Risks in Trading Critical Minerals and Specialty Metals

War Just Revealed the #Metals Market’s Greatest Weakness The war in the Middle East did not just move metals prices. It exposed how fragile the global metals system actually is. #Aluminium has surged toward levels not seen since 2022. Many analysts describe this as a simple supply disruption. That interpretation misses the real story. The market is not repricing tonnes. It is repricing risk across the entire industrial chain. When instability touches the Strait of Hormuz, roughly a fifth of global oil trade sits inside a geopolitical corridor. That energy powers smelters, fuels shipping and moves alumina, bauxite and finished metal across continents. Industrial metals are therefore exposed to far more than mining. They are exposed to energy systems, maritime chokepoints, refining capacity and #globallogistics simultaneously. Reporting from Reuters and Bloomberg has focused on cancelled warrants, warehouse withdrawals and diverted cargoes through Asian hubs. Meanwhile Benchmark Mineral Intelligence has raised its aluminium outlook as supply risk intensified. But aluminium is only the first visible signal. The deeper issue is structural. For decades the metals industry optimized itself for efficiency while quietly accumulating vulnerability. Smelters were built where power was cheapest. Processing concentrated where scale was easiest. Shipping routes assumed geopolitical stability. Warehouses evolved into financial instruments instead of strategic buffers. That system worked when #globalization reduced friction. War breaks that assumption instantly. For the United States this exposes a strategic contradiction. Washington speaks constantly about “ #criticalminerals security”, yet refining, smelting and midstream processing remain globally concentrated. Mining policy alone does not secure metals supply. Security ultimately depends on processing capacity, energy reliability and resilient logistics. For the Middle East the moment reveals leverage. Energy flows, aluminium smelting capacity and maritime routes converge in the same geography. Companies such as Aluminium Bahrain and Emirates Global Aluminium (EGA) sit at the intersection of those systems. When instability reaches the region, the shock travels through global supply chains. This is why the volatility matters. Metals markets are no longer reacting only to ore grades or demand cycles. They are reacting to energy corridors, shipping lanes, refinery bottlenecks and #geopolitical stress. #Supplychains optimized for cost are rarely designed for resilience. The companies that will outperform will not simply be the lowest-cost producers. They will be those capable of executing under pressure: diversified logistics routes, secured energy inputs, regional processing capacity and strategic inventories near demand. Because the real question the market is asking now is simple. Who can keep metal flowing when the map itself becomes volatile? #Mining #EnergySecurity

Relatively small amounts of critical minerals underpin trillions of dollars in economic value globally. New IEA analysis highlights growing risks, including export controls, although countries are also taking steps to make supply chains more secure 👉 https://iea.li/4aTpQ33 The geographic concentration of critical mineral supply chains continues to grow, particularly for refining. Rare earths are the exception. The top supplier's share fell from 90% in 2023 to 85% in 2025, showing progress is possible with strong policies. Read more in the International Energy Agency (IEA)’s Global Critical Minerals Outlook 2026 👉 https://iea.li/4bNpwDh While critical mineral projects are being announced & developed across the globe, we see a structural imbalance in diversification efforts. Investment outside the dominant supplier remains concentrated in mining, while efforts to expand refining & downstream capacity lag behind. In a complex geopolitical environment, critical minerals have moved to the forefront of countries’ energy, economic & national security agendas. This is making a difference: public finance commitments more than quadrupled between 2023 and 2025, reaching $65 billion. New IEA analysis also sees a major opportunity to diversify supplies of strategic minor minerals. The investment needed is much smaller than the potential risks of disruption and can be seen as economic insurance. Since #CriticalMinerals account for a small share of final product prices, the cost of diversification could have a limited impact on consumers. For example, critical minerals account for around a quarter of battery cell costs but only about 3% of the price of an average EV. Diversified supply is not only a matter of investment: it also means tackling gaps in technology, equipment & workforce skills. Our new Global Critical Minerals Outlook 2026 includes guidance for policymakers on this & more. Read it in full on our site 👉 https://iea.li/4bNpwDh

The Energy Transition is a Materials Transition, and Global Supply Chain is Far More Exposed than Most Boardrooms Realize. Let´s take a look to the US case. U.S. Geological Survey (USGS) data on America’s net import reliance for 37 critical minerals (2025) shows a hard truth: ✅ 11 of 37 are 100% import-reliant (zero domestic production). ✅ Several others depend on foreign sources for more than half of supply. ✅ Even “specialty” inputs like scandium and yttrium (aerospace alloys, electronics) are fully imported. ✅ Uranium (nuclear) is 99% import-reliant, led by Kazakhstan, Canada, and Russia. And then there’s the center of gravity: China remains the dominant supplier for multiple strategic materials, including rare earths, graphite, tantalum, antimony, arsenic, and yttrium. Rare earths are a case in point: 67% U.S. import reliance, while China still dominates global processing capacity. Meanwhile, the “big tonnage” metals that power electrification are also import-heavy: ✅ lithium (>50%) from Chile, manganese from Gabon, niobium from Brazil, ✅ copper (57%) from Chile, bauxite (60%) largely from Canada — and more. This isn’t just a procurement issue. It’s industrial strategy, energy security, and geopolitical risk. Next move for leaders: diversify suppliers, invest in domestic and allied processing, lock in offtakes, scale recycling, and build resilience before the next disruption builds it for you. If we want secure clean energy, we need a supply strategy as serious as the climate strategy. #CriticalMinerals #EnergyTransition #SupplyChain #IndustrialStrategy #RareEarths #BatteryMaterials #EnergySecurity

Edifying graphic that NATO published in Dec. 2024 showing the importance of raw materials in military supply chains. More relevant than ever now that China is ratcheting up its critical mineral export controls and some European manufacturers are running low on rare earths. If Beijing does not provide some relief, some production may be halted. NATO identifies 12 critical raw materials for defense: Aluminium Beryllium Cobalt Gallium Germanium Graphite Lithium Manganese Platinum Rare Earth Elements Titanium Tungsten Some of NATO's notes from the news release: "Consecutive global disruptions ranging from the COVID-19 pandemic to Russia’s war of aggression against Ukraine to the environmental threats borne from climate change, together with the increasing complexity of defence supply chains, have highlighted the fragile and vulnerable nature of defence-critical supply chains." "For NATO, the responsiveness, strength, resilience and security of supply chains is essential to protecting Allied industries and ensuring that the Alliance develops military capabilities free from the hostile influence of potential adversaries." Not everything in the graphic is a critical mineral: steel, for instance, is an alloy. But most of the materials listed are indeed minerals, considered critical and dominated by China. Of all the defense systems listed here, fighter aircraft have the most very high risk and high risk raw materials, followed by missiles and battle tanks. Before Russia's full-scale invasion of Ukraine, Europe relied heavily on Russian titanium. Sanctions and wartime disruptions drove up prices, notes the Center for European Policy Analysis (CEPA). Ukraine was the world's fifth largest producer of gallium before Russia's invasion. Recognizing its vulnerabilities, the EU adopted a Critical Raw Materials Act (CRMA) in 2024. It aims for 10% of strategic materials being extracted in Europe by 2030, 40% processed domestically, and 25% sourced from recycling, notes the Center for European Policy Analysis (CEPA). To reduce overreliance, the CRMA stipulates that strategic raw materials should be supplied by several non-EU countries, with no more than 65% from a single source. #aerospace #defense #supplychain #commodities #rawmaterials #minerals #mining #military #nationalsecurity #aviation #europe #ukraine #nato #china Further reading: NATO link: https://lnkd.in/e8cW9TwM CEPA link: https://lnkd.in/e-B5_ydF

The real risk in mining isn’t running out of ore. It’s running out of options. The USGS just dropped its 2025 draft list of critical minerals. It’s not a shopping list it’s actually a risk register. And the message is blunt, supply chain fragility, not geology, is the real constraint. 84 commodities were assessed. Over 1,200 disruption scenarios were modelled. A hierarchy of exposure that looks less like a metals table and more like a geopolitical map. Samarium, rhodium, niobium, metals most people have never heard of sit at the top of the risk curve. Why? Because they’re single-producer dominated. China for samarium. South Africa for rhodium. Brazil for niobium. If supply hiccups, entire industries, from defence to EVs stall overnight. And here’s the contrast that matters: lithium gets headlines, but niobium keeps bridges standing. Cobalt sparks ESG debates, but rhodium underpins automotive catalysts. Different risks, same problem. A fragile chain breaks at its weakest link. For miners, the implication is clear. Discovery security. Without midstream capacity, diversified supply, and serious stockpiles, the U.S. remains one policy shift or shipping lane away from disruption. For investors, it’s a reminder that “critical” doesn’t always mean “popular” it means essential. But as a good friend of mine Travis Ricciardo once said, why aren't all metals critical, we don't mine them for fun For more of my takes on the resource industry sign up to my weekly newsletter www.kamoacap.com #Mining #Exploration #Resources #CapitalMarkets #Copper

Fifteen critical minerals sit under both US and Chinese export controls simultaneously – and European companies can't comply with both. When you restructure gallium sourcing to satisfy US rules, you trigger Chinese licensing oversight. When you document graphite traceability for US procurement, you expose your Chinese JV to ECL scrutiny. This is structural entrapment, not regulatory complexity. The execution window is eighteen months. Most companies treat this as a procurement problem. It's not. It's a capital allocation crisis masquerading as compliance. Non-Chinese graphite costs 40-80% more. Heavy rare earths cost more still. These aren't line items - they're budget decisions that require board approval and most European companies haven't made them. The timeline is what concerns me. China compressed a decade of adjustment into eighteen months through five systematic waves starting August 2023. European planning cycles assume you have years for this type of shift. You don't. The EU's Critical Raw Materials Act targets 2030 while Chinese controls on all fifteen dual-listed minerals are operational today. The only effective response is D7 coordination as proposed by former NATO Secretary General Anders Fogh Rasmussen - Australia, Canada, EU, Japan, New Zealand, South Korea, UK acting together. Brussels can't face Beijing's retaliation alone with €21 billion in automotive exposure. But that political threshold doesn't exist yet and companies can't wait for it. Supply chain bifurcation at product architecture level isn't a future project. It's a capital commitment required now or market access closes before you finish planning. Defense contractors have already subordinated materials sourcing to US regulatory approval. Battery manufacturers face the same choice. Automotive OEMs with China exposure can't run dual compliance on a single platform. The companies that treat this as regulatory overhead will lose market access before their compliance teams finish the review. Are you budgeting supply chain bifurcation as strategic capital investment or managing it as regulatory risk? Roland Berger Rachel Hugo David Frans Ellen Carey Martin Seiwert Hauke Friederichs Steinhausen Markus Robina von Stein Elisabeth Behrmann Franz Anko-Hubik Michael Freitag Doreen Rietentiet Jarkko Vesa Jens Schröder Kristina Gnirke Adrienne Fichter Ernest Scheyder Ulrich Schäfer Colum Murphy Prof. Dr. Torsten Oltmanns Simone Peter Dr. David Born Spencer Gore Anas Hanan Ekke Van Vliet Lieven MachielsAntoine BONDAZ, Ph.D. João Saint-Aubyn Carl Kuehl Christian Thiel Marcus Wolf Eyk Henning BDI - Bundesverband der Deutschen Industrie e.V. Dr. Frank Hiller Prof. Dr. Hermann Eul Reinhard Ploss Bernd Bohr Dr. Martin Brudermüller Dr. Karl-Thomas Neumann #CriticalMinerals #SupplyChainSovereignty #GeopoliticalRisk #EuropeanSovereignty #DOMINANCEAct #D7Alliance #StrategicAutonomy #ExportControls #RareEarthElements #EUChina #IndustrialPolicy #LithiumIonBatteries

China’s Material Restrictions—and Other Critical Materials at Risk   China’s material restrictions are having real-world consequences. Last December, chemicals giant Henkel declared force majeure, suspending deliveries of key products due to shortages. Prices for key materials soared up to 250% in some cases.   So far, China has restricted gallium, germanium, indium, tungsten, tellurium, bismuth, molybdenum, antimony, and graphite.   But these aren’t the only materials at risk. Based on our data, China dominates global mining and/or refining in other critical materials, making future restrictions a real possibility.   Other Critical Materials Dominated by China: - Magnesium: Mining (88%) - Rare Earths: Mining (69%) & Processing (90%+) - Lithium: Processing (60%+) - Aluminum: Processing (58%+) - Cobalt: Processing (68%+) - Copper: Processing (~50%) - Steel: Production (54%+)   With control over key materials, China can cause severe supply chain impacts overnight.   Companies must act now to identify potential impacts on their products and diversify their sourcing while the industry works to develop alternative supply chains. Waiting is not a strategy.

U.S. and Ukraine Sign Critical Minerals Deal: Why Critical Minerals Are the Next Global Battleground The U.S. and Ukraine announced a minerals agreement after months of tense negotiations, signaling how urgently world powers are moving to secure supplies of the metals that power our modern lives. While most headlines focus on tariff spikes and shifting trade corridors, there’s another power struggle unfolding—one that could reshape every smartphone, EV, and fighter jet on the planet. 🔑 Why Critical Minerals Matter • 🔋 Clean-energy pivot: Lithium, nickel & cobalt power EV batteries; rare earths drive wind turbines. • 🚀 Tech & defense edge: Gallium, titanium, tungsten and tantalum are crucial for semiconductors, aerospace, and precision munitions. • 📈 Soaring demand: Battery metal demand could grow 10× by 2030—far outpacing current mining capacity. 🌍 Who Holds the Keys • 🇨🇳 China: Dominates rare-earth processing (~70%). • 🇷🇺 Russia: Rich in titanium, palladium, and rare-earths—crucial for aerospace and electronics. • 🇨🇩 DRC: Supplies ~60% of cobalt, much refined by Chinese firms. • 🇧🇷 Brazil & 🇮🇩 Indonesia: Major players in nickel and niobium. • 🇿🇦 South Africa: Key source of platinum group metals and manganese. • 🇺🇦 Ukraine: Partnered with the U.S. after months of tense talks to develop rare-earth and lithium capacity. • 🇦🇺🇺🇸 Australia & U.S.: Leading lithium producers investing in processing independence. • 🇪🇺 EU & 🇨🇦 Canada: Fast-tracking exploration & streamlining permitting via the EU’s Critical Raw Materials Act. 🌐 A Web of Interdependence No single country can source, refine, and secure all it needs. Global supply chains are deeply entangled—and increasingly strategic. 📊 Governments Are Racing to Lock In Supply • 🇺🇸 U.S.: New MOU with Ukraine, talks with DRC, Inflation Reduction Act incentives. • 🇨🇦 Canada: Extended 15% tax credit and streamlined mining approvals. • 🇪🇺 EU: €9M joint procurement platform and 47 flagship projects. • 🌏 Elsewhere: Japan–GCC partnerships; Australia expanding into Africa and SE Asia. ⚠️ Risks & Opportunities • Geopolitical chokepoints and export curbs • ESG pressure on mining operations • First-mover gains in processing and recycling 🧭 What You Can Do Now 1. Map your mineral dependencies to uncover single-source vulnerabilities 2. Engage policymakers early on offtake deals and ESG standards 3. Use scenario planning and risk assessments to prepare for disruptions 4. Invest in crisis management and resilience strategies before they’re needed In today’s interdependent world, no company—or country—can afford to go it alone. Helping organizations plan for disruption and global complexity is what we do. If you’re looking to strengthen your approach, we’d be happy to help.

On the day the UN Security Council received an expert report on the escalating conflict in eastern DRC and the involvement of Rwandan troops, the U.S. Department of State issued a strong statement of concern related to the flow of critical #minerals from eastern DRC into neighbouring countries and into global supply chains for #tech, #autos and various other #industries. It also warns of the financing of the conflict from these minerals. #DRC is the world's leading producer of Tantalum which the US and others define as a critical mineral. I had the opportunity to visit Goma in May, during which the mine producing 30% of the world's output just to the west of Goma was taken by the Rwandan backed M23 rebels. The US Department of State statement is critical of the 'flawed industry-led traceability initiatives in the region' and focusses on advising the private sector of the risks to supply chains. It is worth noting that this is carefully worded to note '...the United States government recognizes that some industrially-mined and artisanally-mined gold, tin, and tantalum from the region may meet standards applied by various due diligence frameworks.' As a result the US calls for 'More refiners, processors, smelters and end user companies could enhance their due diligence work and invest in upstream efforts to ensure U.S. and other midstream and downstream companies are not sourcing minerals that finance conflict or contribute to human and labor rights abuses, whether directly from the region, including neighboring countries, or from smelters or refineries in countries that continue to accept such conflict-affected minerals.' There is reference to the OECD - OCDE Guidance which: '...suggests that the private sector go beyond purely “desk-based” due diligence and supply chain mapping, avoid disengaging from the region, and instead undertake heightened due diligence and active roles with onsite investigations (including in trading and refining hubs), continuous vetting, review of grievance mechanisms, remediation, and reporting performance.' This is an important distinction and calls on us all to lean in. Ultimately, we need to see de-escalation between governments and their proxies as well efforts towards peace. I know there are brave members of the local Churches in Goma working together in support of that objective. https://lnkd.in/etG7iKqZ

If your supply chain depends on “approved exports” from China, you don’t have a supply chain. The Wall Street Journal just confirmed what many in our industry have felt for months: China is tightening the screws. Manufacturers are now required to submit detailed product images, production-line photos, and end-use documentation to access critical minerals like samarium and gallium. Some U.S. defense contractors are seeing wait times stretch into months—and paying 60x markups just to keep production moving. This is a preview of what happens when strategic materials are treated as geopolitical levers. At 𝗣𝗵𝗼𝗲𝗻𝗶𝘅 𝗧𝗮𝗶𝗹𝗶𝗻𝗴𝘀, we’ve always believed that rare earth metals aren’t just industrial inputs—they’re national assets. And the only real resilience comes from building capacity that can’t be turned off by a foreign regulator. So what does that look like? - Domestic production with full traceability - Partnerships with allied nations who share democratic values - Long-term demand commitments that make investment viable The question isn’t 𝘪𝘧 China will weaponize its position. It’s how much of our economy—and national defense—we’re willing to leave exposed when it does.