term uncertainties, they're likely to spur long-term investment in non-Chinese sources, potentially benefiting North American and other international mining companies. Investors should consider the geopolitical risks and opportunities in this rapidly evolving sector.

Tech Expert

The critical minerals situation has significant implications for the tech sector:

• Rare earth elements (REEs) are important for many high-tech applications, including electric vehicles, wind turbines and consumer electronics.
• Silicon's importance in photovoltaics highlights the growing intersection of tech and clean energy sectors.
• Supply chain disruptions could accelerate innovation in material science and recycling technologies.

Companies developing alternative materials or more efficient use of critical minerals may see increased interest. The tech industry might also push for more localized supply chains, benefiting firms like Electra Battery Materials in the EV battery space. Investors should watch for tech companies investing in securing their supply chains or developing new technologies to mitigate reliance on critical minerals.

USA News Group Commentary
Issued on behalf of Troy Minerals Inc.

VANCOUVER, BC, Sept. 3, 2024 /PRNewswire/ -- USA News Group – Experts in the critical minerals space are sounding the alarm that recent changes to China's export controls could have serious global critical supply chain implications. While the changes directly will impact the tungsten market, mining strategists worry that it's a confrontational signal for potentially more to come. The ripple effect could make things worse, as a recent report from the Federation of American Scientists states that the United States will need to use ten times more critical minerals than it currently does to achieve its clean energy transition. Players in the mining sector are working to improve the chances for countries outside of China to compete in the critical minerals market, including updates from exploration and mining companies such as Troy Minerals Inc. (CSE: TROY) (OTCQB: TROYF), United States Antimony Corporation (USAC) (NYSE-American: UAMY), Perpetua Resources Corp. (NASDAQ: PPTA) (TSX: PPTA), Electra Battery Materials Corporation (NASDAQ: ELBM) (TSXV:ELBM), and MP Materials Corp. (NYSE: MP).

Earlier this year, Canada added silicon metal to its critical minerals list. This came after an article in Nature from last year stressed the need to reshore silicon photovoltaics manufacturing to bolster decarbonization and mitigate climate change. As demand for this type of tech grows, so too does significant demand growth in high-purity silica.

Looking to answer this demand, Troy Minerals Inc. (CSE: TROY) (OTCQB: TROYF) just completed its strategic 100% acquisition of CBGB Ventures, which comes with two significant silica assets in the Table Mountain Silica Project in British Columbia, and the right to acquire up to 80% equity interest in Grand Samsara Development LLC which holds the Tsagaan Zalaa Silica Project in Mongolia.

"Through this transaction, we have acquired two highly prospective high purity silica assets, further diversifying and strengthening our critical mineral asset portfolio, and now expect to go on an aggressive campaign of exploration and development across both properties," said Rana Vig, President & CEO of Troy Minerals. "The shorter timeframes for permitting of silica projects provides Troy the opportunity to develop these projects on a much shorter timeline than traditional mining projects, and provides the opportunity to position Troy as an emerging leader in the critical minerals market. With the near-term prospect of production and the objective to become a cash-flowing mining company sets up Troy Minerals for the ability to self-fund exploration activities using non-dilutive capital for future growth."  

Now with the acquisition of CBGB and a mission to successfully explore and develop the Table Mountain project, Troy Minerals is positioning itself to become a leader in Canada's rapidly expanding high-purity quartz silica industry. As well, Troy Minerals is also developing two other critical minerals: vanadium and Rare Earth Elements (REEs).

A few weeks prior to the CBGB acquisition announcement, Troy announced the completion of its additional soil program on its high-grade REE Lac Jacques Project in Quebec, and also announced that the final drill permits had been obtained for its Lake Owen Project in Wyoming, to advance the vanadium, titanium and platinum group elements (PGE) project.

The Lake Owen Project's potential had already captured the attention of the US Government last year, where the United States Geological Survey (USGS) and Wyoming Geologic Survey carried out an airborne geophysical survey at no expense to Troy Minerals. As it stands, Troy Minerals is awaiting final deliverables and expects to be able to release the results in the near future.

China's latest export controls changes (set to take effect on September 15) directly addresses controls on antimony, which is used in bullets, nuclear weapons production and lead-acid batteries. Having built its name by selling processed antimony, zeolite and precious metals products, United States Antimony Corporation (USAC) (NYSE-American: UAMY) continues to work towards addressing the critical minerals space.

Most recently, USAC announced the acquisition of 69 Alaska mining claims covering 11,040 acres, with the company's brain trust attracted to historical State of Alaska data. One of the prime targets of the staking program was an 8-foot-wide quartz vein with very high copper calues that the company geologist had previously examined. Assay values of 13 samples collected by the State geologists, from the quartz vein averaged 16.5% copper with 0.076 opt gold and 2.21 opt silver. USAC makes mention that copper is one of the minerals on the US Department of Energy Critical Minerals List.

"These Alaskan properties continue to expand our in-house strategic mineral reserve options," said Joe Bardswich, P.E., Director and Co-CEO of USAC. "Alaskan citizens are very much aware of the importance of natural resources to the national security of this nation. State rules, regulations and the attitudes of citizens encourage environmentally responsible development without the many years of red tape found under other jurisdictions. The State of Alaska is under-explored, and we are considering other mining opportunities located in Alaska."

Perpetua Resources Corp. (NASDAQ: PPTA) (TSX: PPTA) is another company with antimony interests, specifically through its Stibnite Gold Project, which is one of the highest-grade, open pit gold deposits in the USA, and is designed to apply modern techniques to not only produce gold, but also the only mined source of antimony in the United States.

The company's vision is to provide the USA with a domestic source of antimony, as well as produce gold. With its recent Q2 2024 highlights, Perpetua Resources reiterates it is focused on advancing the permitting for the Stibnite Gold Project through the National Environmental Policy Act process and construction readiness for the Project.

"Perpetua Resources' progress in the second quarter of 2024 to advance the permitting and construction readiness for the Stibnite Gold Project was further complemented by the $1.8 billion letter of interest we received from the Export-Import Bank of the United States in April," said Jon Cherry, President and CEO of Perpetua Resources. "Stibnite is a world-class gold project with a strategic and valuable by-product in antimony, and we look forward to building on our momentum."

Another critical mineral that needs to be addressed at the domestic level is cobalt, which Electra Battery Materials Corporation (NASDAQ: ELBM) (TSXV:ELBM) is targeting. Currently focused on developing North America's only cobalt sulfate refinery, Electra is executing a phased strategy to onshore the EV supply chain and provide a North American solution for EV battery materials refining.

Recently, Electra announced its participation in Indonesia's first critical minerals conference, Fastmarket's International Criticdal Minerals and Metals Summit: Indonesia. Electra's participation will underscore the opportunities to develop sustainable nickel and cobalt supply chains for the North American battery materials sector.

"We are honored to be invited to share our insights at this inaugural event," said Trent Mell, CEO of Electra. "Indonesia will play a crucial role in the future of battery production, and we welcome these discussions around how the region can enter new markets to support the development of an IRA-compliant supply chain. As we look to the future, expanding North America's battery materials supply chain by increasing processing capacity for nickel and cobalt not only fosters new global partnerships but also ensures that our approach to sourcing and production aligns with environmental stewardship and long-term sustainability goals."

While Electra is working towards domestic cobalt supplies, MP Materials Corp. (NYSE: MP) touts America's only scaled rare earth production source at its Mountain Pass facility. In its most recent Q2 2024 results, MP Materials reported that NdPr production more than doubled quarter-over-quarter to 272 metric tons, with the company expecting 50% sequential growth in Q3. As well, MP Materials was awarded an NdPr supply contract for the US Department of Defense.

"Going forward, we expect to ramp NdPr output by 50% in the third quarter, positioning us for continued reductions in our refined products cost structure through year-end," said James Litinsky, Founder, Chairman and CEO of MP Materials. "While it is early, we are cautiously optimistic that the third quarter will be one of our best REO production quarters ever. Moreover, our growth projects are progressing well with Upstream 60K advancing and NdPr metal production in Fort Worth on track to begin later this year."

Article Source: 

CONTACT:
USA NEWS GROUP
info@usanewsgroup.com
(604) 265-2873

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SOURCE USA News Group

FAQ

When will China's new export controls on critical minerals take effect?

China's new export controls on critical minerals are set to take effect on September 15, 2024.

What critical mineral projects is Troy Minerals (TROYF) developing?

Troy Minerals (TROYF) is developing high-purity silica assets, as well as vanadium and rare earth element projects.

What is the significance of Perpetua Resources' (PPTA) Stibnite Gold Project?

Perpetua Resources' (PPTA) Stibnite Gold Project would be the only mined source of antimony in the United States, providing a domestic supply of this critical mineral.

How much did MP Materials' (MP) NdPr production increase in Q2 2024?

MP Materials' (MP) NdPr production more than doubled quarter-over-quarter to 272 metric tons in Q2 2024.

What is Electra Battery Materials (ELBM) developing in North America?

Electra Battery Materials (ELBM) is developing North America's only cobalt sulfate refinery to support the EV battery supply chain.