We are entering into a minerals supercyle.
Assets under management in mining ETFs more than doubled in a year to $87 Bn from $37 Bn a year earlier. Capital is now flowing into hard assets from the high valuation tech stocks - implying the early stages of a commodity supercycle.
Governments are leading the way via their own balance sheets which convinced large investors and companies to invest heavily in capacity building right from acquiring mines and refining to end-product manufacturing.
An interesting observations is the focus on utility metals over traditional safe metals. The investments are largely going into industrial metals such as copper, aluminium, and other critical minerals. Gold and silver had their good runs recently but they have found their footing. Critical minerals have just started.
Another point to note is public markets where IPOs have started hitting the floor. Rare Earth Americas, Inc. have filed for IPO with IPO size around $63mn. They plan to invest in their key projects such as Shiloh, Alpha, and Constellation projects in Georgia and Brazil respectively.
Many more to come.
Furnace Japan, a leading mineral processing company has signed an MOU with Milford Mining Company in Utah.
Their individual expertise makes the partnership quite unique.
Milford has a large mining setup in Utah having huge copper, tungsten, and other tailing resources. Furnace on the other hand is one of the most advanced metallurgical company with patented technology.
Furnace has developed pyrometallurgical technology that enables the treatment of hazardous waste streams and recovers precious and critical minerals, thus converting residual materials into environmentally safe, non-polluting slug.
Together, the companies aim to unlock new value from both primary resources and previously discarded materials while significantly reducing environmental impact.
On the policy front, Brazil is coming up with a National Policy for Critical and Strategic Minerals.
One of the key point is around establishing export controls mechanism. The goal is to encourage and control higher value edition within the country and limiting the sale of unprocessed ore to foreign countries.
Brazil wants to incentivise ventures that go beyond extraction and basic processing, with greater participation in stages such as mineral transformation, refining, production of battery-grade inputs, materials for permanent magnets and other higher value-added products.
Another point included in the text is around data sharing. It mandates companies to provide information on volume, destination, final beneficiary, corporate ownership chain, degree of processing, mineral composition and economic use of critical and strategic minerals intended for export.
Governments increasingly want visibility into who controls downstream mineral flows. They know the value lies into processing not just owning mines.
The minerals market is gradually fragmenting into country-specific industrial systems.
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