Global Critical Minerals Rely On International Trade, Study Shows Critical Vulnerabilities - Global X Copper Miners ETF (ARCA:COPX), Sprott Critical Materials ETF (NASDAQ:SETM)

Core Insights - Over 60% of global demand for critical minerals is satisfied through international trade, which has increased supply but also heightened vulnerability to geopolitical tensions and supply chain disruptions [1][3] Demand Growth and Risks - The global demand for five key energy-transition minerals (copper, nickel, cobalt, lithium, and rare earths) is projected to rise from 28 million tons in 2021 to nearly 41 million tons by 2040, intensifying existing supply chain pressures [4] - The structural risk of dependence on trade is significant, as minor disruptions can have widespread effects on the global market [3] Mineral Significance and Growth - Copper is the most critical mineral due to rising electrification and grid expansion, while nickel and lithium are experiencing the fastest growth driven by electric vehicles and battery manufacturing [5][6] - Rare earth elements and cobalt are essential for motors, electronics, and advanced manufacturing, showing steady demand increases [5] Geographic Concentration Challenges - Geographic concentration of mineral production poses risks, with Indonesia supplying over 50% of global nickel, the Democratic Republic of the Congo producing around 70% of cobalt, and China controlling over 90% of rare earth refining capacity [7] - This concentration leaves dependent nations vulnerable to policy changes from a limited number of jurisdictions [7] Government Responses - Governments are rapidly implementing policies to address these challenges, with the number of critical policies nearly doubling since 2020 compared to the previous two decades [8] - These measures include strategic planning, domestic processing mandates, export controls, and incentives for exploration, recycling, and refining [8] U.S. Policy Initiatives - The U.S. government is actively seeking deals to ensure direct access to critical minerals and reduce reliance on foreign supply chains [9][10] - The White House aims to control its own supply chain destiny regarding critical minerals, emphasizing the importance of self-sufficiency [10]