Boosting returns on Western refined critical metals supply means de-risking investment
XLB•Western nations are seeking ways to build economically viable supply chains for refined critical metals that are less reliant on China, which controls between 44% and 99% of global output across several metals. Proposed measures include price floors, guaranteed offtake and direct government investment.
1. China’s refining lead
Discussions at the International Mining and Resources Conference in Sydney focused on how to turn Western resource endowments into refined metals supply. China controls 99% of refined gallium, 74% of antimony, 81% of molybdenum, 91% of rare earths, 70% of lithium and 44% of copper, data from Visual Capitalist showed.
2. Ways to de-risk projects
The article identifies three approaches to accelerate development: setting a floor price, guaranteeing offtake, and directly investing in mines and processing while subsidising losses until projects become viable. The United States has set a minimum price of $110 per kilogram for neodymium-praseodymium; the price has risen above that floor.
3. Fragmented response
The article says the best approach may vary by project: government ownership stakes may suit metals primarily bought by defence industries, while price floors and offtake agreements may better serve technology and energy-transition industries. It says the United States and European Union show signs of competing rather than coordinating, raising the risk of a fragmented Western response.
