The Decisive | Season 5 Ep.11 - Critical Minerals at a Crossroads: Navigating Supply, Demand, and Geopolitics

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Kristen Hallam:

You're listening to The Decisive Podcast. Insights and analysis to empower confident decision-making. Hello and welcome. I'm Kristen Hallam, your host for this discussion. Critical minerals are the backbone of the modern global economy, underpinning everything from clean energy technologies to advanced electronics and infrastructure. Each mineral plays a unique role. Copper powers electrification, lithium drives battery innovation, and rare earths enable high-performance magnets essential for everything from wind turbines to smartphones.

Today we're discussing critical minerals because the world is at a crossroads. The energy transition and rapid advances in artificial intelligence are dramatically increasing demand for critical minerals, intensifying competition among governments and businesses to secure reliable supplies. This urgency is heightened by shifting geopolitical dynamics, with countries prioritizing resource security in an era marked by transactional alliances and rising nationalism. Recent developments illustrate this global race. The Trump administration's proposals to build strategic stockpiles and forge new alliances, and China's tightening of rare earths exports, both underscore the growing strategic importance of these resources. War in the Middle East further complicates the global picture for critical minerals as instability in this region threatens supply chains, and heightens volatility in energy and resource markets. We've already seen prices rising for copper and aluminum, for example.

In this challenging landscape, how can companies adapt and thrive? Our panel of S&P Global Market Intelligence experts will explore this question, offering insights on navigating supply chain risks, regulatory changes, and emerging opportunities. Let me introduce them now: Carla Selman, Head of Latin America Country Risk; Eric Oak, Senior Supply Chain Analyst; Jason Kaplan, Senior Economist in our Pricing and Purchasing team; and David Vagenknecht, Economist in our European Economics team. Let's go ahead and get started with our discussion, and let's start with you, Eric. We're talking about critical minerals today, but how are critical minerals defined? Who is responsible for that definition?

 

Eric Oak:

That's a great question. And I think if we ruminate on that for the next 3 to 4 hours, I think we might be able to get a complete picture of really what that critical minerals space is. But we will spare you that and we'll be a little bit more succinct. The critical minerals definitions are both tight and loose at the same time. Most countries, and it does vary by country, have a definition of critical minerals that involves something around economic or national security, essential functioning to the manufacturing of a product, and then that supply chain or the supply network for those goods is vulnerable to disruption, supply disruption, whether that's political risk, demand changes, again, the business cycle, that's a risk right there, military conflict, et cetera. That gives both, again, a firm definition that you can define what potentially is a critical mineral, but also leaves a lot of leeway for governments to decide what they want to declare a critical mineral and what maybe they don't want to declare a critical mineral. So there is some amount of discretion in those definitions. Obviously, we could talk to the lawyers or the economists and get various definitions of what, you know, essential means.

But really what you have to understand about critical minerals is that each country defines their own list. In the US, for example, it changes every 3 years, or at least it has the opportunity to change every 3 years via the Department of the Interior, the US Geological Survey. So for example, in the most recent release of critical minerals they put out, they have things like copper, metallurgical coal, tin, aluminum, things that you wouldn't necessarily think about when you first think about critical minerals, which is normally stuff like rubidium and some of the other rare earths, cesium. So you do have to think about a little bit more of an expanded view when it comes to critical minerals. There are also multiple, sometimes there are multiple critical mineral lists per country. So the US is an example of that where we have critical minerals and we have critical energy minerals. So just keep in mind and just do a little bit of research if you're thinking about putting things in some of those buckets. But it does include almost anything under the sun that you could imagine would be essential to a manufacturing process.

 

Kristen Hallam:

That is very helpful context. Thank you, Eric. Unfortunately, we don't have time to cover all the minerals that are on the various critical mineral lists. But to provide some context on the trade flow of critical minerals, Eric, maybe you could zero in on a selection of those and tell us who are the biggest importers and exporters, and then what's behind those trade patterns.

 

Eric Oak:

Yeah, so some of the classic critical minerals that you see mentioned, or you think about when someone says critical minerals, are things like lithium, or antimony, that's been in the news recently. So we can talk about a few of those. I think lithium's a good one. That's kind of your classic battery material. So lithium-ion batteries in everything from electric cars to smartphones involve the use of some lithium. Chile has been a classical main source of lithium, but we also see a lot of supply, especially in US imports. We've seen actually a switchover in 2025 in origins from Chile to actually Argentina has slightly edged out Chile in terms of tons imported to the US in 2025.

So we've seen a slight switch there. One of the things that's really potentially driving the trade flows in lithium are governmental regulations and things like Chile implemented a policy around how they manage and run their lithium mines, especially new mines coming online. So those might have an impact on some of those flows, but again, it's the development of new diverse sources that can really start to change some of these flows. Antimony is a great example because it involves export controls. So China released export controls on antimony, I believe last year. And so we see a rapid shift of US imports of antimony from China to other countries. So for example, a lot of EU sources are now contributing a lot of US imports to antimony in 2025, whereas China has fallen off considerably.

And this is by origin as declared to US Customs. So obviously there's some room there for a little bit of noise in the data, but again, from US Customs declared origins is where we're deriving these, these sources. Other kind of critical minerals, again, I mentioned copper. Copper's really important right now in the buildout of data centers, in the construction of electronics and electricity generation equipment. So we see, again, a lot of copper coming from Chile as well. DRC, Peru, Mexico. We've also seen increases in imports of copper to the United States.

We've seen actually a fall in imports in 2025 of copper into the United States by weight, by ton, from Canada. So if you have been keeping track of geopolitics, there have been some questions about trade shifts and where Canada is looking to engage in the international economy. So that, again, can definitely be a factor in terms of shifting where these critical minerals come from. And finally, the rare earths, which are again, a subset of critical minerals, but I think the one that everybody really likes to talk about, those still mostly come from China. China still has a large proportion of the world's capacity in the processing of rare earths. And we saw that play out again through geopolitical discussions across the last year. But another interesting thing is the US actually exports a fair amount of rare earth materials, but they're the raw materials. One of the things we saw over 2025 is that instead of exporting those materials to China, to mainland China, actually, the US is exporting them to other locations.

So actually it's quite a stark shift. In the 3 months to October 31st, 2025, mainland China accounted for only 1.8% of US exports of rare earth materials. And that's down from 84.3% in the same period of 2023. Essentially some of these projects in diversification and in changing where some of these materials are going does have a stark effect over time. Just to close the loop there, where those materials that are going, the US exports of raw rare earths are going, are mostly Japan, South Korea, Taiwan. And so corporations really just need to keep track of those trends and make sure that they're not, again, facing a changing risk environment that they're not prepared for.

 

Kristen Hallam:

Thanks, Eric. And you talked about diversifying supply chains there to build resilience. What do you see as the biggest pros and cons of that approach when it comes to critical mineral supply chains in particular? And if that is the approach, what indicators would show that it's working, Eric?

 

Eric Oak:

That’s a great question. So the classic pros and cons to resilience generally come down to cost and complexity. Complexity really is a subset of cost. You don't want complex things usually in your business because they cost you more money to manage but sometimes they are required if it's required for your business. So really the trade-off is cost. We have a saying on the research team that resilience is a luxury good. So when companies are feeling like spending or are being pressured to build resilience, it's worth it to spend the money to build the resilience.

But when things get tight, margins fall, or potentially there's a little bit of perceived stability within the macro environment, we do see companies start to ramp down their resilience-building efforts. So it really is, yeah, it's a luxury good. It is a cost. It's a cost to safety trade-off, a cost to risk trade-off like any other. And so companies just need to, for their industry, for their supply chains, they need to make that decision to the best ability that they're comfortable with the managing of their own business. That's where supply chain visibility really helps. Understanding where your goods are coming from, which companies, which governments are involved in those supply chains, mapping out the product streams and the product chains and material chains of your goods to understand, hey, that subcomponent actually involves antimony versus you might not know that just looking at your first-party bill of materials. Mapping those out into their subcomponents can help you identify potential risks throughout your supply network.

And finally, how resilience is working. There's no hard and fast rule there. Unfortunately, to really test the resilience of a supply network, you have to shock it somehow. And I don't think a lot of industries are lining up with their hands raised to be the next textbook example of a supply chain shock. So it'll be hard to know necessarily whether it's working unless something happens. But we can see indicators that companies are either adding or subtracting resilience from their networks just via simple things like looking at the amount of suppliers that an average company has in a certain space. Or again, the amount of customers, if that's going up or down in some of these rooms, you can use that as a proxy to see if there's more or less resilience being added into a market. So there's a few ways there, and hopefully that helps.

But again, it comes down to visibility and mapping your supply networks to understand where your goods are truly coming from and what potential risks might be involved in the creation and sourcing of those goods down to their raw materials.

 

Kristen Hallam:

All right, thank you, Eric. So let's bring in Jason now to talk about supply and demand dynamics. Jason, let's start with copper. We've mentioned it a few times already. It's the metal of electrification. What does copper demand look like in the 12- to 36-month outlook, and what are the factors that are influencing that? And then if I can tack on one more question for you, how does that demand compare to supply?

 

Jason Kaplan:

Hello. Yes. So yes, copper is a very good place to start when looking at critical minerals. It's almost the poster child for the reasons why you would designate an element as critical. So taking a step back, copper supply has historically always kept pace with demand, but then along comes electric vehicles, lots of renewable power that needs to be connected to aging energy grids, and a push to add data centers. And suddenly all these new sectors lift demand faster than supply can keep up. So when you add in things also like increased financialization as well, which sort of ties up a lot of the materials, and availability becomes a problem, which then jeopardizes all these nice new attractive sectors and hurts the economic growth of the countries. So in answer directly to your question, the majority of demand will still come from and continue to come from the buildout of construction and the buildout of things like electrical grids.

But in S&P's latest report, we have data centers consuming about 1 to 2% of global demand. It doesn't sound much, but in a really tight market and a market which is really already looking at a deficit, this is enough to push projects out of scope. The miners will certainly try to add new capacity and will look to increase the projects they already have or add new projects. But it's going to be a long time before those come online or a new project comes online. So we rarely see supply as an issue and really moving into a supply-demand deficit very shortly.

 

Kristen Hallam:

Thank you, Jason. So how would you say these dynamics impact copper pricing, Jason, and what's our current forecast for that?

 

Jason Kaplan:

So even before we had some of these new sectors coming along, we did see the deficit coming. We are simply not finding enough mine supply to be added to ensure that supply can keep ahead of demand. And then I said, as you said, then we have all these new mines. And so prices were already moving upwards. And then unfortunately, at the end of last year, we had a major mine in Indonesia called Grasberg. It suffered a significant industrial accident or accident that took it offline, or parts of it for the whole of 2026, or will take it offline until 2026. And this tightening of supplies saw prices rocket. So they were already going up and then they rocketed.

So clearly the supply demand is the thing that is driving prices. I will say that one of the issues we have is the moment prices move either up or down in, in, in either direction, we get increased scrutiny from financial speculation. And this is really only for the exchange traded commodities. So the base metals on the LME, for instance. It tends not to actually cause prices to move, but has the effect of driving it up sharply and driving it down sharply when that sentiment changes. Now, I don't want to make out that exchange trade is bad because it, it adds a way where people can access critical minerals, have those futures contracts to ensure they have the material coming, but it does add this extra complexity. But in terms of our forecast, so after the recent price surge at the start of this year, and that was following the accident and then a sort of spike in demand, we saw prices of copper getting up above $13,000 per metric tonne, really for the first time.

This was astronomical. We do see some slow revisions downwards over this year. Some of the factors that pushed it up should mitigate slowly, but we no longer see prices getting below $11,000 per metric tonne going forward. And there's huge potential that they will go up if there's any more damage to the supply base.

 

Kristen Hallam:

Those are some big numbers there, Jason. Thanks for sharing that. So let's talk strategy. As a procurement officer, Jason, do you need both a short-term and a long-term strategy for purchasing copper or really any critical mineral? How far ahead do you need to plan, especially considering how long it takes for a new mine to come online?

 

Jason Kaplan:

Yeah, no, for sure. I think for copper and critical minerals, it's really never been more important to both have the tactical view, of how to satisfy your immediate needs, and the longer-term strategic view of the changes that are going to make sourcing difficult. So in a tight supply environment like we have with copper at the moment, there will always be increased volatility. Prices are bouncing up and down in far greater than historically we've ever seen before. And when you also have things like long supply chain, and as I say, a lot of the material comes from Chile, from China, from the middle of Africa, from the DRC. It might be a time when looking at critical minerals to change the thinking from ‘what is our lowest cost sourcing supply?’ and more to ‘we're going to be paying higher costs for sure, but at least we have the certainty of supply.’ And certainly, these are some of the discussions we increasingly have with clients where the perspective of low price remains very important, but loses some of its meanings when you cannot get the supply you're looking for.

So I did mention copper and the base metals have the benefit of being exchange traded. So a procurement officer might look at that and just use future contracts to guarantee the supply. And that's, those are almost certainly going to be honored. But for many of the other critical minerals, and especially all the rare earths, there's no easy access for trading them. And so therefore you start coming to the conclusion you need to carry inventories, and that's anathema to many supply chains. But unless you have that, you cannot protect yourself when there's any kind of global geopolitical change, as we've seen quite recently. However, taking the long-term view, and I think in all procurement departments really do benefit from having a clear view of how structural shifts are changing their market. And that's both on the supply and demand side. And once you understand that, planning on how to satisfy both the near-term options, and as I say, that might be inventories or contracts, and then navigating long-term changes to ensure that you can keep running your operation.

 

Kristen Hallam:

Thank you, Jason. So where do you see alternative supply chains coming online in the next few years, Jason? And what are the main challenges to bringing more supply online to meet demand?

 

Jason Kaplan:

So as an economist, I'd really look to market economics to be the best driver of new supply. So the popular phrase is that the cure for high prices is high prices, and we are starting to see that playing out in the copper market. So only with those very elevated copper prices that we have today do some potential projects make new sense or moving forward with them quickly. However, the lag in adding this new capacity will be a burden to many industries. We will still see a deficit. So I think here government support or financing support can ensure that supply appears as quickly as is needed or quicker than it would otherwise. Equally, they can help build the regional relationships to benefit companies or to help develop the infrastructure in those countries to allow access to those minerals. Otherwise, as I say, I think we're looking at multi-decade lead time to add new capacity, in which case all those industries are not going to be running forward.

I would say alternatively, we can look for new supply from new technologies. Personally, I think scrap is gaining in importance, but it's still underutilized in Europe and in the United States. Adding more processing facilities for scrap would alleviate some of the supply tightness more quickly and cheaply than building, say, a new copper smelter or aluminum smelter. Also, we are seeing new alternative technologies that could add capacity from existing projects. So copper has electrowinning solvent extraction, lithium has direct lithium extraction, and nickel has its hot pressure acid leach, which has made Indonesia the nickel powerhouse recently. So other alternatives could be developed if supply is tight enough and price is sufficient. But it's very difficult to predict whether these developments will materialize. The shorter supply is, the bigger the deficits grow, the more likely we will see alternatives.

 

Kristen Hallam:

Thank you, Jason. Some good points there, particularly about scrap. So let's dive deeper into the political and geopolitical forces influencing critical mineral supply chains. One of the demand drivers for critical minerals has been the energy transition, thinking about the push for electric vehicles and greater sustainability. Carla, how much of the demand for critical minerals is being driven by this now, globally and regionally, and what other drivers do you see?

 

Carla Selman:

Yeah, so the way we see it is that indeed the strategic importance of critical minerals has shifted. So what, like years ago, copper, lithium were mainly used for manufacturing industry, they have become more important for more strategic sectors. So yes, you mentioned energy transition. For years we've been talking about how these minerals are key for energy transition, with copper being a very important material for transmission infrastructure. And lithium for storage, such as batteries for electric vehicles. But now also we have the other driver that it's all the AI and technological advances.

So what we have seen like in the past years with this proliferation of data centers that on the one hand they need critical minerals for their own infrastructure, but also they need a lot of energy to operate. So also they drive demand for renewable energies that also require critical minerals. In defense too, as we have seen, as conflict evolves and new technologies are included in warfare, this is also becoming of more demand. So we have that critical minerals are used for storage, AI hardware, chips, permanent magnets, and in defense, for example, for drones, radars, missiles. So all of this is why this supply chain resilience on critical minerals has become so important and has become an issue of national security. And it has driven also partly this strategic competition between the US and China, because China controls the supply chains of refined copper and processed lithium and rare earths. And now the US is trying to reduce the vulnerability and reduce this dependence from China. So this is why the US is now building alliances, seeking alliances on critical minerals, including with Latin American countries.

So in the past year, we saw that export controls and also tariffs in the case of the US have been used as negotiating tactics by these two countries to, to expand their global influence.

 

Kristen Hallam:

Thank you, Carla, and appreciate you highlighting the defense and military applications there. Very relevant and timely insights. So, Carla, Latin America is home to great deposits of copper, lithium, and other critical minerals. How are countries there with significant deposits and extraction operations navigating that strategic competition between the US and mainland China?

 

Carla Selman:

I think China has built a very strong presence in Latin America for many years quietly, particularly in minerals and critical minerals. The US came late and we have seen that only in recent years, it has become an issue of importance for the US, particularly now more than ever under President Trump, it has become a priority. Under Trump's national security strategy, they specifically identify Latin America as a region to provide the US with access to critical minerals and to strengthen supply chains. And it has been included in all these tariff and trade negotiations. So what are Latin American countries doing and what they are likely to continue to do? They will continue to balance these relationships with both countries, with the US and China. On one hand, they will try to get as much gains as they can from this increased demand, but without compromising their sovereignty. Both the US and China are very important markets. This shows critical mineral exports from Latin America to the US and China.

But particularly China has been more, it's more prevalent. So we think that any government is in any case unlikely to move away from China because it is for many the first or the second export market and main recipient of Chile and Peru's copper, Argentina, Chile and Argentina's lithium. They are more likely to balance. There will be, however, some pivots that we're seeing, particularly as the region elects new or has elected new right-wing presidents. So we have in Argentina a government aligned with the US. It's halfway through their term, but we have new governments in Bolivia and Chile, which are also more likely to align with the US. And one interesting example here is Bolivia, because Bolivia has very large lithium reserves, probably the largest in the world, but has very little production. And up until now, all the contracts that they have are with Chinese and Russian firms, but they have not been known to the public.

So the new president, Rodrigo Paz, is from the right wing, the first right-wing president in 20 years, and he has pledged to review the framework, and review these contracts and probably allow more US investments in lithium. And the last one that I also want to mention is Brazil on rare earths, because Brazil has the second largest reserves of rare earths in the world after China. So it could become a competitor, but it still has very little production, the industry's at very early stages, but the US and the EU are looking at Brazil to potentially increase cooperation and kind of source rare earths from there. It's also part of the tariff negotiations, the ongoing tariff negotiations between Brazil and the US. But there is a big challenge that for Brazil, China is their main trading partner. And so they will still obviously will have to balance their relationship with China.

 

Kristen Hallam:

Thank you, Carla. So in your view, Carla, what separates countries that will be viewed as trusted suppliers from those seen as merely resource holders?

 

Carla Selman:

Most countries are making an effort to be seen as trusted suppliers. So we are likely to see a lot of changes in the framework. So I already mentioned Bolivia, President Rodrigo Paz promised a new mining framework. But also, for example, in Chile, there's a new president who wants to allow more private investment in lithium sector. So up until now, lithium in Chile, and it was mentioned before that Chile has been the largest exporter of lithium in Latin America. Now they're more, more tied with Argentina, but it has been. But lithium is considered a strategic mineral in Chile.

So concessions are not allowed. So the new president is trying to change, will try to change that to allow concessions, although that will be very difficult because it has to go through Congress. So what we see more feasible probably will be try to adjust the contracts to allow more private investment and move away from this state-led model that has been implemented under the outgoing government. And the other thing very quick, just want to say, also, all the trade deals or critical mineral deals that, that are being— Latin American countries are signing or have signed with the US so, countries like Mexico, Argentina, Peru, Ecuador, they've already signed critical minerals that set some conditions for increased cooperation to position themselves also as key suppliers.

 

Kristen Hallam:

Thanks, Carla. I've got one more question for you. Where is there greater potential for domestic processing of critical minerals? So processing in the same countries that extract them. And what are the main challenges to developing domestic processing? And Carla, I'd like you to start, and then if we could bring in David to provide the European perspective on this question.

 

Carla Selman:

Yes, from the Latin America point of view, I have to say that on paper it is a priority for almost all governments to process, refine domestically, but it is very difficult. It is a challenge. So with copper and rare earths particularly. So there are many challenges such as environmental concerns, and Latin America has a history of activism that can delay these projects. Also costs, and in the case of rare earths, is the technological advances needed to separate the material, the mineral. So still very far from becoming competitive in in a sense, where there are more opportunities is lithium, because in lithium there are, there is more domestic processing capacity. So in Chile and Argentina, big part of lithium is processed domestically that enriches, uh, like battery-grade purity at export. So this means that it is usable in the US for further refining or manufacturing. And then kind of slightly reducing dependency from China.

 

David Vagenknecht:

Yes, so quite a similar story. So if you look at the EU, they aim to bring refining and processing online domestically, but as already stated, it's a long journey until it's fully functional and operational, and until the EU has done some progress towards becoming more self-sufficient Now, if you look at what the European Commission has issued last year, they provide a nice map highlighting about 47 strategic projects that span across 13 or so member states, which kind of tells us that it's less about geographical scarcity and more about the lack of industrialization of critical minerals in the EU, as well as lack of the underpinning infrastructure and technology. But despite these challenges, we have seen some advancements last year. So for example, in April, Solvay’s plant in La Rochelle in France, they opened a production line for permanent magnets. Another example is later last year in September, a new permanent magnet facility was launched in Estonia. Now, this is not to see it as a trend like that new capacities will keep popping up because there are several restrictions that are not only near-term restrictions. So the EU or the European Commission has put forth its strategy to boost investment into processing, into extraction, into recycling. But ultimately, if you look at who does the decision to ultimately kickstart an investment, it sits with national governments, if this reduces the EU's agency in implementing its plans to control progress in domestic sourcing and processing, then as always, as Carla also mentioned, you have this possible opposition related to environmental concerns.

Financing is a big one, especially missing private capital. The problem with critical raw minerals investments is that be it mining or processing, it typically requires quite substantial upfront capital outlays amid exposure to price volatility and also long lead times. So, you essentially have a point where you start investing and then a long period of high-risk exposure, and only then later on you break even. Now the question is, who wants to provide or put their private capital into this uncertainty? And then a last point is that there are complicated, or let's say complex ownership structures of extraction and processing projects in Europe that complicate operationality. So an example is critical minerals extraction points in Greenland. They are co-owned by Australian companies. Some plants in Belgium or even France, they are partnering with US firms, and the more complex the ownership structure is the more lengthy the decision processes is at a time where you want to act relatively quickly and expedite procedures.

 

Kristen Hallam:

Thanks, David. And let's maybe provide some more context on what exactly the European Union plans to do on critical minerals. How likely is it that those measures that the EU is considering or implementing will get them closer to strategic autonomy on critical minerals?

 

David Vagenknecht:

Yeah, sure. So they will get them closer, but not— it's a long time. We're talking about 5+ to 10+ years. And there are two major initiatives or acts. So if you look at back in 2023, the European Commission has deployed the Critical Raw Minerals Act, and then last year they issued the Resource EU Act or initiative, which builds on the Critical Raw Materials Act, and its goal is to target critical raw material extraction within the EU, also processing and recycling. Now, that's because of the high dependencies on especially processing coming from mainland China. And you can think about these strategies from a time window. So there is a near-term view on it and there is a long-term view on it.

The near-term view is that the EU aims to ramp up domestic recycling. They put a bigger emphasis on it compared to the United States, for instance. They also want to ramp up stockpiling. And they also want to diversify it via new partnerships. Now, there are problems with these, with these strategies. So if you ramp up domestic recycling, that only brings you marginally towards greater self-sufficiency. If you ramp up stockpiling, the problem is that there are limitations as many critical minerals can't just be stored over long periods of time.

And then we go to the longer-term perspective, where the EU wants to increase domestic, not only recycling and stockpiling, but also processing and extraction capacities. And these efforts will be backed by the strategic plans deployed. So especially the ResourceEU, it's a €3 billion worth of money, but then you have the issue, it's not going to be unlocked in one go. It will span over time. So that also delays it a little bit. And we can look at Japan as an example. In Japan around 2010, they tried to diminish their reliance on critical raw minerals from China. And over the last decade or so, they were able to reduce direct dependence from around 90% to 60%.

And then for the EU, you have to account for the fact that the EU, as we talked earlier, their decision to invest ultimately sits with national governments. So they are constrained by a less centralized decision-making procedure. That only underscores the need for the EU to become a member of a, of a club or of a partnership that allows them to source and process critical minerals in an environment that's certain and that protects them from any geopolitical tensions. If we look at what the European Commission has proposed, they want to have a goal. They set a goal that if you look at the list of critical raw minerals, then 40% of them have to be, or should be, or aimed to be processed within the EU. Now, if we allow a margin for some setbacks, so let's say they only achieve by 2030, 30% or 35%, that leaves you with around 70% still reliant on external sources.

 

Kristen Hallam:

Right. Thank you, David. So, David, I'm going to ask you the same question I asked Carla, which is how are countries in your region navigating the strategic competition between the US and mainland China when it comes to critical minerals?

 

David Vagenknecht:

So it's happening both on an EU level where you have the European Commission trying to sign deals, trade deals, and part of those trade deals is also some clauses regarding critical raw minerals. We're seeing increasing efforts coming from the private sector where firms on their own or in bundle with other firms are trying to increase diversification efforts and maybe trying to form new procurement or a joint procurement of those. But it's all happening in a closing time window until uncertainty increases again, because in around October, November last year, there was this deal between the United States and mainland China, which protects from additional export controls from China. But this deal has only been signed for 12 months. That means that it expires November 26th, and we don't know what's going to happen. Will it be prolonged or scrapped or changed? What we do know, it leaves uncertainty coming towards the end of 2026. And this is why I think we can also see companies trying to increase their diversification efforts. And now also what's important to say is that the US is also showing efforts to diversify.

So, you have the EU's de-risking efforts being limited by US competition. At the same time, when the EU has to be mindful, because the EU, we still have to bear in mind, they're still dependent on the United States due to security guarantees or LNG and other energy imports from the United States to, to Europe. And the EU, as a more complex bureaucracy and as a body that has a likelihood of dissent on member levels and stricter environmental regulation as compared to the United States, makes it slower moving compared to the United States. And by doing so, if the US is then— has a higher chance to be is the first one to make a deal with other countries, then it crowds out the benefits that remain left for the EU. And this is a, a tough position for the EU to navigate.

 

Kristen Hallam:

All right. Lots to keep an eye on there, David. How is the EU navigating this tension between its role as an environmental leader globally, thinking about emissions and clean energy regulation, with the political resistance to increasing mineral extraction and processing activities that can contribute to environmental damage?

 

David Vagenknecht:

Yeah, so it's, it's a balancing act. You have to ease here to allow more on the other side. And if we just look at the actions of the European Commission, just the fact that they have identified these 47 EU-based mining slash processing projects implicitly sets forth the readiness to relax environmental rules that have prohibited domestic extraction in the past. And in addition to that, if you look into the documents issued by the European Commission, this Critical Raw Minerals Resource EU, they also aim to streamline and expedite permitting provisions for the identified projects, and we can move towards the trade dealmaking that the EU has done over the past several months. And we can see the same emerging trend where you have this increased flexibility with regards to the EU's environmental rules, the latest negotiations with Indonesia or the Mercosur bloc comprising some of the Latin countries. And specifically, this is to overcome political obstacles that might be in the way of being able to sign the trade deals.

We think the EU is likely to reduce pressure on third-party countries and businesses to comply with EU environmental measures. The EU is also moving toward easing due diligence and sustainability requirements. So, that being said, it doesn't mean that regulation of environmental rules is off the table. The EU is still pretty much likely to be the leader in that way, but it's just that we see elements of these efforts to ease those rules. And it's, it holds that the EU can't just simply go and replicate what China has done with regards to rare earths or critical minerals in general without being able to absorb the large social and environmental cost that go along with it. So there will be a balance going forward.

 

Kristen Hallam:

All right. Now we're going to do a bit of a lightning round. So I'm going to ask everyone on the panel this question, and I'm going to start with you, Eric. From your perspective, what signposts should businesses be watching for that would cause you to change your current outlook or forecast or expectations around critical minerals?

 

Eric Oak:

Good question. Yeah. So quick lightning round, really look for changes in, again, in supplier diversification. Kind of like I mentioned earlier, if there are significant changes in different sources, those we can normally watch on at least a monthly basis. In some places you can get more real-time data on where goods are arriving from. That's obviously an interesting thing to look at and understand where your risks are within your business. Other signposts, really, I think the big one is watching the geopolitical discussions that are happening across the world today and over the past year and in the future. Understanding which countries are your risk sources or potential suppliers is going to be important.

And then really taking a look at, at what's coming out of those, of those regions and what events might spark potential effects. So that's really like tactical level. Those are the signposts that as a procurement manager, I'd be looking at.

 

Kristen Hallam:

All right. And Jason, same question to you. What signposts should businesses be watching for?

 

Jason Kaplan:

To me, it's really any tightening of the supply side. The moment we have that, we're going to have a lot of issues with a lot of these critical minerals. As I say, supply is a big issue. That's the thing I'd be looking at constantly, and the implications on price will be, can be extreme.

 

Kristen Hallam:

All right, thank you. Carla, over to you. Signposts that businesses should be watching for.

 

Carla Selman:

Some indicators that we are looking at is, for example, any contract cancellations to any Chinese investment in the mining sector in Latin America. That would indicate clear pivot. We still see it as unlikely, but it is something to monitor. And the other thing I just want to mention is anything around investment announcements on the physical infrastructure. So there have been already some disputes over this strategic mega-port in Peru, in Chancay, that connects Latin America with China. So any similar, any measures from the US to counter this type of expanding influence is also something that we're monitoring.

 

Kristen Hallam:

All right. And David, same question for you. What signposts should businesses be watching?

 

David Vagenknecht:

Keep an eye on the developments between mainland China and the United States, especially the deal that they have signed or agreed upon late last year, and any signs of increased readiness to boost public procurement for sourcing in the EU.

 

Kristen Hallam:

All right. Thank you. That is all the time we have for today. A huge thanks to Carla, Jason, David, and Eric for sharing their insights with us. And thanks to you for joining us today. Until next time. Thank you for listening to The Decisive Podcast from S&P Global. Please subscribe and join us for next week's episode. Until then, stay curious and stay informed.