Then the ocean’s metals sat, geologically curious and commercially irrelevant, for the better part of a century.

Cold War capability, and a cover story

What eventually made the abyss reachable was not mineral demand. It was war. From late 1950 the US Navy funded the hydrophone network that became SOSUS, with its first full-size array off Eleuthera in January 1952 and roughly 3,500 staff across twenty facilities by the mid-1970s. Project Mohole’s CUSS I drilled 183 metres of hole in 3,600 metres of water in 1961 and invented dynamic positioning in the process. The Glomar Challenger then drilled 624 sites between 1968 and 1983, paying out pipe to 6,243 metres.

The commercial expectation, though, was seeded by two things. The first was John Mero’s The Mineral Resources of the Sea in 1965, whose estimate of 1.5 trillion tons of Pacific nodules was, as the US Office of Technology Assessment later put it drily, “widely quoted and popularized, thus engendering a common belief… that the deep seabed nodules were a virtually limitless untapped resource”. The second was a lie. When the CIA sent the Hughes Glomar Explorer to raise a Soviet submarine from 5,000 metres in July 1974, at a cost of around US$800 million, the cover story was manganese-nodule mining. A purpose-built ship costing more than US$350 million, apparently financed by a billionaire to harvest nodules, was the most persuasive market signal the industry never had.

Scripps had already mapped the Clarion and Clipperton fracture zones in 1954, and by the early 1970s Horn and colleagues had identified the ground between them, 120° to 155°W, as “unquestionably the best” nodule province on earth. The United States Geological Survey (USGS) put its prime area at roughly 2.5 million square kilometres and published the map series in March 1978.

The first boom, and why it died

Four consortia went at it seriously: Ocean Mining Associates, Ocean Management Inc, Ocean Minerals Company with Lockheed, and the Kennecott group. And they largely cracked the engineering. In summer 1978 OMI lifted more than 600 tonnes of nodules from around 5,250 metres from SEDCO 445 — its own slide deck ended “Proved Technical Feasibility of Ocean Mining!”. That October, OMA raised 550 tonnes in eighteen hours at rates up to 50 tonnes an hour before a pump blade failed, and in February 1979 OMCO ran a successful test from the Glomar Explorer at 4,878 metres.

It died on arithmetic, not on engineering, and not on environmental regulation. The grades were what they are now — OTA’s 1987 figures were 1.22% nickel, 0.99% copper, 0.23% cobalt and 28.8% manganese, essentially the same as the ISA’s modern Clarion-Clipperton averages of 1.25% nickel, 1.08% copper, 0.22% cobalt and 27.1% manganese. What has changed is everything they were competing against.

In 1970 the average copper ore mined on land ran about 1.3% copper; today the global average is nearer 0.62%. In the 1980s the world was mining nickel at average grades near 1% and Congolese copper-cobalt at Kamoto ran 3.50% copper with 0.53% cobalt. And the market was a fraction of today’s. World copper production in 1975 was 7.25 million tonnes against roughly 23 million tonnes of mined copper in 2025; nickel 752,000 tonnes against 3.90 million; cobalt 50,300 tonnes against 310,000. Land was richer, closer and adequate.

Then prices collapsed. Nickel fell from US$2.96 a pound in 1980 to US$1.76 in 1986; cobalt from US$32.83 in 1979 to US$8.56 in 1982; copper from 101 cents to 73 cents, with about a third of US mine production idled. NOAA modelled a three-million-tonne-a-year pioneer venture in 1982 and found it needed some US$1.5 billion of 1980 dollars — over US$6 billion today — for “an unsatisfactory low internal rate of return of approximately seven percent”. Worth noting, because the modern debate assumes otherwise: NOAA’s 1980 cost study found “no real economic penalty for doing deep ocean mining in an environmentally sound manner.”

America built a regime, then handed it over

Congress legislated anyway. The Deep Seabed Hard Mineral Resources Act became Public Law 96-283 on 28 June 1980, giving NOAA authority to issue ten-year exploration licences and commercial recovery permits. NOAA issued four exploration licences in 1984 — USA-1 through USA-4 — and never issued a single commercial recovery permit. Two were relinquished in the late 1990s; Lockheed Martin still holds USA-1 and USA-4, now running to 2 June 2027. Lockheed’s own stated reasons for dormancy, on the record with NOAA, were “conditions in the metals markets” and “the lack of international recognition of the DSHMRA licenses”.

That second reason was the international waters problem. Arvid Pardo’s 1967 speech at the UN and General Assembly Resolution 2749 of 17 December 1970 had made the seabed beyond national jurisdiction the “common heritage of mankind.” The Third UN Conference on the Law of the Sea ran from December 1973, adopted the Convention on 30 April 1982 by 130 votes to 4, and UNCLOS entered into force on 16 November 1994 — creating, that same day, the International Seabed Authority based in Kingston, Jamaica. The ISA administers roughly 54% of the world’s oceans, with an Assembly of all members, a 36-member Council, and a duty under Article 145 to write the environmental rules for exploitation.

The United States did not sign. Reagan’s statements of 29 January and 9 July 1982 set out the objections: mandatory transfer of private technology, production ceilings, a subsidised Enterprise competing with commercial operators, revenue sharing that could reach national liberation movements, a Review Conference amendment procedure that could bind the US without Senate consent, and voting arrangements giving American firms no assured access and the United States no permanent seat on the Council. He noted that the states declining to vote for it “produce more than 60 percent of the world’s gross national product,” and in March 1983 declared that “deep seabed mining remains a lawful exercise of the freedom of the high seas”.

The 1994 Implementation Agreement was written largely to fix exactly those defects. It disapplied mandatory technology transfer and the production limits, stripped the Enterprise back, grandfathered pioneer investors, and made consensus the general rule in the Council with four chambers holding effective vetoes. The US signed it on 29 July 1994 and sent it to the Senate that October as a treaty document. The Senate Foreign Relations Committee voted it out 19–0 in February 2004 and 17–4 in October 2007, held three hearings in 2012 — and it has never again reached the floor.

The scepticism was prescient

Notice what the 1994 fix did not touch: the decision rules. It made them tighter. And that is precisely where the thing has ground to a halt.

Since the first six exploration contracts were signed in 2001, the ISA has issued a total of 31 contracts in force as of 31 January 2026 — 19 for polymetallic nodules, 8 for sulphides, 4 for crusts — held by 21 contractors under 20 sponsoring states, covering 1.445 million square kilometres, or 0.7% of the Area. Exploitation contracts issued in that time: zero. Private companies cannot apply directly. Under UNCLOS Article 153(2)(b), a non-state entity (a company) may explore or exploit in the Area only if it has the nationality of a State Party and is sponsored by that State. The State issues a Certificate of Sponsorship that accompanies the application.

The Mining Code has been in drafting since 2014. A draft went to the Council in July 2019 and has gone back to council and failed at almost every meeting since. A road map adopted in 2023 targeted adoption in 2025 and missed it. Second reading finished in July 2025. In March 2026 the Council worked through 29 of 32 outstanding issues, and in July 2026 it again failed to adopt, deferring to March 2027 while extending Nauru Ocean Resources’ exploration contract by five years.

This is not incompetence and it is not ignorance. The ISA has a serviceable technical framework and, after a quarter-century of contractor baseline work, a serious evidence base: 255 contractor research cruises since 2001, and a DeepData repository exceeding 10 terabytes holding some 89,000 occurrence records. One correction worth making, because the number circulates: the 200,000 figure often cited is DeepData’s count of species observations, not peer-reviewed papers. There were roughly 1,935 deep-sea-mining publications in the whole literature between 1968 and 2021, and there have been many published in the last 5 years as well. The point stands regardless: the data exists and it is public.

What blocks adoption is the consensus architecture Reagan’s negotiators warned about. Article 161(8) defines consensus as the “absence of any formal objection,” and the 1994 chambers hand small groups a veto. Around that structure has grown a permanent campaign: 46 states (most of which have zero vested interests in deep sea mining) now back a moratorium or pause, the Deep Sea Conservation Coalition supporting a global moratorium claims over 140 member organizations, 64 companies and financial institutions have signed its business statement, and the ISA has accredited 129 observers of which 67 are anti deep sea mining focused NGOs. The ISA itself has had to run a public fact-check page, and in February 2024 its then Secretary-General wrote to the Convention on Migratory Species calling a COP document “seriously flawed,” with “numerous factual (and legal) errors,” noting that “almost half of the references cited are to materials published by anti-deep-seabed mining campaign groups”. The dark-oxygen affair followed the same pattern: a striking Nature Geoscience claim, a detailed industry rebuttal alleging an unreported nodule-free control in which oxygen also rose, and independent scientists publicly unconvinced.

Nauru triggered the two-year rule on 25 June 2021. The “two-year rule” is a 1994 UNCLOS implementing-agreement provision to force a deadline on ISA exploitation regulations. The clock ran out on 9 July 2023 with the rules unfinished. Three years on, there is still no mining code.

Re-enter the United States

Meanwhile the strategic case inverted. Cobalt is 73% Congolese; China refines roughly 48% of the world’s copper and holds a top-refiner share of about 72% across critical minerals, with the IEA warning of a 25% copper deficit by 2035. The 2025 US critical minerals list runs to 60 entries and added copper, nickel manganese and cobalt were already there. And the resource is not marginal: USGS puts the Clarion-Clipperton Zone at 21.1 billion dry tons of nodules, with ISA modelling implying on the order of 6,000–8,700 million tonnes of manganese, 270–393 million tonnes of nickel and 46–68 million tonnes of cobalt — multiples of terrestrial reserves for all three.

The technology also stopped being hypothetical. Allseas’ Hidden Gem lifted more than 3,000 tonnes of nodules from beyond 4 kilometres in 2022 through a 4.3-kilometre riser, and in May 2026 signed a production contract for 3.0 million wet tonnes a year with commissioning targeted for Q4 2027. China ran its Kaituo 2 collector at about 4,100 metres in 2024 and put a Clarion-Clipperton collector test at 5,000–5,500 metres before the ISA’s technical commission; Japan recovered rare-earth mud from near 6,000 metres off Minamitorishima in early 2026.

So the United States did the obvious thing: it woke up the statute it never repealed. Executive Order 14285, “Unleashing America’s Offshore Critical Minerals and Resources,” signed 24 April 2025, directed NOAA to expedite DSHMRA licences and permits within 60 days. NOAA proposed its rule on 7 July 2025 and published the final rule on 21 January 2026, creating a consolidated licence-and-permit pathway.

The Metals Company who had triggered the 2 year rule with Nauru jumped first, and for a rational reason: it had spent hundreds of millions inside a system that could not tell it when, or whether, it would ever be allowed to mine. TMC USA filed two exploration applications and a commercial recovery permit application on 29 April 2025, then a consolidated application over roughly 65,000 square kilometres in January 2026; NOAA certified a second licence area of about 122,000 square kilometres in May 2026, and the consolidated application went to public comment on 19 August 2026, with a hearing set for 13 October. TMC guides to a permit before the end of Q1 2027.

It is no longer alone. NOAA reported more than ten applications by late January 2026, with exploration applications publicly noticed from TMC USA, American Metal Resources, SeaX and American Deep Sea Minerals; Deep Sea Rare Minerals filed in August 2025; American Ocean Minerals reached substantial compliance on a 147,054-square-kilometre area in July 2026 and announced a US$1 billion merger with Odyssey Marine in April. Separately, BOEM has scheduled a lease sale for two blocks off American Samoa on 19 November 2026. Within 200 mile national limits countries like the Cook Islands, Japan and America, are able to exploit their own resources under national rules.

The ISA’s choice

The Authority’s response has been legal rather than regulatory. Secretary-General Leticia Reis de Carvalho declared on 30 April 2025 that “no State has the right to unilaterally exploit the mineral resources of the Area outside the legal framework established by UNCLOS,” and that “this prohibition is binding on all States, including those that have not ratified UNCLOS”. In July 2025 the Council invoked Article 139 and demanded information from contractors at risk of non-compliance. NORI and TOML took the ISA to the Seabed Disputes Chamber in May 2026 and obtained provisional measures on 18 July; the Secretary-General has now put three questions on Article 137 and non-recognition to ITLOS.

The strategy is to make the metal untradeable — as one legal commentary puts it, “a robust non-recognition obligation, applied to mineral supply chains, could render mining under” the US statute “commercially unviable”. Which, from Washington’s point of view, is not a threat at all. If treaty parties are legally discouraged from refining American nodules, the refining happens in the United States. That was the industrial policy objective in the first place and exactly what America wants.

Forty-four years after Reagan refused to sign, the specific defect he identified, a governance structure in which any determined minority can prevent a decision indefinitely, has produced exactly the outcome he predicted. The ISA holds 1.445 million square kilometres of the world’s largest untapped supply of nickel, cobalt and manganese, twelve years of drafting, a quarter-century of environmental data, and no way to say yes. Its contractors have begun to notice that somebody else can.

The International Seabed Authority still has the better claim to legitimacy, and a code adopted in March 2027 would restore most of its authority overnight. But that window is narrowing, and it is closing not because the science is unsettled or the engineering unproven, but because a body designed to require unanimity was handed a decision that will never command it. Read the tea leaves, or become a registry of permissions nobody waits for. I predict that if the ISA fails to adopt legislation in 2027, companies that have spent hundreds of millions developing deep sea mining licenses will follow TMC out the door because their shareholders will give them no choice.

Canada exports roughly $380–410 billion of goods to the United States every year, representing about 72% of Canada’s total global merchandise exports.

The US exports around $330 billion of goods to Canada, representing roughly 15% of total US goods exports.

That asymmetry matters.

The new 50% tariffs apply to only around $20 billion USD of Canadian exports to the US — roughly 5% of the bilateral flow.

And look carefully at what they don’t target.

Potash. Energy. Critical minerals.

In other words, many of the things America currently wants and needs from Canada.

Instead, the pressure is concentrated on areas where America already produces domestically — or explicitly wants to produce more itself — including automobiles and parts, steel, aluminium and dairy products.

That is not accidental these tariffs were very carefully chosen to make a point.

For the United States, these tariffs are a drop in the bucket relative to the size of its economy and trade flows. They are targeted at goods America can produce domestically. For Canada, however, the message is much more uncomfortable.

The United States is vastly more important to Canada as an export market than Canada is to the United States.

And Canada needs to take better care of that relationship.

Mark Carney’s response typifies the Canadian political narrative: diversify trade, reduce dependence on America, assert Canadian economic independence.

There is just one rather large problem with that argument.

Who is going to buy all of it?

India, China and Europe don’t suddenly need hundreds of billions of dollars of Canadian cars, steel, aluminium and dairy products, in fact they actively produce all these things and are actively trying to sell them to Canada and the USA.

There is a reason Canada sends so much to the United States. It isn’t because Canadian exporters spent the last 75 years lazily refusing to find another customer.

It’s geography, freight economics and deeply integrated North American supply chains.

The United States is Canada’s natural market for an enormous amount of what Canada produces.

And this wake-up call comes with a timer.

Where America is dependent on Canada — potash, energy and critical minerals — the US is working aggressively to eradicate those dependencies.

Companies such as American Critical Minerals (KCLI) are a great example of this, developing a lithium and potash project in Utah. I don’t say this to specifically endorse them but rather show them as one example among hundreds of projects being advanced as America pours government support into rebuilding domestic mineral and industrial supply chains. American has clearly mapped out its supply chains for every industry, and is actively re building them to provide independence not just in a time of war, but also in trade disputes. The Canadian press abounds with stories of how dependent American farmers are on Canadian potash, and that is true, today, but that doesn’t mean it will be true forever.

The objective is increasingly clear:

Make imports optional, not necessary.

That is what has changed since I wrote this article.

America’s tariff strategy increasingly demonstrates that Washington understands the difference between imports it can pressure, imports it wants to replace, and imports it cannot afford to disrupt — yet.

That is precisely why blanket tariffs fall short.

And it is why Canadian bravado about simply “diversifying” away from its largest customer is largely hot air.

Canada needs a better trading relationship with the United States while it still possesses commodities and supply chains America genuinely needs.

Because if Washington succeeds in making those Canadian imports optional, Canada will ultimately have far more to lose from the deterioration of this relationship than America does.

My original argument on why tariffs need to account for minerals, industrial capacity and strategic dependency is here 👇

Increasingly, that argument no longer needs to be made.

Governments, manufacturers and investors now broadly recognise that minerals underpin the modern economy. They are essential to electricity networks, energy generation, transport, semiconductors, telecommunications, data centres, advanced manufacturing and the technologies associated with the energy transition.

But within the increasingly long lists of minerals described as “critical” sits a smaller and rather different category.

Defence critical minerals.

They overlap with the minerals required by civilian industry, but the reason they are critical is different.

A shortage of copper can constrain electricity grids and industrial development. A shortage of lithium can disrupt battery manufacturing. A shortage of gallium, germanium, tungsten or certain rare earth elements can do something more immediate:

it can constrain a country’s ability to manufacture, maintain or replenish the systems required to defend itself.

That makes defence criticality a particular form of national-security risk—and one that arguably requires a different policy response.

Critical for what?

The word critical is sometimes used as though it describes an intrinsic characteristic of a mineral.

It doesn’t.

A mineral becomes critical because two things intersect:

how important it is to something we need, and how vulnerable its supply is to disruption.

Change either variable and criticality changes.

That means there is no single universal critical-minerals list. A mineral can be critical to an electricity system, an automotive industry, semiconductor manufacturing—or defence.

Defence adds another dimension because military systems frequently require materials with highly specialised physical properties: extreme temperature resistance, density, hardness, conductivity, magnetic performance, corrosion resistance or the ability to perform reliably under extraordinary conditions.

Substitution can therefore be difficult, slow or sometimes practically impossible without redesigning the component or system itself.

And unlike many civilian applications, defence cannot necessarily respond to shortage simply by accepting a higher price.

An armed force cannot tell an adversary that delivery of its aircraft, missiles, radar systems or communications equipment has been postponed because a particular processed mineral is unavailable.

The mineral intensity of modern warfare

Modern defence equipment is extraordinarily materials-intensive.

Consider what a contemporary military actually operates.

Fighter aircraft. Submarines. Destroyers. Armoured vehicles. Satellites. Drones. Radar. Sonar. Secure communications. Electronic warfare systems. Missile-defence systems. Precision-guided munitions. Night vision. Jet engines. Batteries. Advanced computing. Hypersonic systems.

Behind each is a complex chain of metals, alloys, magnets, semiconductors, ceramics and specialist materials.

The US Department of Defense has said that critical minerals are used in virtually every DoD system, from unmanned aircraft and fighter jets to submarines.

This is why looking only at tonnes of mineral demand can be misleading.

Defence consumption may be relatively small compared with the automotive, construction or energy sectors. But strategic importance is not proportional to volume.

A few kilograms of an obscure material can potentially determine whether a system worth millions—or billions—can be produced.

That is the peculiar economics of defence minerals.

So what are the defence critical minerals?

There is no single immutable list.

NATO’s December 2024 list of defence-critical raw materials included:

aluminium, beryllium, cobalt, gallium, germanium, graphite, lithium, manganese, platinum-group materials, rare earth elements, titanium and tungsten.

Other US assessments include materials such as antimony, tantalum, scandium, indium and bismuth.

The precise list matters less than understanding why particular minerals repeatedly appear on it.

Rare earth elements

Rare earths perform multiple specialised functions across defence systems.

Neodymium, praseodymium, dysprosium and terbium are important in high-performance permanent magnets. Other rare earths have applications in radar, sonar, lasers, sensors, communications, guidance and electronic systems.

Gallium

Gallium is a perfect example of why defence criticality can have little relationship with the size of a commodity market.

It is produced in relatively small quantities, frequently as a by-product, but gallium-based semiconductors have important applications in high-frequency and high-power electronics, including radar, communications and electronic warfare.

Germanium

Germanium’s optical and semiconductor properties make it important for infrared technologies, sensors and other advanced electronic applications.

Tungsten

Tungsten has the highest melting point of any pure metal and exceptional density and hardness.

Those properties explain its use in specialist alloys, aerospace applications and military systems, including penetrators and other high-performance components.

Antimony

Antimony receives remarkably little public attention relative to its strategic importance.

Its applications include flame retardants, alloys, ammunition, explosives, electronics and infrared technologies and specialised solar performance applications.

Beryllium

Beryllium combines extremely low weight with stiffness, dimensional stability and heat-management properties.

Those characteristics make it valuable in aerospace, satellite, targeting and other high-performance defence applications.

Cobalt

The popular conversation about cobalt has been dominated by batteries.

Defence tells another story.

Cobalt is important in high-temperature superalloys used in aerospace and turbine applications because it can help materials retain strength under extraordinary temperatures and stresses.

Titanium

Titanium’s combination of strength, low weight and corrosion resistance makes it extraordinarily useful in aerospace, naval and other defence applications.

Tantalum

Tantalum combines corrosion resistance, high-temperature performance and exceptional properties for electronic capacitors.

It consequently appears in aerospace, communications, guidance and other sophisticated electronic systems where reliability is paramount.

The real vulnerability is often not the mine

This is perhaps the most important lesson we have learned since critical minerals first entered mainstream political discussion.

A mineral supply chain is not a mine.

It is:

Mine → concentrate → process → separate → refine → metal/alloy/material → component → defence system.

Possessing mineral resources in the ground does not create defence security if the ore must be exported to another country—potentially a strategic competitor—to become usable.

This is particularly important because China has spent decades developing capacity not merely in mining but in processing, refining and advanced materials.

The result is that Western countries can possess mineral deposits while remaining dependent upon China for the material or component actually required by manufacturers.

That distinction has now moved to the centre of US policy. In 2026, the United States formally concluded through its Section 232 process that dependence on imported processed critical minerals and their derivative products threatens national security.

Defence has another problem: you need it when everybody else does

There is an additional characteristic separating defence mineral security from normal commodity procurement.

Wars create demand shocks.

Munitions are consumed. Aircraft require maintenance. Equipment is lost. Stockpiles have to be replenished. Manufacturing rates increase.

At precisely the moment when access becomes most important, international supply chains may simultaneously become least reliable.

Trade routes can be interrupted.

Export controls can be imposed.

Governments can prioritise domestic consumers.

Commercial inventories can disappear.

And strategic competitors controlling parts of the supply chain gain considerable leverage.

This changes the appropriate definition of security.

For ordinary industry, an efficient supply chain may be one that delivers material at the lowest possible cost.

For defence, the cheapest supply chain is not necessarily the most secure.

Redundancy has value. Inventory has value. Spare processing capacity has value. Domestic production has value. Allied production has value.

In normal commercial analysis these can look inefficient.

In national-security analysis they can look like insurance.

Critical minerals have become instruments of statecraft

This is no longer theoretical.

Export restrictions on gallium, germanium and other strategic materials have demonstrated that mineral supply chains can be used as instruments of geopolitical leverage.

The lesson is uncomfortable but straightforward.

If a potential adversary controls a material, processing technology or component required to manufacture your defence systems, the supply chain itself becomes a strategic vulnerability.

And this vulnerability extends far beyond the raw mineral.

A country can diversify mining while remaining dependent upon a single jurisdiction for separation.

It can diversify refining while remaining dependent upon another country for specialised components.

It can refine and manufacture domestically while relying upon foreign precursor chemicals, specialist equipment or intellectual property.

Defence mineral security therefore has to be measured from geology all the way to the finished defence system.

Stockpiles matter—but they are not enough

Governments have understood strategic stockpiling for generations. (Although the Clinton administration began the dismantling of America’s stockpiles because they deemed them no longer required and only under the first Trump administration were they re started from a drastically low point, but that is a story for another day.)

The logic is obvious: if supply might be interrupted during a crisis, hold enough inventory to bridge the disruption.

That remains important.

But a warehouse full of material cannot substitute for industrial capacity.

If a country lacks the facilities, expertise, equipment and workforce required to convert mineral feedstock into defence-grade materials and components, the stockpile is redundant..

The historical lesson is that mineral security requires both inventory and productive capacity.

And that capacity cannot necessarily be switched on after a crisis begins.

Mines, processing plants, component and defence manufacturing can take a decade or more to develop.

Entire industrial ecosystems have to exist before they are urgently required.

Defence critical minerals therefore need a different strategy

This is where I think the distinction between critical minerals and defence critical minerals becomes genuinely useful.

Critical-minerals policy broadly seeks resilience.

Defence-minerals policy seek assurance.

That means asking a harder set of questions.

1. What materials are actually required?

Governments need granular visibility into the minerals, processed materials and components embedded in defence systems—not simply broad national commodity statistics.

2. Where are the real single points of failure?

The vulnerability may be the mine.

But it may equally be a separator, refinery, alloy producer, magnet manufacturer, chemical precursor or specialist component supplier.

3. How much material is required under wartime rather than peacetime conditions?

Strategic planning based solely on normal annual consumption misses the entire purpose of defence preparedness.

4. What should be stockpiled?

In some cases the correct strategic inventory may be ore or metal.

In others it may make far more sense to stockpile processed materials, alloys, magnets or even finished components.

5. Which capabilities must exist domestically?

Absolute mineral independence is neither realistic nor necessarily desirable.

But some capabilities may be too important to outsource completely.

6. Which supplies can be secured through allies?

Allied jurisdictions often collectively possess enormous geological, processing, technological and manufacturing capabilities. Defence mineral security realistically needs to be designed as an allied industrial system rather than a collection of entirely independent national supply chains.

7. How do governments keep strategically necessary capacity alive?

This may require long-term offtake agreements, minimum prices, procurement guarantees, strategic equity investments, concessional finance or contracts for reserve capacity.

The cheapest tonne is no longer necessarily the best tonne

For thirty years, globalisation rewarded efficiency.

Minerals were sourced where they could be produced and processed most cheaply. Manufacturing migrated towards the most competitive industrial ecosystems. Inventories shrank. Just-in-time supply chains proliferated.

Economically, much of this made perfect sense.

Strategically, it created dependencies that governments are now discovering are extremely difficult to unwind.

Defence critical minerals expose the flaw most clearly.

If the lowest-cost producer is also a strategic competitor, price cannot be the only criterion.

The relevant calculation becomes: What is the value of assured access during a crisis?

Once that question is asked, apparently “expensive” domestic or allied capacity begins to look rather different.

From mineral security to industrial security

This is ultimately why I think defence critical minerals deserve to be considered separately.

They demonstrate that mineral security is not really about minerals at all.

It is about capability.

Having lithium without battery manufacturing is of limited strategic value.

Having rare-earth ore without separation and magnet capacity leaves a vulnerability.

Having titanium resources without the ability to produce qualified aerospace material does not secure an aircraft supply chain.

And having strategic stockpiles without factories capable of converting those materials into equipment provides only temporary protection.

The defence-minerals question therefore forces governments to look beyond geology towards the entire industrial ecosystem:

Resources → processing → materials → components → manufacturing → military capability.

Break any sufficiently important link and the system can stop.

The next phase of the critical-minerals story

When I first started writing about critical minerals, one of the biggest challenges was persuading people that these obscure materials mattered.

That argument increasingly feels settled.

The more interesting discussion now is what happens next.

Not all critical minerals are critical for the same reason.

Not all supply disruptions have the same consequences.

And not every mineral therefore requires the same policy response.

For defence critical minerals, the objective cannot simply be diversified commercial supply.

It must be the ability to obtain the necessary material, in the necessary form, in the necessary quantity, even when normal markets and normal trading relationships are no longer functioning normally.

That requires mines.

But it also requires processing, refining, metallurgy, manufacturing, stockpiles, long-term procurement, allied cooperation and deliberate redundancy.

For decades, those things were often regarded as inefficient.

In an increasingly contested world, we may discover that they have another name:

national security.

The uncomfortable conclusion: a military is only as strong as its supply chain

Which brings us to a rather uncomfortable conclusion.

A military that cannot secure the supply chains required to sustain itself in a conflict is not truly war-ready.

You can have the aircraft.

You can have the submarines.

You can have the missiles, drones, radar systems, satellites and sophisticated weapons platforms.

You can spend 3%, 4% or 5% of GDP on defence.

But if you cannot replace what is destroyed, replenish what is consumed, repair what is damaged and dramatically increase production once a conflict begins, eventually your military capability becomes constrained by your industrial capability.

Russia’s invasion of Ukraine has provided the world with an uncomfortable real-time demonstration of this.

Russia reorganised significant parts of its economy around wartime production, expanded defence manufacturing and found alternative international suppliers when domestic capacity was insufficient. Whatever one’s view of Russia or the war, the industrial lesson should be studied very carefully.

Modern war consumes equipment and munitions at extraordinary rates.

Peacetime production is therefore almost irrelevant to the ultimate test.

The important question is:

How quickly can you scale?

Can you produce twice as much?

Five times as much?

Ten times as much?

And can you continue doing it if international trade is disrupted, shipping routes become contested and the countries supplying your critical inputs are no longer willing—or able—to sell them to you?

A weapons stockpile is not a wartime supply chain

This distinction is fundamental.

A country can enter a conflict with substantial inventories of weapons and still have a profoundly vulnerable defence system.

Stockpiles buy time.

Industrial capacity determines what happens when the stockpiles begin to run out.

That means military readiness cannot simply be measured by the number of aircraft, missiles, ships or armoured vehicles available on day one.

It must also consider what can be produced on day 100, day 500 and, if necessary, year five.

And that production capability has to be traced backwards.

A missile requires components.

Those components require specialist materials.

Those materials require metals, alloys, magnets, semiconductors and chemicals.

Those require refining and processing.

And all of them ultimately require secure access to raw materials.

Mine → processing → refining → material → component → weapon system → replenishment.

Every link matters.

Break one sufficiently important link and eventually you constrain the entire system.

China understands this

China’s military-civil fusion strategy is particularly important in this context because it rejects the comfortable Western assumption that civilian industry and military capability can be considered separately.

Industrial capability, technological capability and military capability are interconnected.

So are minerals.

China’s extraordinary position across mining, mineral processing, refining, rare-earth separation, magnets, battery materials, metals and manufacturing should therefore not be viewed simply as an economic achievement.

It creates strategic capability….and a credible threat.

The United States understands this too.

That helps explain why the Department of Defense is investing directly in mineral and processing capacity, why governments are rebuilding stockpiles and why critical-mineral security has migrated from obscure geological policy into defence and national-security policy.

But much of the world still appears to treat minerals as a political or industrial policy issue rather than a fundamental component of military preparedness.

That is dangerous.

What does war readiness actually mean?

Every defence ministry should now be asking a brutally simple question about every critical military system:

Can we continue producing this during a major, prolonged conflict?

Not can we buy it today?

Not do we have a supplier?

Not even do we have several suppliers?

Can we manufacture it when the international system is under maximum stress?

That requires knowing every strategically important material and component embedded within the system.

Where is it mined?

Where is it processed?

Who refines it?

Who produces the alloy, magnet, semiconductor or specialist material?

Where are the components manufactured?

How much inventory exists?

Which countries control each stage?

Where are the single points of failure?

Which suppliers are ultimately dependent upon China or another potential adversary several tiers further down the supply chain?

And most importantly:

What happens when production has to increase five- or ten-fold?

If the answer is we don’t know, that itself is a defence vulnerability.

Every military system needs a critical-mineral supply-chain strategy

This leads me to what should now be an extremely simple proposition.

Every critical military system should have its own critical-mineral and strategic-material supply-chain strategy.

Fighter aircraft.

Air-defence systems.

Submarines.

Drones.

Missiles.

Satellites.

Radar.

Electronic warfare.

Communications.

Armoured vehicles.

Naval systems.

It is no longer sufficient to maintain a national list of critical minerals and assume that this constitutes mineral security.

Governments need to map critical materials against actual military capabilities.

For every major system they should know the materials required, the quantities required under normal and surge production, the location of each processing step, the available inventories and the time required to replace lost supply.

Then they need contingencies.

Alternative mines.

Alternative processors.

Alternative refiners.

Alternative component manufacturers.

Strategic inventories.

Allied capacity.

Substitution where technically possible.

And sufficient spare industrial capacity to expand production rapidly.

Some of this will look economically inefficient.

That is precisely the point.

Insurance looks inefficient until the house catches fire.

The best defence is industrial preparedness

For decades, defence planning concentrated heavily on the sophistication of weapons systems.

But technological superiority means surprisingly little if those systems cannot be produced at sufficient scale.

A £100 million aircraft that cannot fly because a replacement component containing a few thousand pounds’ worth of strategically unavailable material cannot be manufactured is not a £100 million military asset.

It is an extraordinarily expensive piece of machinery sitting on the ground.

This is the uncomfortable reality of modern warfare.

Military power rests on industrial power.

Industrial power rests on manufacturing.

Manufacturing rests on materials.

And materials ultimately rest on secure mineral supply chains.

The implication is unavoidable.

A country that cannot secure and scale the supply chains underpinning its military is vulnerable.

And an adversary that knows where those vulnerabilities sit does not necessarily have to defeat every weapons system.

It may only have to disrupt the supply chains that keep those systems operating.

That is why critical minerals are no longer simply an economic, industrial or energy-security issue.

They are part of deterrence itself.

Every defence ministry, every major defence contractor and every military alliance should therefore be able to answer the same question:

Can we build, repair and replenish our critical military systems at wartime scale without relying on an adversary?

If the answer is no—or worse, if nobody knows the answer—then the military is not as prepared as its headline spending, equipment inventories or technological sophistication suggest.

The lesson for the militaries of the world is simple:

Map it. Secure it. Stockpile it. Build it. And make sure you can scale it before you need to.

Because when war begins, discovering that your supply chain cannot fight with you is already too late.

The core claim was clear: months of high-intensity operations against Iran, on top of earlier Ukraine aid and other drawdowns, had burned through large numbers of expensive precision munitions and interceptors. Reporting cited 1,000–1,500 Patriot interceptors expended (leaving inventories near or under 1,700), Tomahawks used at multiples of annual procurement rates, “virtually all” of certain ATACMS/PrSM long-range stocks, plus heavy draws on JASSM-ER and THAAD. Production could not keep pace—these systems take years to build because of complex supply chains, specialised components and limited lines. The result, according to the coverage, was reduced readiness in other theatres, delayed deliveries to partners, private alarm inside government, and real constraints on U.S. options in Iran, including hesitation over further escalation.

The global press quickly picked it up, and a wave of pundits and analysts began catastrophizing the implications.

Reuters led with the claim that the U.S. Army had used “virtually all” of its long-range precision strike missiles during the Iran war, raising alarms about readiness for future conflicts.

CNN reported that key air-defence inventories—Patriot interceptors down by roughly two-thirds in some estimates and that THAAD was “severely depleted,” warning that the shortages could constrain U.S. options on other fronts and elevate risk in the Indo-Pacific.

The Atlantic framed it starkly: “The United States is running out of missiles… stockpiles of long-range weapons are so low… that they don’t believe the U.S. has enough to combat a threat in Asia,” with remaining supplies in some categories “as low as 20 percent of what the Pentagon would like.”

On Washington Week, Jeffrey Goldberg of The Atlantic declared that war planners in Moscow, Beijing, and Pyongyang were watching “with a kind of happy disbelief,” asking how America had allowed this to happen against a “third-tier adversary.”

CSIS experts amplified the doom. Mark Cancian repeatedly noted that replenishing certain systems could take one to five years and that continued fighting risked creating a “new, higher level of risk” with China or even North Korea. Tom Karako of CSIS called the drawdown a “generational annihilation of the means of conventional deterrence,” arguing it would inevitably shape the decision calculus in Moscow and Beijing for years: “They may do something quite deliberate and at the time of their choosing, because keep in mind—we’re going to take years to reconstitute.”

Russian pro-war commentators openly celebrated the news, predicting fewer precision weapons would reach Ukraine, while Chinese military observers highlighted the exposed “munitions weak spot” as a critical vulnerability against stronger adversaries.

The narrative hardened quickly into a near-consensus that America’s conventional deterrent had been hollowed out in a secondary theatre, with cascading risks for the great-power competitions that matter most.

I am no military-readiness expert. I am a supply-chain specialist whose work feeds directly into defence production—and I do not share the extreme pessimism.

For the sake of good order lets discuss how defence supply chains work:

1. Mine & Concentrate
Raw ore is extracted from the ground. For defence applications this means mining critical inputs such as rare earths, titanium, tungsten, antimony, gallium-bearing materials, graphite and many others. Mining is capital-intensive, heavily regulated and slow to scale. The ore is then crushed, ground and processed (flotation, magnetic separation, leaching) into a mineral concentrate with a much higher percentage of the desired elements. Concentration is usually done near the mine. This stage occurs worldwide.

2. Refine (separate / process)
The concentrate is chemically treated to produce high-purity forms of the critical minerals. For rare earths this is a complex solvent-extraction process that yields individual oxides such as neodymium, dysprosium, terbium or samarium. Similar steps produce titanium sponge, refined tungsten, high-purity gallium and other defence-grade metals. This is the classic chokepoint. China performs the large majority (commonly 85–90 %+) of global rare-earth separation and refining, with comparable dominance in gallium, germanium, antimony and tungsten. Capacity outside China remains limited, expensive and still ramping up. Defence-grade material demands even higher purity and tighter impurity controls than commercial grades.

3. Alloy
The refined metals or oxides are reduced to pure metals and then alloyed. Classic examples include neodymium-iron-boron (NdFeB) or samarium-cobalt (SmCo) alloys for permanent magnets, high-temperature nickel or titanium alloys for airframes and engines, and specialised steels or composites. China again dominates magnet-alloy production. A handful of non-Chinese facilities exist or are being built, but volumes remain small. Defence alloys must meet exacting specifications for temperature resistance, corrosion, magnetic strength and long-term reliability.

4. Parts
The alloys and other materials are turned into discrete parts: permanent magnets, specialised fasteners, precision-machined housings, circuit boards, sensors, actuators, rocket-motor casings, warhead components and more. Many of these parts are made by specialised suppliers, some of them small or sole source. Magnets go into electric motors, fin actuators, guidance systems and seeker heads. Qualification for defence use is rigorous and time-consuming.

5. Components
Parts are assembled into higher-level components or sub-assemblies: complete guidance and control units, seekers, propulsion sections, warheads, power supplies, data links and so on. These are usually produced by Tier-1 or Tier-2 defence contractors under strict configuration control. A single missile may contain dozens of such components, many of which still rely on the upstream critical-mineral chain.

6. Systems
Components are integrated into complete functional systems—air-defence interceptors (Patriot, THAAD), cruise missiles (Tomahawk, JASSM), ballistic missiles (ATACMS/PrSM), or the larger platforms that carry them. Integration includes software, testing, calibration and environmental qualification. At this stage the work is performed almost entirely by prime contractors (Lockheed Martin, RTX/Raytheon, etc.) in secure facilities. Lead times lengthen dramatically because of testing regimes, limited production lines and the need to certify every change.

7. Weapon
The finished system is accepted by the military, stockpiled and made available for use. This includes final packaging, controlled storage and logistical support. Only after every previous stage is complete does a usable weapon exist.

Defence supply chains for advanced munitions and weapons systems are long, multi-stage, and highly specialised. They stretch from the ground to the finished weapon, with each step adding complexity, purity requirements, and vulnerability. Only after all previous stages are complete does a usable weapon exist. Replenishing a depleted stockpile therefore requires the entire chain to function at higher volume—an inherently multi-year process for the most sophisticated munitions. In short, a modern precision missile is the product of a long industrial sequence that begins in a mine and ends on a launch rail. Disruption or capacity limits at any stage cascade all the way to the finished weapon.

It is true that the United States entered 2026 already strained. After largely shouldering the burden of supplying Ukraine with advanced munitions since 2022. And supporting Israel during the 12-day war of 2025, although it should be stated that Israel has a significant independent defence production and procurement systems.

It is also true that normal defence procurement for these systems has been modest recently relative to wartime consumption. The Biden administration increased procurement post Ukraine, but they did not raise it to levels that are commensurate with the raised level of global threats that the DOD and NATO recommended.

Recent annual rates have often been in the low hundreds (or lower) for systems like Tomahawks, historically well under 100–200, and around 500–650 for Patriot PAC-3 MSE variants, with longer lead times. Building individual high-end missiles typically involves multi-year timelines once contracts are placed commonly stated at 18-36 months, because of specialized components, testing, and limited industrial capacity. That does not mean the shortfall is frozen in place or that replacement must take a rigid two-to-three years with no acceleration, it just the pace that was accepted in the last 20 years of relative peace.

The Department of Defense and industry partners have been actively working to expand and fast-track production—raising capacity targets substantially (for example, aiming to move Patriot output toward 2,000 per year, and similar multi-fold increases for Tomahawks and others. New contracts, multiyear funding pushes, facility expansions, and prioritization are underway. Ordering today does not produce missiles in a few months, but neither does the process lock the United States into the slowest peacetime cadence. Evidence points to meaningful ramp-ups already in motion.

The elephant in the room is the critical-minerals and specialized-parts supply chain—particularly for things like rare-earth permanent magnets. Yes, dependence on China is real and severe. China dominates mining of many rare earths, processes the large majority, and produces the overwhelming share of high-performance permanent magnets. Individual components and alloys frequently trace back to Chinese processing.

The United States has been spending aggressively to redomicile mining, processing, magnet manufacturing, and component production for both defence and broader industry. Progress is real but incomplete. In my view, breaking the back of the most acute dependence could take on the order of three years of sustained prioritization; achieving robust, diversified self-sufficiency across the full suite of critical inputs is more likely a decade-scale effort.

Here is the part the pure doom loop often omits: that 3–10-year costly effort to re domicile industrial supply chains is for commercial large scale domestic requirements not defence. Defence is a small fraction of overall critical-minerals demand—frequently estimated well under 5%. Defence departments can and do outbid commercial users for priority access; they also have legal tools (stockpiling, prioritization authorities, and national-security procurement rules) to jump the queue. U.S. net import reliance for rare-earth compounds and metals stood at roughly 67% in recent USGS data. but defence accounts for only a small slice of U.S. rare-earth use—on the order of a couple of percent of total domestic demand in some estimates—though that share is likely to rise with expanded production of missiles, drones, and aircraft.

Even if defence demand triples or quadruples in the next few years, the absolute volumes remain tiny relative to global supply and with a few exceptions can be met withing the small but real US production. Existing U.S. pilot plants, smaller-scale magnet and component manufacturers (many not yet at full commercial scale or profitability), and coordinated prioritization by the Department of Defense can plausibly cover near-term defence needs if procurement is focused and supply is directed.

The United States has poured substantial resources into re-domiciling critical mineral and metal production. At the broader federal level, successive administrations have used tools such as the CHIPS and Science Act, Department of Energy grants, Export-Import Bank lending, and recent multi-billion-dollar packages—totalling several billion dollars in announced investments in 2025–2026 alone—for mining, processing, refining, and magnet manufacturing and specialised alloy projects, alongside workforce and education funding.

The Department of Defense has gone further, treating the issue as a core national-security priority. Even 5 years ago teh DoD rarely got involved before stage 5, occasionally 4, but that has changed. Through Defense Production Act Title III authorities, the Office of Strategic Capital, DoD has committed billions in capital for example the landmark $400 million equity stake that made it the largest shareholder in MP Materials in order to build a full mine-to-magnet rare-earth chain as well as dozens of other investment focused on separation, metallization, and parts and component production including prioritised offtake arrangements. These steps are designed to create secure, non-Chinese capacity for the specialised materials that feed into missiles, sensors, aircraft, and other defence systems, even while full commercial and industrial scale independence remains a multi-year effort.

War is clearly changing. Ukraine and Iran are teaching us that we need to prioritize cheaper, faster-to-produce nimbler munitions (including larger numbers of simpler systems) and invest heavily in drones and counter-drone capabilities to address threats like Shahed-style attacks. The missile stockpile shortages and the critical-minerals chokepoints are real. They are not, however, an insurmountable barrier that will derail U.S. strategy or permanently constrain choices against Iran or anyone else. Both the near-term industrial surge and the longer-term supply-chain rebuild are solvable problems. All the evidence shows the Department of Defense and the Trump administration are treating them as such—and moving with urgency. Whether the current wave of catastrophising educates the public or simply emboldens adversaries remains an open question; I hope it is the former.

Every geopolitical crisis produces the same reflex: watch Brent, calculate how many barrels might disappear, look at spare capacity and ask what it means for inflation.

It is understandable. Oil remains the world’s dominant traded energy commodity. It fuels transport, lubricates industry and provides the feedstock for an enormous petrochemical complex.

But looking at the world through an oil-price lens increasingly misses something more important.

Oil is just the biggest and not by much, and while oil does have important by-products, increasingly gas and its by-products and practical applications as an energy source is as important if not more important that oil.

First let me give you the breakdown according to the International Energy Association about global consumption in 2025, it might surprise you:

• Oil / Petroleum: ~29% – 31%

• Coal: ~27%

• Natural Gas: ~24% – 25%

• Hydroelectric Power: ~7%

• Renewables (Solar, Wind, Bioenergy, Geothermal): ~6%

• Nuclear Power: ~4%

  The Relationship between Energy and Materials

Energy produces materials. Materials produce energy. But which form of energy matters. Energy from gas determines where an ever increasing proportion of the worlds aluminium, fertiliser, steel and chemicals can economically be manufactured. Gas processing produces industrial raw materials that mining, agriculture and technology cannot function without.

This is the central argument of The Mineral Imperative: there is no digital economy, energy transition, food system, defence industry or advanced manufacturing economy floating somewhere above the physical world. Everything ultimately rests upon mines, molecules, electricity, processing plants and infrastructure.

The AI revolution is not being powered primarily by solar panels or wind turbines. Today, it is being powered largely by natural gas. More than 40% of the electricity consumed by U.S. data centres comes from gas, and it is expected to remain the largest source of new power for AI infrastructure through the end of the decade

And few commodities demonstrate that interconnectedness better than natural gas.

We tend to regard gas as oil’s cheaper, less glamorous cousin: something we burn for electricity, heating and industrial heat.

That is vastly too simplistic.

Gas generates roughly 22% of global electricity. World consumption is now more than 4.2 trillion cubic metres a year. But even those enormous numbers understate its importance because they count gas primarily as energy rather than as an industrial raw material.

Gas is also the feedstock for fertiliser. It is a source of helium. It produces ethane and natural-gas liquids that feed the plastics industry. Sour-gas processing produces sulphur, which becomes sulphuric acid, one of the most important chemicals in both mining and agriculture. Cheap gas also powers some of the world’s largest aluminium smelters. Gas produces methanol and synthetic fuels. Condensates flow into petrochemical systems.

So a disruption in the gas system does not remain a gas-market disruption.

It can become simultaneously an electricity shock, fertiliser shock, food shock, plastics shock, helium shock (which means a semi conductor shock), aluminium shock and mining-cost shock.

That is why gas, in some respects, may be more strategically important than oil.

Gas is not oil

The gas market is much more complicated than the oil market. The first mistake is assuming that the gas market works like the oil market.

Oil is remarkably fungible. Different crude grades command different prices, but a barrel can be loaded onto a tanker and moved around the world relatively easily. Geography affects freight and refining economics, but an enormous global infrastructure exists to connect producers and consumers.

Gas is fundamentally different.

At ambient temperature methane is an extremely low-density fuel. Moving large quantities therefore requires either a pipeline connecting producer and customer, or an LNG system that cools natural gas to around –162°C, shrinking it to roughly one-six-hundredth of its gaseous volume so it can travel aboard specialised cryogenic ships.

That changes everything.

An oil field with access to a port is potentially connected to the world.

A gas field may be enormous and still economically stranded.

Monetising it can require gas gathering systems, treatment plants, pipelines, compression, multi-billion-dollar liquefaction trains, LNG storage tanks, specialised ships, receiving terminals, re-gasification infrastructure, creditworthy buyers and often twenty-year contracts.

Which is why gas reserves are not the same thing as gas power.

Russia holds roughly 22% of proved global reserves. Iran around 16%. Qatar around 11%. The United States has less than 8%.

Yet America produces roughly a quarter of the world’s gas and became the world’s largest LNG exporter. Iran, despite possessing the world’s second-largest reserves and being its third-largest producer, represents less than 1% of international gas trade.

The geology didn’t determine that outcome.

Infrastructure, capital, technology, contracts and access to markets did.

This is precisely the same lesson the critical-minerals industry repeatedly has to relearn. Owning an orebody does not mean owning a supply chain. A rare-earth deposit without separation capacity is not rare-earth independence. A lithium resource without processing capacity is not battery security.

Likewise, gas in the ground is not necessarily an energy asset.

It is an option on one.

There isn’t really a global gas price

That infrastructure constraint also creates something almost unimaginable in oil: radically different prices for essentially the same molecule.

In early August the source article recorded US Henry Hub at around $2.77/MMBtu, Dutch TTF at approximately $18 and Asian JKM around $22.

The same methane was therefore worth approximately eight times as much in Asia as in the United States.

That price differential explains a huge amount of the industrial geography of the world.

Where gas is abundant and difficult to export, countries have an incentive not merely to sell gas, but to turn cheap molecules into higher-value products.

Which brings us to the part of the gas market that conventional energy analysis frequently overlooks.

The real gas value chain

Think of the global gas economy as several overlapping markets.

At the top is the commodity everyone recognises: natural gas itself.

More than 4.2 trillion cubic metres is consumed annually. Most never enters international trade. It travels through domestic and cross-border pipelines and is consumed in electricity generation, buildings and industry.

Then comes LNG.

Global LNG trade reached roughly 437 million tonnes in 2025, with the United States, Qatar and Australia alone supplying around 62% of exports.

At a representative LNG value of perhaps $10–12/MMBtu, that volume alone corresponds very approximately to $225–275 billion of gas changing hands annually before downstream transformation. It is an indicative commodity value rather than an official market-size statistic—the gas market has no single global benchmark—but it gives a sense of scale.

Then the tree branches.

Because what comes from a gas field is often not simply methane.

Gas processing can separate ethane, propane, butane, condensate, helium and sulphur (which becomes sulphuric acid the worlds most important industrial chemical), while methane itself becomes the feedstock or energy source for ammonia, urea, methanol, hydrogen, synthetic fuels, petrochemicals and metals.

A major Gulf gas development is therefore better understood as an industrial ecosystem built around a hydrocarbon reservoir.

Qatar’s North Field East expansion illustrates this beautifully. Its planned output includes approximately 32.6 million tonnes of LNG annually, but also around 1.5 Mt of ethane, 4 Mt of LPG, 250,000 barrels per day of condensate and 5,000 tonnes of helium.

Calling those outputs “by-products” makes them sound economically incidental.

They aren’t.

They connect natural gas directly into several of the world’s most important supply chains.

Gas feeds the world

Start with fertiliser.

More than 70% of global ammonia production is based on natural-gas steam reforming, consuming around 170 billion cubic metres of gas annually—roughly one-fifth of all industrial gas demand.

Ammonia becomes nitrogen fertiliser, particularly urea. It is am accepted statistic that ammonia by itself grows 50% of the worlds food.

Natural gas is effectively one of the raw materials from which modern agricultural productivity is manufactured.

Cheap gas historically pulled ammonia and urea production towards the Gulf, Russia, Trinidad, Algeria and other gas-rich regions because feedstock economics dominate production costs.

Global ammonia is therefore not merely a chemical market. At typical commodity prices, its annual output represents a market of tens of billions of dollars, while the downstream fertiliser industry is larger again.

But its real value cannot be measured solely in dollars.

Without nitrogen fertiliser, agricultural yields fall.

So gas prices eventually become food prices.

And Gulf sulphur feeds both farms and mines

There is another connection that is even less widely understood.

Sulphur.

Sulphur is recovered in enormous quantities from the desulphurisation of oil and particularly sour natural gas. Much of today’s sulphur supply is therefore not mined deliberately: it exists because the hydrocarbon industry must remove sulphur compounds while processing fuels.

Its overwhelmingly important derivative is sulphuric acid.

The US Geological Survey describes sulphuric acid as one of the most important industrial raw materials in the world and notes that its consumption has historically been regarded as an indicator of industrial development.

That matters enormously from a Mineral Imperative perspective because sulphuric acid connects the gas industry directly to mining and agriculture.

It is used to convert phosphate rock into phosphate fertilisers. Historically, phosphate fertiliser alone has accounted for the majority of sulphur consumption.

But sulphuric acid is also fundamental across the metals industry.

It is used in copper heap leaching and solvent-extraction/electrowinning systems.

It is the core reagent in many nickel laterite HPAL plants.

It is used in uranium processing and in-situ recovery.

It appears across cobalt, zinc and other hydrometallurgical flowsheets.

In other words:

Sulphuric acid 50% of which is derived from sour gas in the Gulf affects over 50% copper nickel cobalt phosphate and uranium production, which affects the entire global battery industry, agricultural industry and nuclear industry, and every industry that uses batteries, food and nuclear energy…...you see where this is going.

Global sulphur production is about 84 million tonnes annually, with nearly half of internationally traded material moving through Hormuz in the disruption examined. Prices reportedly rose from around $173 to more than $530 per tonne during the shock.

At $173/t, 84 Mt represents roughly $15 billion of material.

At $530/t, it represents more than $44 billion.

But again, the nominal market value understates its strategic value because sulphur is the precursor to an acid without which much larger agricultural and mineral markets cannot function economically.

A $15 billion raw-material market can therefore influence hundreds of billions of dollars of downstream production.

That is exactly why looking only at one aspect of a commodity market size can be misleading.

Helium: a tiny market with enormous consequences

Helium demonstrates the same principle even more dramatically.

Helium is not manufactured economically at scale. Commercial supply is largely recovered from particular helium-rich natural gas streams.

World production is only around 190 million cubic metres, and four countries supply approximately 96% of it. Qatar alone accounts for roughly one-third.

The helium market is small compared with oil or LNG.

Its economic importance is not.

Liquid helium enables superconducting MRI magnets, semiconductor fabrication, advanced scientific equipment, fibre optics and aerospace applications.

A semiconductor fabrication plant does not particularly care whether the global helium market is worth $5 billion, $10 billion or $20 billion.

It cares whether helium arrives.

This is the difference between price importance and systems importance.

Critical-minerals analysis has to understand both.

Gas becomes plastics

The link continues into petrochemicals.

Natural gas liquids—particularly ethane—provide exceptionally cheap feedstock for ethylene crackers in the United States and Gulf.

Ethylene becomes polyethylene and countless other chemical products.

That cheap-gas advantage explains why US Gulf Coast and Middle Eastern petrochemical facilities can compete so effectively with European and Asian plants relying more heavily on naphtha.

Again, the hydrocarbon doesn’t necessarily leave the country labelled “natural gas.”

It leaves as resin, packaging, insulation, medical equipment, construction materials, automotive components and consumer products.

The energy has been transformed into material.

Gas also becomes metal

And perhaps nowhere is the relationship between energy and raw materials clearer than aluminium.

Primary aluminium is effectively electricity converted into metal.

Producing one tonne requires roughly 13–15 MWh of electricity, while the industry as a whole consumes around 1,000 TWh annually—about 4% of global electricity demand.

That is why aluminium smelters migrated towards exceptionally cheap and reliable power.

Hydroelectricity created aluminium industries in Canada, Norway and Iceland.

Coal created China’s.

And cheap natural gas created a major Gulf aluminium industry.

Six major Gulf smelters identified in the research are backed by roughly 15 GW of dedicated gas-fired generation. GCC producers made around 6.5 million tonnes of primary aluminium in 2025, close to one-fifth of production outside China.

The broader aluminium semi-finished-products market was estimated at around $265 billion in 2025.

So when a Gulf smelter exports aluminium to Europe, it is in a very real sense exporting natural gas without exporting gas.

Instead of liquefying methane, loading it onto a $200 million LNG carrier and shipping it through a re-gasification terminal, the producer burned the gas domestically, converted the electricity into aluminium and put the energy aboard an ordinary cargo vessel as metal.

Aluminium is an energy carrier masquerading as a raw material.

And that conceptual inversion is important.

The hidden gas exports

Once you see the system this way, national energy statistics become strangely incomplete.

Some gas leaves the Gulf as LNG.

Some becomes fertiliser.

Some becomes helium.

Some leaves Gulf producers as polyethylene.

Some leaves as aluminium.

Some generates electricity consumed domestically.

Some produces sulphur that eventually becomes sulphuric acid and leaches copper, nickel, uranium, and phosphate thousands of kilometres away.

Officially these are entirely different commodity markets.

Physically, they are related branches of the same resource system.

That is what makes today’s obsession with the oil price so inadequate.

Oil remains enormously important.

But Brent tells you surprisingly little about whether a semiconductor manufacturer can obtain helium, whether an Indian farmer will face higher urea prices, whether an Indonesian nickel plant can source sulphuric acid economically, whether the worlds largest fertiliser producers will have to curtail production, or whether a European buyer can obtain Gulf aluminium.

Those markets can be disrupted simultaneously by events originating in the same physical infrastructure.

The 2026 Gulf disruption provided an extraordinary real-world demonstration. LNG was affected, but so were LPG, condensate, helium, naphtha and sulphur. The research and analysis clearly describes one set of attacks severely affecting seven separate commodity markets.

That isn’t an LNG crisis.

It is a raw-materials-system crisis.

This is the Mineral Imperative

The Mineral Imperative is ultimately not about compiling a longer list of metals the world needs.

It is about recognising the physical architecture underneath the global economy.

Energy.

Minerals.

Chemicals.

Infrastructure.

Processing.

Transport.

They are not independent verticals.

They are a network.

Copper needs electricity to be mined, but electricity grids need copper.

Nickel processing can require sulphuric acid, while much of the sulphur required to manufacture that acid is recovered from fossil-fuel processing.

Natural gas produces fertiliser, while agriculture produces biomass increasingly expected to contribute to energy systems.

Cheap gas produces aluminium, while aluminium is essential to electricity transmission, transport and renewable-energy infrastructure.

Helium recovered from natural gas enables semiconductor manufacturing, while semiconductors increasingly control the power systems that produce and transport gas.

The chain loops back on itself again and again.

That is why resource security cannot be understood one commodity at a time.

And why watching oil alone tells us increasingly little about the vulnerability of the industrial system.

Oil is perhaps the world’s most visible commodity.

Natural gas may be one of its most interconnected.

Its true importance is not simply the trillions of cubic metres consumed each year or the hundreds of billions of dollars of LNG traded.

It is the enormous value of everything sitting downstream of it: electricity, food, fertiliser, aluminium, chemicals, plastics, medical technology, semiconductors—and the critical minerals upon which the next industrial era depends.

The lesson is much bigger than gas.

Energy and raw materials run the world.

And the more closely you look, the harder it becomes to tell where one ends and the other begins.

Remember this formula: energy + minerals + processing capacity = industrial power=economic power.

It is the formula for the future.

Part II is about who figured out how to do that, who lost it, who stole it, who weaponised it, and — the part almost nobody in the mainstream press wants to write — who is quietly rebuilding it. Because the honest read of where we are in mid-2026 is not that the West is decades behind. It is that America and Japan already know how to do this, are already doing it, have already funded the businesses that will do more of it, and are three to five years — not thirty — away from meaningful rare-earth independence.

Brownfield beats greenfield. That is the whole argument. Let me show you why.

A Two-Hundred-Year Puzzle: The Science Was Always Ours

Rare earths are a European discovery and an American industry. Both facts have been quietly wiped from the story China now tells about itself.

In 1787, a Swedish army lieutenant called Carl Axel Arrhenius picked up an unusually heavy black rock in a quarry at Ytterby, a village outside Stockholm. He thought it might contain tungsten. He was wrong. The sample went to a Finnish chemist called Johan Gadolin, who in 1792 worked out that roughly 38 percent of its mass was a completely unknown “earth” — an oxide — which was eventually named yttria. Four of the seventeen rare earths — yttrium, ytterbium, terbium, and erbium — take their name from that one village. Gadolinite the mineral itself, and gadolinium, were named for the chemist.

That is where the story begins, and it also foreshadows the problem that would define the industry for the next two centuries. The rare earths sit in a single row at the bottom of the periodic table, they nearly all carry a +3 charge, and their ionic radii differ only very slightly from one neighbour to the next. Which means they behave almost identically in solution. Almost. And the entire commercial rare-earth industry — every single tonne of separated oxide humanity produces — lives inside that “almost.”

Nineteenth-century chemists relied on fractional crystallisation to tease the elements apart. The technique worked, technically, but it was so brutal that one classical separation reportedly required as many as 40,000 discrete operations. It took Americans, working in American national labs on American government contracts, to solve the problem at industrial scale.

At Ames Laboratory in Iowa in the 1940s and 1950s, Frank Spedding — a Manhattan Project veteran — developed ion-exchange displacement chromatography that reached pilot scale by 1953. At Oak Ridge and Argonne through the 1950s, Donald Peppard and Boyd Weaver went further and developed liquid-liquid solvent extraction — a continuous, scalable, exquisitely precise method that runs an aqueous stream and an organic stream in opposite directions through dozens or hundreds of mixer-settler stages, exploiting tiny differences in how each rare earth partitions between the two phases. Every commercial rare-earth separation plant on Earth today, whether it is in Baotou or Mountain Pass, is built on that American mid-century chemistry. This is what Quinton Hennigh meant in our interview when he said the technology is not a mystery, it is not lost, and it is not Chinese: the blueprints are in grandpa’s drawer.

America then did what America used to do with strategic industries. It built the plant. From the early 1950s through the mid-1980s, Mountain Pass in California — operated by Molycorp under Union Oil — was the single most important rare-earth mine in the world, and for much of that period supplied roughly 60 percent of global output. The killer app was europium, the red phosphor that made colour television possible. Former Molycorp CEO Mark Smith put it plainly in an interview: “Every single colour television that was made in the world had europium from the Mountain Pass deposit.” That is the industry America built and then let slip. Not through bad luck. Through choice.

China’s Great Move: Buy the Technology, Then Perfect It at Home

China did not out-innovate the West on rare earths. It out-strategised us. It recognized how important rare earths were to electronic motors and that electronics were at the heart of almost all modern technological innovation. The saw the choke point and how owning it was a strategic advantage. They used patient, state-directed accumulation of tacit capability behind a screen of infant-industry protection, funded by whatever Western partners were naive enough to hand over the keys. Rare earths condense the entire story into a single sector.

Start with the geology, because it matters. China sits on two genuinely world-class rare-earth resource types. Bayan Obo, in Inner Mongolia, was identified as an iron deposit in 1927; its rare-earth content was recognised in 1936. It is now the largest known REE deposit on Earth. Then, in the southern provinces — Jiangxi, Guangdong — China has the ionic-clay deposits the premium source for the heavy rare earths — dysprosium, terbium, europium — that are precisely the ones the West is now scrambling for.

Deng Xiaoping understood exactly what he was sitting on. During his 1992 Southern Tour, he reportedly delivered the line that has since been chiselled onto every rare-earth pitch deck on Earth: “The Middle East has its oil, China has rare earths.” The historian Julie Klinger has rightly cautioned against reading the quote as evidence of a fifty-year masterplan drawn up on a napkin in Yingtan station. But Deng did not need to hand-draft a masterplan. He needed to point at a resource, tell the system it mattered, and let the state machinery he inherited from Mao do the rest. Which is exactly what happened.

The real coup was Magnequench. In 1986, General Motors opened a plant in Anderson, Indiana producing neodymium-iron-boron magnets — the strongest permanent magnets ever invented, co-discovered in 1982 by John Croat at GM and Masato Sagawa at Sumitomo Special Metals in Japan. In 1995, in one of the most staggering acts of strategic self-harm in modern American industrial history, GM sold Magnequench for $70 million to a consortium that included the China National Non-Ferrous Metals Import & Export Corporation and San Huan New Material. Within a few years the Indiana operations had been physically dismantled and shipped to China. Not just the intellectual property. The entire plant. The bonded-magnet know-how. The equipment. The alloy recipes. All of it. Bill Clinton’s administration waved it through under a Committee on Foreign Investment in the United States review that has aged about as well as anything else from that era.

That is the pattern. American technology, American plants, American operators — sold, transferred, replicated, undercut. By the mid-2000s, China was making the magnets. By the late 2000s, it controlled almost all the separated oxides that fed them. By 2010, it was ready to use that position as a weapon.

The 2010 Warning Shot Nobody Heeded

In September 2010, a Chinese fishing trawler rammed a Japanese Coast Guard vessel near the Senkaku/Diaoyu Islands. Japan detained the very drunk captain. China turned it into an international incident and stopped shipping rare earths to Japanese customers. Officially there was no embargo — China has always denied it — but industry could not get 1kg of rare earth metals in any form, prices spiked hard across the entire REE complex, and Japan received an object lesson in what it means to depend on a strategic adversary for the inputs to your entire industrial base.

To Japan’s enormous credit, they did not go back to sleep. They set up JOGMEC as the state vehicle for securing overseas mineral supply. They co-founded Japan Australia Rare Earths with Sojitz, put an initial $259 million into Lynas in Australia, and locked in a supply agreement covering up to 65 percent of Lynas’s heavy rare-earth output. They funded urban mining, recycling, substitution research, and — critically — they kept operating their small legacy separation plants at places like Nippon Yttrium in Kyushu. Japan did not forget how to do this. They stayed in the game at low volume and preserved the operator memory.

The United States, the EU, and Japan also filed a joint WTO complaint. Case DS431 was lodged in March 2012, the panel ruled against China in March 2014, the Appellate Body upheld it in August 2014, and China formally removed the offending export quotas in May 2015. The West won the case and lost the industry. By the time the ink was dry on the ruling, Molycorp — which had IPO’d in 2010 riding the price spike — had gone bankrupt. Prices collapsed on cue. Everyone went back to sleep. Hennigh described this cycle to me almost verbatim: China squeezes, prices spike, Western capital rushes in, China floods the market, prices crater, Western capital dies, and the cycle resets. It has happened twice already. April 2025’s export controls on samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — imposed in retaliation for Trump’s tariff hike — are the third act. This time we cannot afford to fall for it again.

The Argument the Doom-Loop Narrative Keeps Missing: Brownfield Beats Greenfield

Here is where I want to break from the standard commentary, because the standard commentary is wrong. Every op-ed you read about rare earths ends with some variant of “the West is fifteen to twenty years behind and cannot catch up.” That is nonsense. It rests on the assumption that the West is starting from a standing start, and we are not.

America and Japan are not building this industry from scratch. They are turning it back on.

The science is ours. Spedding, Peppard, Weaver — American national laboratories, American publications, American blueprints. The plant chemistry is not proprietary Chinese magic; it is 1950s-and-60s American solvent extraction that has been continuously running at Nippon Yttrium in Japan, at Silmet in Estonia (which Neo Performance Materials inherited from the Molycorp wreckage), and at Mountain Pass itself for decades. The magnet technology is Sumitomo’s and GM’s — Hitachi Metals, now rebranded Proterial, still holds more than 600 NdFeB patents and litigates them aggressively. The deposits are on our side too: Mountain Pass is a producing. Brazil sits on what Hennigh called “the mother of all ionic clay deposits” at Poços de Caldas — probably bigger than anything in China, with cleaner chemistry.

What we lost was not the knowledge. It was the will. And the will is coming back at a speed that would have been unthinkable in 2020.

Look at what has actually happened in the last eighteen months:

· The US Department of Defense took a roughly 15 percent equity stake in MP Materials in July 2025, guaranteed a $110/kg NdPr price floor for a decade, and committed to buy 100 percent of the output from a new 7,000-tonne-per-year magnet plant for its first ten years. $400 million in preferred equity plus a $150 million loan. Apple followed with $500 million prepaid against recycled-magnet supply. JPMorgan and Goldman put in roughly a billion more in commercial financing.

· USA Rare Earth acquired the British metals-and-alloys company Less Common Metals for around $220 million in a deal that closed in November 2025. LCM, based in Ellesmere Port, is described by its own management as the only ex-China producer of scaled samarium, samarium-cobalt, and NdPr metal and alloy — precisely the layer of the value chain that everyone else is still trying to build. USAR now runs mine (Round Top, Texas), metal and alloy (Ellesmere Port), and is commissioning a magnet plant in Stillwater, Oklahoma targeting 10,000 tonnes a year.

· Lynas signed a binding $137 million offtake with the DoD at a $110/kg price floor in March 2026, and now has upwards of $258 million in DoD support for its Texas heavy-rare-earth facility, on top of the mature Mount Weld — Kalgoorlie — Malaysia chain that already produces most of the non-Chinese light rare earths on Earth.

· Arafura took its Nolans project to FID in May 2026 with roughly $1.2 to $1.6 billion of stapled financing from Australian, Korean, German, Canadian, and US government sources plus offtakes with Hyundai/Kia and Siemens Gamesa.

· Iluka is deep into construction on Eneabba, backed by an A$1.65 billion non-recourse loan from the Australian Government.

· Neo Performance Materials inaugurated Europe’s largest rare-earth magnet plant at Narva, Estonia in September 2025 — 1,000 tonnes ramping to 5,000, roughly 10 percent of European demand, on the site of the old Silmet separation plant that traces its lineage straight back to Molycorp.

That is not a “starting from scratch” list. That is production, expansion, and offtake. It is exactly what Hennigh said we needed to do — stop chasing novel flowsheets, take the old blueprints out of grandpa’s drawer, back the deposits that actually work, and build. And it is happening.

Hennigh’s own timeline for full ex-China supply from a standing start was five years — two to build the plant, three to run the separation circuit end-to-end. But we are not standing still. MP Materials is already producing separated oxide. Lynas is already producing separated oxide. Energy Fuels is producing roughly 1,049 tonnes a year of NdPr from White Mesa in Utah. Neo Performance is producing magnets in Estonia. USAR has metals and alloys in the UK. Meteoric commissioned its pilot in December 2025 and is targeting FID in late 2026. This is not a five-year build from zero. It is a three-to-five-year integration and scale-up on assets that already exist, backed by government offtakes that solve the price-crash problem that killed Molycorp.

That is the whole argument. Second-mover advantages — access to the means of production, trusted partnerships, deep capital markets, existing miners and refineries — and apply it specifically to rare earths, and the case is even stronger. We just have to stop losing on purpose.

The Companies Worth Watching

A quick lay of the land. This is not a stock tip sheet. It is a list of the operators who have been doing this seriously for at least a decade — or who have just made moves significant enough to earn a seat at the table.

North American Mining and Processing

MP Materials (NYSE: MP) — Mountain Pass, California. The only US mine currently producing separated rare-earth oxide at commercial scale. Building the country’s first fully integrated mine-to-magnet chain with the “Independence” magnet facility in Fort Worth. DoD is a preferred-equity holder with a $110/kg NdPr floor for ten years. Apple has prepaid $500 million against recycled-magnet supply. This is the anchor asset of the entire American rare-earth strategy.

USA Rare Earth (NASDAQ: USAR) — Round Top, Texas (heavy REE deposit) plus Stillwater, Oklahoma magnet plant, plus Less Common Metals in Ellesmere Port, UK (metals and alloys). The November 2025 LCM acquisition is arguably the single most strategically important move of the cycle — it plugs the samarium and NdPr metal/alloy gap that nobody else has closed. If they execute Stillwater commissioning through 2026, USAR becomes the first fully vertically integrated non-Chinese heavy-REE mine-to-magnet operator.

Lynas Rare Earths (ASX: LYC) — Mount Weld, WA / Kalgoorlie / Malaysia / Seadrift, Texas. The most mature non-Chinese integrated producer on Earth. Ten-plus years of operating experience. JOGMEC-backed on the Japan side, DoD-backed on the US side. Building heavy-REE separation in Texas with $258 million of DoD support and a $137 million binding offtake at a $110/kg floor. The single most important company in this story.

Energy Fuels (NYSE: UUUU) — White Mesa Mill, Utah. Repurposed a legacy uranium mill into an operating rare-earth separation facility processing monazite. Currently producing over a thousand tonnes a year of NdPr oxide with heavy-REE expansion planned for 2027. A live example of brownfield beating greenfield.

Ucore Rare Metals (TSX-V: UCU) — Louisiana Strategic Metals Complex. Commercialising its RapidSX technology with $22.4 million of DoD support. First “early production” targeted for late 2026. Worth watching if only to see whether the “novel flowsheet” argument Hennigh warns against can beat conventional solvent extraction on cost — I remain sceptical, but the DoD money speaks.

Rare Element Resources (OTCQB: REEMF) — Bear Lodge, Wyoming, plus Upton demonstration plant. Majority-owned by General Atomics’ Synchron affiliate. DOE-funded demonstration plant operational in early 2026, $553 million EXIM Letter of Interest for commercial-scale build-out.

NioCorp (NASDAQ: NB) — Elk Creek, Nebraska. Not a pure REE play — the primary economics are niobium and scandium — but a strategic-metals project with Pentagon Title III backing and a scandium-aluminium alloy partnership with Lockheed’s Skunk Works for fighter airframes.

HyProMag / Mkango Resources (AIM/TSX-V: MKA) — Birmingham, UK / Pforzheim, Germany / Dallas–Fort Worth, USA. The purest brownfield play in the industry. Uses the Hydrogen Processing of Magnet Scrap (HPMS) technology developed at the University of Birmingham to strip rare-earth magnet powder out of end-of-life hard drives, EV motors, wind turbines, and MRI machines. The Tyseley Energy Park plant opened in January 2026 as the first commercial rare-earth magnet production in Britain in 25 years, running at 100 tpa and scaling to ~300 tpa. A German sister plant is commissioned, a Texas facility is targeting H2 2027, and Siemens has already integrated recycled magnets into a SIMOTICS servomotor. No mine, no separation plant, no ionic-clay geology — just recovering material that already exists. Exactly the model Apple’s MP Materials deal is validating at scale.

Critical Metals Corp / Tanbreez

Critical Metals Corp (NASDAQ: CRML) — Tanbreez, southern Greenland. One of the largest rare-earth deposits on Earth by tonnage, and — critically — a eudialyte-hosted deposit with roughly 27–28% heavy rare earths in the basket and low uranium/thorium levels that sit below Greenland’s 100 ppm regulatory threshold, avoiding the legal wall that has stalled the neighbouring Kvanefjeld project. Critical Metals secured a non-binding $120 million Letter of Interest from the US Export-Import Bank in early 2025 and has moved into resource expansion and permitting, with first production targeted by 2026–2027. Strategically positioned inside the Trump administration’s Greenland-focused critical-minerals push, and one of the few Western deposits with genuinely heavy-REE-rich, radiogenically-clean chemistry outside the Brazilian ionic-clay complex.

Brownfield Ionic Clay: Brazil

Meteoric Resources (ASX: MEI) — Caldeira Project. The Brazilian ionic-clay deposit with 1.6 billion tonnes of resource. DFS complete mid-2026, pilot plant running since December 2025, non-binding offtakes with POSCO International, Neo Performance Materials, and Ucore. If governments are serious, this is the deposit they should be building offtake around.

Viridis Mining and Minerals (ASX: VMM) — Colossus, adjacent to Meteoric’s Caldeira. Processing facility launched May 2026, explicit strategy of selling only to Western buyers. $360-400 million project targeting steady production by end of 2028.

Aclara Resources (TSX: ARA) — Penco Module in Chile plus Carina in Brazil. Environmental approval cleared June 2026. Combined potential of roughly 12 percent of China’s official 2024 heavy-REE output.

Rainbow Rare Earths (LSE: RBW) — Uberaba, Brazil. An elegant unconventional feedstock: phosphogypsum stacks left over from fertiliser production, in JV with Mosaic. PEA complete February 2026, DFS targeted late 2026, potential 1,900 tonnes of NdPr plus 600 tonnes of a samarium-europium-gadolinium product per year from tailings.

The Australian Contingent

Iluka Resources (ASX: ILU) — Eneabba refinery, WA. A monazite-fed refinery under construction with an A$1.65 billion non-recourse Australian government loan — the largest single sovereign commitment to a Western rare-earth project. Traditional mineral-sands producer pivoting into REE separation.

Arafura Rare Earths (ASX: ARU) — Nolans, Northern Territory. Reached FID in May 2026 with roughly $1.2-1.6 billion of financing stapled from Australian, Korean, German, Canadian, and US government sources. Binding offtakes with Hyundai/Kia and Siemens Gamesa. One of the most broadly financed non-Chinese REE projects ever.

Northern Minerals (ASX: NTU) — Browns Range, WA. Xenotime with some of the highest dysprosium and terbium grades outside China. FFS completed September 2025, roughly 8 percent of global Dy/Tb demand at full production. Included in the US EXIM Bank’s $2.2 billion Australian critical-minerals package.

The Japanese Refiners and Downstream

JOGMEC — Japan’s state critical-minerals vehicle. Co-founder of Japan Australia Rare Earths, primary backer of Lynas, funder of overseas ionic-clay exploration for over a decade. The template for how a Western government should behave.

Santoku Corporation — Now part of Hitachi Metals / Proterial. Pioneered molten-salt electrolysis of rare earths and patented the Strip Casting process that is now the world standard for NdFeB alloy. Also developed a solvent-extraction route for europium in the 1960s. Decades of continuous operating experience.

Hitachi Metals / Proterial — Holds 600-plus NdFeB magnet patents worldwide including Sumitomo Special Metals’ original 1982 co-invention. Enforces them. Licenses TDK. The IP backbone of the non-Chinese magnet industry.

Nippon Yttrium — The Kyushu separation plant. Small, quiet, still running. Exactly the kind of operator memory we need to redeploy at scale.

Europe

Neo Performance Materials (TSX: NEO) — Silmet separation plant in Estonia plus the newly inaugurated Narva magnet plant, Europe’s largest. Direct corporate lineage back through Molycorp to the original Magnequench technology. €187 million of EU funding, customer commitments from Schaeffler and Bosch.

Less Common Metals — Ellesmere Port, UK, now owned by USA Rare Earths. Covered above.

Stop Managing the Decline. Start Rebuilding the Industry.

The industry our father’s generation built is being rebuilt by ours, in real time, and it is happening much faster than the doom-loop press wants to admit. Not because anyone had a sudden ideological conversion. Because China overplayed its hand in April 2025 and finally made the strategic argument un-ignorable, and because a critical mass of capital — sovereign, defence, and commercial — decided at the same time to stop losing on purpose.

The playbook is not complicated. Back the deposits that actually work — Mountain Pass, Poços de Caldas ionic clays, Mount Weld, Eneabba, Nolans. Restart the old American solvent-extraction chemistry at scale rather. Buy or bolt on the metals-and-alloys layer aggressively, as USAR just did with LCM. Preserve and expand Japan’s operator memory. Guarantee offtake and price floors so the next Chinese flood does not kill the industry the way it killed Molycorp in 2015. Recycle magnets — Apple’s MP and Hypromag are the template. And stop, for the love of God, selling any more American strategic plants and technology to the Chinese.

Three to five years is not decades. It is the length of a normal capex cycle. It is less than the time between iPhone hardware refreshes. It is entirely doable, because it does not require inventing anything new. It requires remembering what we already knew, developing the assets we already own, and executing with the commercial discipline I argued in China’s Vision of Victory and the West’s Industrial Revival.

China in 75 years into a well 100 year plan to be the dominant global superpower, and they realized that controlling the inputs of production was the key to that plan. The West has the technology the inputs and the industrial ecosystems, we just forgot they were important. The West does not need a 100 years. We need three to five, at least for rare earths, and we are already two years in. Then we need to do what we are doing with rare earths for every critical mineral on the Periodic Table.

Part I of this series was published on Friday Related reading: China’s Vision of Victory and the West’s Industrial Revival; Interview with Quinton Hennigh, all on my substack.

The name “rare earth” is a bit of a red herring, it makes most people think that relative rarity is the issue, finding mineable deposits. Ironically we have found enough reserves (economically mineable deposits) to mine for the next 100 years. The problem is that not all deposits are created equally, and what is truly rare is not mineable deposits, but “refine-able” deposits. The process of getting the rare earth minerals out of the rock and into a useable form, is in practice, is extremely difficult, messy, chemistry‑intensive, and specific to the quirks of each deposit.

This first part of the series walks through the rare earth value chain from ore to magnet and explains why refining, not mining, is the true bottleneck. The second part will dig into the countries and companies that are attempting to master this bottleneck, and develop independent rare earth value chains, and which are likely to be successful and which not.

What Rare Earths Are – And Why They Matter

The rare earth elements (REE’s), are a set of 17 silvery-white soft metals, the 15 lanthanide elements plus yttrium and scandium. While some are genuinely “rare” some are not. The reason they were called rare is because they often hide in other minerals, and rarely occur in concentrations that are easy to identify, mine and process. Of the 17 rare earths, the crustal abundance varies widely, from 0.28 parts per million (ppm) for thulium to 66 ppm for cerium, to put that in context copper is 60ppm lead is 14ppm, and gold is 0.004ppm.

The Rare Earths

Atomic number, Symbol, Name, Approx. crustal abundance (ppm parts per million in the earths crust)

21 Sc Scandium 22ppm

39 Y Yttrium 30ppm

57 La Lanthanum 31–32ppm

58 Ce Cerium 60–68ppm

59 Pr Praseodymium 7–10ppm

60 Nd Neodymium 27–38ppm

61 Pm Promethium ~0 ppm (no stable abundance)

62 Sm Samarium 4–8ppm

63 Eu Europium 1–2ppm

64 Gd Gadolinium 4–8ppm

65 Tb Terbium ~1ppm

66 Dy Dysprosium 3–6ppm

67 Ho Holmium 0.8–1.4ppm

68 Er Erbium 2–4ppm

69 Tm Thulium ~0.3–0.5ppm

70 Yb Ytterbium 2–3ppm

71 Lu Lutetium ~0.3–0.5ppm

Rare earth element (REE) grades are usually divided into two groups, light rare earths (LREE) and heavy rare earths (HREE). Light rare earths such as lanthanum, cerium, neodymium and praseodymium tend to be more abundant and are used in catalysts, polishing powders and, crucially, high‑performance permanent magnets. Heavy rare earths like dysprosium, samarium and terbium are less abundant but essential for magnets that must operate at high temperatures, for example in electric vehicles or jet engine motors.

What make the rare earths special is their atomic properties, their shielded electron shell configurations that produce sharp, atom‑specific energy levels that drive distinctive magnetic and optical behaviour. In short, the same physics gives you strong magnetism, sharp optical transitions and rich catalytic chemistry – a rare combination in one group of elements.

These metals underpin modern technologies in three main ways:

• Permanent magnets (NdFeB, SmCo) in electric motors of all kinds from EV motors and wind turbine generators, to industrial drives and defence systems.

• Optical and electronic applications in screens, fibre optics and sensors and GPU’s.

• Catalysts and polishing powders in refining, chemicals and glass manufacture.

Different Types of Rare Earth Deposits

Rare earths almost always occur together with albeit with different distributions in different types of deposits. The rare earths are bound up in different types of minerals; geologically, there more than 160 known REE‑bearing minerals have been identified, but only a handful – notably bastnäsite, monazite, xenotime, ion‑adsorption clays and a few others – currently form economic ore bodies. In practice, these are grouped into four main deposit types that supply today’s market.”

Carbonatite–bastnäsite deposits
Some of the most important light rare earth deposits are hosted in carbonatite complexes and occur in minerals such as bastnäsite. Famous examples include Mountain Pass in the United States and Bayan Obo in China. These deposits typically have relatively high concentrations of light REEs.

Monazite and xenotime deposits
Monazite and xenotime are phosphate minerals found in hard‑rock deposits and in heavy mineral sands, where rare earths are often recovered as a bi-product. They often carry significant amounts of thorium and sometimes uranium, which creates regulatory and waste management challenges.

Ion‑adsorption clays
The largest of these deposits are found in southern China and neighbouring regions, many heavy rare earths are produced from ion‑adsorption clay deposits formed by weathering of granitic rocks. Here REE ions are loosely bound to clay surfaces rather than locked into robust mineral structures.

Other and emerging sources
There are also rare earths in alkaline igneous complexes, marine sediments, phosphorites and industrial residues such as red mud. Each of these comes with a different mineralogy, impurity suite and physical form, which means no single “universal” flowsheet exists. When people talk about “new” rare earth sources, they are really talking about building new, deposit‑specific refining solutions.

Reserves, Resources and Geopolitical Concentration

Geologists and engineers distinguish between “resources” – the total amount of REEs in the ground that we know about – and “reserves,” which are the portion that can be economically extracted under current conditions. Known resources are approximately 3 times the size of known reserves, and how many will convert to reserves is dependent on the economics of mining and metallurgy. According to USGS in 2025 the world mined approximately ~390k tonnes of mixed rare earth oxides, and global reserves sat at ~90 million tonnes. The breakdown is below.

Rare earth reserves by country (USGS‑based, ~2026)

Country, Reserves (million t REO), Share of world total (%)

• China 44.0m, ~48.4%

• Brazil 21.0m, ~23.1%

• India 6.9m, ~7.6%

• Australia 5.7m, ~6.3%

• Russia 3.8m, ~4.2%

• Vietnam 3.5m, ~3.9%

• United States 1.9m, ~2.1%

• Greenland, 1.5 m ~1.6%

• Tanzania, 0.89 m, ~1.0%

World total 90.9 million tonnes

From Ore to Concentrate: Beneficiation

The first transformation in the value chain is purely physical. Rare earth ores are crushed and ground into fine particles so that valuable minerals can be separated from waste rock. Because REE minerals typically make up a small fraction of the total rock – often well below ten percent – this stage is about upgrading the ore into a “concentrate” that is rich enough to justify chemical processing.

Typical beneficiation tools include:

• Magnetic and electrostatic separation, exploiting differences in electrical conductivity and magnetic susceptibility between REE minerals and gangue.

• Gravity separation, which distinguishes particles by density.

• Froth flotation, where reagents help target minerals attach to bubbles and float, leaving denser waste behind.

Even at this early stage, the mineralogy of the deposit dictates what works. A flowsheet tuned for bastnäsite will not perform well on monazite, and techniques that look efficient at the laboratory or pilot scale can prove unreliable when confronted with the variability of a real ore body.

Cracking and Leaching: Turning Minerals into Solutions

Once a concentrate is produced, the next challenge is to break open the mineral structures and dissolve the rare earth molecules into solution. This step is often called “cracking,” and it is where the chemical personality of each deposit really begins to dominate.

For monazite and xenotime concentrates, one common route involves digesting the material in concentrated sulfuric acid at high temperature. Colloquially called an “acid bake” or “acid crack”. This attack breaks down the phosphate lattice and liberates rare earths and other elements into a complex mixture. Another route uses caustic soda under pressure to convert the minerals into more soluble forms. Each option has different trade‑offs in terms of recovery, reagent consumption, waste streams and how the thorium and uranium associated with the deposits are handled.

Ion‑adsorption clay deposits behave differently. Because the rare earths are loosely attached to clay surfaces, they can be leached using ammonium sulphate or ammonium nitrate solutions at room temperature. The resulting solutions contain rare earths along with many other dissolved ions and must be further treated to concentrate and purify the target metals.

Carbonatite–bastnäsite concentrates may be roasted, treated with acid or subjected to tailored combinations of physical and chemical steps to remove carbonates and fluorides before leaching. The details matter: temperature, acid strength, solid‑liquid ratios and residence times all influence recovery rates and impurity profiles.

What ties all of this together is that cracking is not a generic recipe. It is a tightly tuned set of conditions that must be discovered and optimised for each deposit through extensive testing and piloting.

Separation Chemistry: Splitting the Rare Earth Cocktail

After cracking and leaching, the rare earths end up in a liquid mixture containing many elements with very similar chemical properties. Separating them into individual products – dysprosium here, neodymium there, cerium in another stream – is one of the most demanding tasks in industrial chemistry.

Most commercial plants use solvent extraction as the backbone of separation. In this process, the leached rare earth solution is mixed with an organic solvent containing special extractant molecules that selectively bind certain rare earths. By carefully controlling pH, temperature and phase ratios, different rare earths are preferentially transferred into the organic phase or left in the aqueous phase. A series of mixer‑settlers or column stages gradually enriches one element in one stream and removes it from others.

Ion exchange techniques are also used, especially to achieve very high purities for optical and electronic applications. Here the solution is passed through resins that bind rare earth ions, which are later stripped off under controlled conditions.

The key point is that these circuits are not simple or uniform. A modern plant may use dozens or even hundreds of stages, each adjusted to the specific composition of feed solutions from its own deposit. Small changes in impurities, acidity or temperature can disrupt performance. As a result, flowsheets developed for one ore body cannot simply be transplanted to another without substantial redesign and testing.

Why rare earths are hard to separate

Rare earths are hard to separate because chemically they are nearly identical. All 15 lanthanides plus yttrium and scandium sit in the same column of the periodic table. The only real difference between them is a tiny shrinkage in ionic size going across the series, an effect called lanthanide contraction, the difference is roughly 0.01 angstrom per element. An angstrom is a unit of length equal to one ten-billionth of a metre, or 0.1 nanometres. Neighbouring pairs like neodymium and praseodymium, or dysprosium and holmium, differ in size by less than 1% and behave almost identically in solution. In most of chemistry you separate elements by exploiting big differences in charge, size, or reactivity; with rare earths you have almost none of those to work with, so every step of a separation gives you only a marginal enrichment rather than a clean split.

The workaround is to stack a huge number of those marginal steps into a long cascade. The industry-standard technique is solvent extraction, run in banks of interconnected tanks called mixer settlers. In each tank you stir an aqueous rare-earth solution together with an organic extractant molecule and then the two phases are left to settle apart like oil and water. The aqueous and organic streams flow in opposite directions through the cascade, and the pH is tuned in small increments (0.1–0.2 units at a time) so that at each stage one rare earth is very slightly more inclined to sit in the organic phase than its neighbour. A commercial heavy-rare-earth plant typically runs 60 to 100+ of these tanks in series to peel off a single element at 99.99% purity, and pushing to the 99.999% grade needed for lasers, phosphors and semiconductor parts adds more stages on the back end. The physical operation is not exotic — it is just enormous, slow, reagent-intensive, and unforgiving.

Why impurity removal is almost as hard

Before any of that separation chemistry can even start, the feed has to be cleaned of everything that is not a rare earth, and that pre-cleanup is nearly as demanding as the separation itself. Every deposit brings its own troublesome co-hosts — thorium and uranium in monazite, iron and aluminium in ion-adsorption clay, barium and strontium in bastnaesite — and any of them left in the feed will either crash out inside the mixer-settlers, poison the organic reagent, or contaminate the final oxide. The radioactive impurities are the hardest problem: they force a full tailings and licensing regime around the plant, and are the single biggest reason Western rare-earth projects stall at permitting rather than at chemistry. In practice a rare-earth refinery spends roughly as much of its capital and footprint on the front-end cracking and purification circuit as on the separation cascade itself.

From Oxides to Metals and Alloys

Once separation is complete, producers typically precipitate the rare earths from solution, and then calcine them to form oxides. These oxides – such as neodymium‑praseodymium oxide or dysprosium oxide – are the main traded intermediates and the starting point for making metals and magnet alloys.

Converting oxides into metals involves high‑temperature reduction steps. Common approaches include, metallothermic reduction (smelting), and electrolytic methods, in which oxides or halide salts are reduced in molten salt electrolytes under an electric current.

The resulting metals may be further processed into master alloys, such as NdFeB or SmCo, which form the basis of permanent magnet production. At every stage, impurities like oxygen, carbon or unwanted metals can weaken the final alloy or change its magnetic properties. This makes the quality of upstream refining steps critical for magnet manufacturers.

How Permanent Magnets Are Made – And Why Feed Quality Matters

Rare earth permanent magnets, especially neodymium‑iron‑boron (NdFeB) magnets, are manufactured through carefully controlled metallurgical and microstructural processes. In a typical route, the alloy is melted, rapidly solidified into thin strips, broken down through hydrogen decrepitation, milled into powders and then pressed and sintered into dense shapes under an applied magnetic field. Subsequent heat treatments, machining and protective coatings tune the magnet’s final performance and durability.

Small variations in the composition and purity of rare earth oxides and metals can have outsized effects on magnet performance. For example, adding dysprosium or terbium improves high‑temperature coercivity, but too much or too little can compromise other properties or drive up cost. Excess oxygen, carbon or certain metallic impurities can alter grain structure, reduce remanence or make magnets brittle.

This is why magnet producers place strict specifications on their feedstock and why new rare earth projects must go through extensive qualification before they can supply critical magnet markets. Delivering a concentrate or oxide is not enough; producers must show that their material behaves consistently inside the magnet manufacturing chain.

Why Success in the Lab Rarely Survives the Plant

Looking at this chain – from ore to concentrate, cracking, separation, oxide, metal and magnet – it is tempting to assume that once the basic chemistry is proven in a laboratory, scaling up is only a matter of building larger tanks and pumps. Experience suggests otherwise.

Full‑scale plants must cope with:

• Variable ore feed and changing mineralogy as deposits are mined over time.

• Non‑ideal hydrodynamics, mixing, fouling and corrosion that alter reaction behaviour.

• Supply constraints and price volatility for reagents, energy and water.

• Regulatory and social requirements for handling waste, radioactivity and emissions.

These factors interact in ways bench‑scale tests cannot easily capture. Many projects demonstrate promising recoveries on small samples yet struggle to maintain performance in continuous operation. Tuning the system to be stable and economical at scale becomes a multi‑year process of redesigning circuits, changing reagents, adjusting operating conditions. Basically it is a lot of trial and error.

Companies that are successful in rare earth refining tend to be those that have spent years – sometimes decades – iterating their flowsheets, based on specific deposits, building institutional knowledge and training operators. Their real competitive advantage lies not in a single invention but in thousands of small practical choices about how to make a particular deposit work reliably.

Every Deposit Must Be Qualified

Because rare earth chemistry is so deposit‑specific, each new project faces a double qualification challenge. First, it must demonstrate that it can consistently produce a concentrate material meeting technical specifications – purity, composition, physical form. Second, end‑users must qualify this material in their own processes, whether that is a separation plant, a metals producer or a magnet factory.

This qualification process often takes years and requires large‑scale piloting, detailed testing of product behaviour and long‑term supply agreements. A deposit can look attractive in terms of grade and tonnage yet fail to become a serious supplier if its metallurgy proves too unpredictable or expensive to tame.

Understanding Rare Earths

Understanding rare earths therefore means understanding both the geology and the chemistry. Mines can be developed in a matter of years, but mastering refining is key to any rare earth industrial strategy and the know‑how must be accumulated over much longer cycles. Part II of this series will dig into what it will take to create a rare earth refining industry in the West, and what countries and companies are likely to do it.

“We just don’t know enough; we can’t risk it until we know more.”

This line has been drilled into people. It is the closing sentence of almost every NGO press release on the subject, preceded by a familiar litany of catastrophic “what ifs” that would scare anyone sane. Most people hear “unknown, irreversible damage to sensitive ocean ecosystems” and understandably say “hell no”.

But NGOs that peddle that line learned this playbook long ago. Most notably in their campaigns against nuclear power. This article will tell you where the anti deep sea mining campaign came from, how it evolved, and then give you the facts, separate from the fiction, and let you to determine for yourself if we know “enough”.

Nuclear: the original case study in fear‑based campaigning

Take nuclear energy. For decades, Greenpeace saturated public debate with imagery of Chernobyl, Fukushima and mushroom clouds, deliberately blurring the line between civilian reactors and nuclear weapons. Very few people understand reactor design, probabilistic safety analysis or dose‑response functions; almost everyone understands a mushroom cloud.

Yet when you look at risk data per unit of electricity, nuclear sits among the safest energy sources humanity has ever deployed. And that is before you consider environmental impact and carbon footprint, for which they are all, including wind and solar, worse.

On climate, the numbers are similarly stark. A 2012 analysis from the National Academy of Sciences estimated that existing nuclear plants had already avoided around 13 gigatonnes of CO₂ emissions by 2009, and could cumulatively avert 27–30 gigatonnes by 2030 under moderate deployment scenarios. One need only look at Germany’s ballooning emmissions following its fateful decision to shutter all its nuclear plant followign Greenpeace lobbying to see the folly of such a decision.

In other words: one of the safest, lowest‑carbon forms of firm power was politically neutered in the West, largely through fear‑based campaigning, image‑driven narratives and an intentional refusal to compare nuclear risks in context against the alternatives.

This was not an accident. It was the birth of a business model.

NGOs are not a movement, they are an industry

Modern NGOs are not rag‑tag bands of volunteers; they are multinational campaigning businesses, often far larger and more powerful than the companies they demonize. Greenpeace, for example, is a global network of independent national and regional organisations coordinated by Greenpeace International, with combined income in the hundreds of millions of dollars per year. Greenpeace International’s own annual report emphasises that its income “comes from millions of individuals and a small number of charitable foundations,” explicitly highlighting its dependence on regular giving and digital fundraising. Keeping people scared, catastrophising, putting out apocalyptic scenarios, next to a button that saying donate here to help us stop this from happening, is literally how they make their money.

This is not unique to Greenpeace. Across the environmental NGO sector, we are talking about billions of dollars per year in aggregate, funding offices, campaigners, lawyers, media teams, and direct‑marketing operations. To sustain that machine, you need:

· A small number of emotionally powerful, high‑salience issues, endlessly recycled

· Narratives that frame those issues as urgent, existential threats

· Clear villains and heroes

· A constant stream of “wins” and “new threats” to keep donors engaged

Climate change has become the flagship product line although nuclear was the original villain that gave birth to the business model. What most people don’t realise, is that after climate, opposition to deep-sea mining is the global environmental NGO industry’s second largest source of revenue.

The NGO business model is dependent on sustaining a sense of crisis. Steady fear campaigns create steady income streams and keep supporters emotionally activated.

When such a system discovers a new, technically complex and poorly understood frontier like deep‑sea mining, it does what any industry does when it finds a promising product: it builds a story around it and sells that story as hard as possible.

NGOs operate in a structural grey zone where they can make sweeping, emotionally loaded claims with far less scrutiny and consequence than states or corporations, as long as what they say sounds plausible. Unlike listed companies, which answer to regulators, auditors, and in many cases securities law, most NGOs operate under remarkably weak external accountability, as long as a narrative sounds emotionally plausible to donors and fits the moral branding, it can be repeated endlessly with little risk of sanction. When an NGO exaggerates, cherry‑picks, or simply gets the science wrong, there is usually no regulator to fine them, no shareholder to sue them, and no electorate to vote them out.

In that environment, there is a premium on sounding righteous, not on being rigorously accurate. If a claim is vivid, frightening and on‑brand, it pays its way, even if it collapses under serious scrutiny.

Anti deep‑sea mining as a fundraising narrative

Greenpeace’s global campaign page “Stop deep sea mining before it starts” describes the deep ocean as “a treasure trove of biodiversity and one of our best allies against climate change,” and urges supporters to “protect it” by funding the fight against mining. They publish detailed lists of “asks” for the International Seabed Authority (ISA): avoid “rushed approvals,” support a moratorium, and “prevent reckless deep sea mining.” Greenpeace International’s 2026 report “Power Dynamics in the Deep” frames deep‑sea mining as “a unilateral power grab” and a “modern iteration of colonial history in the Pacific.”

All of this is packaged, quite deliberately, in the same climate‑justice language they have honed for decades. Deep‑sea mining is cast as an extension of fossil‑fuel and colonial extractivism; opposing it becomes a way for donors to feel they are protecting both the climate and indigenous communities.

The anti‑deep‑sea mining narrative is, in other words, an integrated part of the climate and biodiversity fundraising portfolio. It is a new product line.

That does not make every concern illegitimate, but does mean we should be honest about the political economy of opposition. The NGO sector has a structural incentive to keep saying “we don’t know enough” indefinitely, because acknowledging sufficiency of evidence would weaken one of their most compelling campaigns.

Attacking anyone who tries to “know enough”

One recent paper in Global Policy entitled Cautionary Tales for Science-Based Policy in Deep-Sea Mining Governance, by Lucía Villar-Muñoz describes how even scientists who simply suggest that deep‑sea mining might, under strict conditions, be preferable to some terrestrial mining face professional backlash and accusations of industry capture, evidence that the “we don’t know enough” narrative is being policed as much as it is being investigated.

The article examines how scientific and policy debates on deep‑sea mining have become increasingly polarised, with a strong asymmetry between the visibility and acceptability of anti‑mining versus cautiously supportive positions. It documents how advocacy‑oriented NGOs and some scientists have successfully framed opposition to deep‑sea mining as the default “morally correct” stance, while casting more nuanced or cautiously pro‑development perspectives as suspect, industry‑captured or ethically compromised. The paper shows that this dynamic affects peer review, conference invitations and funding: researchers who raise questions about trade‑offs or potential benefits of deep‑sea mining report experiencing social and professional sanctions, whereas strongly precautionary or anti‑mining papers face far less challenge even when their evidence base is thin or even purely hypothetical.

The paper argues that this “asymmetric scrutiny” not only distorts the public perception of the scientific consensus, but also undermines the very evidence base NGOs claim to demand. By making it professionally risky to publish or even explore findings that do not align with a strict anti‑mining narrative, the current climate discourages balanced comparative assessments of deep‑sea versus terrestrial mining and narrows the range of policy options on the table. The authors call for a more open, pluralistic scientific discourse that recognises the legitimacy of different value judgements about acceptable risk and trade‑offs, and warn that suppressing or delegitimising pro‑mining research can itself be seen as a form of epistemic injustice.

The ISA and the politics of delay

Into this steps the International Seabed Authority, the UN‑mandated body created under UNCLOS to regulate mineral‑related activities in areas beyond national jurisdiction on behalf of nation that signed the UN Convention on the Law of the Sea.

There are 67 NGOs with observer status at the International Seabed Authority (ISA) as of March 2026 who regularly:

· Make formal statements to the ISA Council and Assembly, Greenpeace and allied NGOs:

· Call for a moratorium or “precautionary pause” on deep‑sea mining

· Urge governments to “prioritise ocean protection” over “rushed mining approvals”

· Frame deep‑sea mining as incompatible with ocean protection and climate goals

· Argue that the ISA’s legitimacy depends on stopping, rather than regulating, mining

At the same time, the ISA was explicitly established “to organize and control activities in the Area, particularly with a view to administering the resources of the Area” and to adopt “rules, regulations and procedures” for exploration and exploitation. It has issued more than a dozen exploration contracts for polymetallic nodules in the Clarion–Clipperton Zone (CCZ), each covering around 75,000 square kilometres.

More than thirty years after its creation, however, there is still no final Mining Code for nodule exploitation. The process has been repeatedly delayed, despite a legal “two‑year rule” triggerred by the Republic of Nauru that expired two years ago and sustained calls from most member States and all contractors to finalise the rules.

The NGO‑industrial complex has a structural interest in keeping the ISA stuck in permanent pre‑operational limbo, and they have been extraordinarily effective at it so far.

The Clarion–Clipperton Zone

The heart of the current debate is the CCZ, a massive abyssal plain between Hawaii and Mexico, covering roughly 4.5–5 million square kilometres—about 1% of the global ocean floor. This region hosts the richest known fields of polymetallic nodules: fist‑sized rocks that sit loose on the seafloor at depths of 4,000–6,000 metres.

Typical CCZ nodules contain:

· Around 25–30% manganese

· Roughly 1–1.5% nickel

· About 0.2–0.3% cobalt

· Around 1–1.5% copper by weight

These are globally very competitive grades individually, packed together in a nodule they are phenomenal, especially once you factor in that the nodules are unconsolidated (not stuck in host rock) and lie at or near the sediment surface, which means in reality they don’t need to be mined at all, merely picked up or dredged.

The CCZ is cold it hovers around 1 degree Celsius, it is pitch black, no light penetrates beyond 1000m and it has very low rates of organic carbon flux from the surface (food for the organisms, there are no plants). Biomass and productivity 100s of times lower than in coastal waters or the upper 200 metres of the ocean. Life is present, infaunal worms, small crustaceans, holothurians and sessile organisms attached to nodules, but biomass density is extremely low.

Biodiversity of the CCZ vs Land areas

Crucially: The CCZ represents about 2% of global abyssal plains, (4000-6000m deep).

Only a fraction of licence areas will ever be mined; 43% is already designated as “areas of particular environmental interest” and have been set aside (protected) to mitigate risk of biodiversity loss.

Pre‑operational environmental baselines for these areas are far more detailed than anything that preceded most large terrestrial mines.

We are not starting from ignorance. We have:

• Billions invested in more than 50 years of deep‑sea research.

• Published more than 200,000 peer reviewed papers on nodules, their supporting ecosystem, and the potential impacts of collecting them

• Over 9000 research vessel days studying and monitoring the effects of currents, sediments, biodiversity, light, and noise, equating to more than 25 years at sea. Significantly more than ever taken in land based mining baseline environmental assessments.

• Dedicated interdisciplinary assessments of potential deep‑sea mining impacts.

• Petabyte-scale datasets that dwarf even the most in-depth environmental impact assessments for the largest terrestrial mining projects.

Basically, we know more about the CCZ than we have ever known about a land based mining area before we mine it.

Comparing deep‑sea and terrestrial mining

Recent work has started to do exactly that. A 2024–2025 paper in Global Change Biology proposes a defensible framework for comparing environmental impacts of deep‑seabed and land‑based mining. It concludes that, deep‑sea nodule mining could produce significantly lower overall impacts than expanding high‑impact terrestrial mines, especially when you account for:

· Land‑use change (deforestation, habitat fragmentation)

· Human and animal exposure to dust, noise and accidents

· Tailings dam failures and riverine pollution

· Social conflict, resettlement and human rights impacts

Industrial‑ecology work focusing on “battery metals from the deep sea” also suggests that nodules can deliver nickel, cobalt and manganese with substantially lower land footprint, lower biodiversity loss and significantly lower carbon and pollution profiles than existing land‑based sources, depending on process design and power mix.

Taken together, the picture is not “safe vs unsafe,” but different kinds of impacts. Deep‑sea mining disturbs low‑productivity abyssal ecosystems and may have long‑lasting local effects on small communities of widely distibuted organisms reliant upon the nodules themselves, but avoids the deforestation, human displacement and occupational hazards of many terrestrial mines. The ethical question is whether it is better to concentrate impacts on a relatively small portion of the most common habitat on Earth, or to continue expanding high‑impact mining frontiers on land like tropical rainforests.

NGOs almost never present the question that way. They compare deep‑sea mining to an imaginary world where we can simply “reduce demand” or “recycle our way out,” not to the actual, politically and technologically constrained world in which demand for critical minerals is rising and new supply is getting harder to find, harder to mine, and leaving a larger proportional environmental footprint than ever before.

Deep Sea claims vs scientific reality

The gap between headline claims and the peer‑reviewed literature is wide. A few examples:

Claim VS

Contextualised scientific reality

“Irreversible biodiversity losses”

Revisits to the sites of test mining campaigns in the 1970s which used far more impactful equipment have demonstrated full recovery of many organisms, though some nodule-attached fauna require more time. Studies for modern technology trials demonstrate far lower impact, with pioneer species returning in just 12 months and impacts to other species constrained to tens of meters. Most abyssal species are widely distributed, including across ocean basins, and protection of at least 50% of CCZ will mitigate against biodiversity loss.

“Sediment plumes will travel thousands of miles”

Seafloor plumes from actual mining trials have been demonstrated to stay low and settle rapidly within roughly 1 kilometre, not the thousands of kilometers claimed; what little sediment is lifted, is discharged into the mid‑water plumes at depths of at least 2,000 meters, far below where fish live or dive to feed and breed, where they dilute rapidly into the vastness of the Pacific ocean.

“Sediment will kill large ocean fauna”

The primary ecological impacts are on benthic infauna and epifauna (worms, small crustaceans, holothurians, nodule‑attached organisms) and on filter‑feeding mid‑water fauna near discharge zones; pelagic megafauna (whales, large fish) are not directly exposed, whales literally never descend past 3000m, the only disturbance would be from the vacuum column noise which in not dissimilar to noise from regular shipping.

“Dark oxygen” will be disrupted

The claim that nodules produce oxygen in the absence of photosynthesis was a hypothesis that has been almost entirely discredited as the original oxygen was determined to be a result of faulty equipment. It has never been replicated, and multiple physicists have written on its scientific implausibility because it would break the rules of physics.

“The deep sea is a treasure trove of biodiversity”

Abyssal plains cover two thirds of Earth’s surface and represent the ecosystem with the least life, and relatively low levels of biodiversity compared to every other ecosystem on the planet. Calling the CCZ a treasure trove is deeply misleading about the relative ecological stakes: it is estimated to host between 6,000-8,000 species, dominated by microbes and small invertebrates widely distributed over vast areas; compare that to the nickel-rich rainforests of Indonesia, which host an estimated 400,000 in exponentially higher number per species that are unevenly distributed across a habitat we have relatively little of.

“The deep ocean is a major carbon sink that mining will destabilise”

The deep ocean as a whole is a key long‑term carbon reservoir, but the vast majority of this carbon is stored in the water column. Seafloor sediments contain less than 5% of all marine carbon, a tiny fraction of which is stored in sediments at 4,000 meter water depth. Claims that nodule collection could impact oceanic carbon sequestration are not supported by scientific evidence which finds the likely impacts to be “trivial”.

Diminishing returns to “more science” and what is “enough”

At this point, calls for “more research” have become less about genuine knowledge gaps and more about extending a veto. NGO’s haven’t ever even hinted at an objective endpoint or what will be enough, because from their perspective nothing will ever be enough, but using the word “enough” makes people believe there is an objective endpoint, therefore asking for a precautionary pause becomes reasonable.

The reality is we know more than enough, the remaining uncertainty is irreducible without actually observing real operations, and the marginal cost of delay, in terms of continued terrestrial impacts, supply insecurity and prolonged emissions from higher‑carbon alternatives, keeps rising.

Adaptive management exists for precisely this reason. You start small, under tight controls; you monitor continuously; you adjust or shut down operations if impacts exceed agreed thresholds; and you iterate. There is no equivalent of a “Deepwater Horizon” blowout risk in nodule collection: failures are incremental and tractable, not catastrophic.

Yet the NGO‑industrial complex continues to demand that regulators behave as if additional pre‑operational studies can magically erase uncertainty and risk, as long as donors keep paying for campaigns.

Who decides?

No previous extractive industry has faced this level of pre‑operational scrutiny. The evidentiary bar and standards for deep‑sea mining have been set extraordinarily high by both by historical standards and modern standards. Meanwhile, the NGOs opposing it operate under no standards: they can, and do, catastrophise, deliberately use emotive language and omit inconvenient truths, and occasionally tell outright untruths, because creating and maintaining fear pays the bills.

The job of a regulator is not to deliver closure for activists. It is to regulate access to resources designated as the “common heritage of mankind” in a way that balances environmental protection, equitable benefit sharing and global development needs. That will always involve trade‑offs.

You don’t have to love deep‑sea mining. You don’t even have to support it. But if you care about evidence, about trade‑offs, and about the political economy of climate and minerals, you should at least ask:

· Who benefits from a world in which one of the lowest‑impact potential sources of critical minerals is killed before it starts?

· Who pays the price, in land, livelihoods and emissions, when we keep pushing mining into ever more fragile terrestrial frontiers instead?

· And why are we letting an industry built on fear and fundraising decide, by default, that “we don’t know enough”, when what we actually lack, is the courage to admit that every path carries costs, and that some are lower than others?

For more in depth reading

In US policy, a mineral is typically deemed “critical” when it is essential to economic or national security and vulnerable to supply disruption.

While gold is not classed as “critical” in the official USGS Critical Minerals List, its role is analogous: it remains a core reserve asset for central banks, underwrites confidence in sovereign balance sheets, and serves as collateral in crisis.

The result is that gold now functions as a critical monetary mineral: whoever controls production, trade channels and sovereign stockpiles gains leverage over the plumbing of global finance.

China has been buying gold for decades, it stepped up purchases over the last decade and in recent years and months it has stepped those purchases up again, accelerating gold buying all the way up to the peak and down again. The People’s Bank of China has extended its remarkable streak of official purchases, while Chinese imports continue to absorb a significant proportion of global supply. Yet the official purchases themselves are almost beside the point. They are simply the visible part of a much larger and potentially far more important strategy.

Global Gold Production:

Look at the supply side and the “critical mineral” argument becomes brutal.

Global gold mine output is roughly 3,000–3,800 tonnes a year, depending on which dataset and year you pick; recent industry work puts 2025 mine supply at about 3,816 tonnes, a record. That’s not much metal in the context of global reserves, derivatives and debt outstanding.

China and Russia sit at the top of that narrow pipeline:

• China produced about 380 tonnes in 2024–2025.

• Russia produced around 345 tonnes in 2025 on independent estimates, even as officials tout much higher numbers.

• Australia and the United States contribute roughly 280–290 tonnes and 160–170 tonnes respectively.

Between them, China and Russia control close to a quarter of global annual mine supply and a large share of undeveloped reserves.

Now layer on policy:

• China effectively bans meaningful gold exports of domestically mined bullion; metal flows into internal refining and SGE channels and tends not to come back out.

• Russia is advancing policies to halt or heavily restrict refined gold exports, pushing more production into domestic vaults just as sanctions squeeze its access to other reserve assets.

You now have two major producers that not only dominate mine output, but also systematically remove gold from the global market. That is the very definition of a critical, weaponised supply chain.

The Big Reset

One of the people who has influenced my thinking on this subject is Dutch investor and author Willem Middelkoop.

Long before “de-dollarisation” became fashionable, Middelkoop argued in The Big Reset that the post-1971 monetary system was never designed to last indefinitely. Throughout history, periods of excessive debt, geopolitical change and shifting economic power have eventually resulted in a reset of the international monetary system.

His argument is not that gold will replace currencies.

Rather, gold will once again become the foundation upon which confidence in currencies is built.

Whether one agrees with every aspect of his thesis is almost irrelevant.

Because if policymakers in Beijing believe there is even a reasonable chance that such a reset eventually occurs, then China’s behaviour over the last twenty years suddenly becomes entirely logical.

If the rules of the monetary system are eventually rewritten, you want to enter that negotiation holding as much of the world’s ultimate monetary asset as possible.

What if China Has Already Been Preparing?

Officially, China reports holding just over 2,300 tonnes of gold.

Very few serious analysts believe that tells the whole story.

People often dismiss estimates of China’s “hidden gold” as conspiracy theories.

They’re not.

They’re forensic accounting exercises.

Analysts and commentators I follow such as Dominic Frisby, Willem Middelkoop and researchers at Société Générale are not simply inventing numbers. They are tracking known physical flows of metal over decades.

Domestic mine production.

Imports through Hong Kong and other channels.

Withdrawals from the Shanghai Gold Exchange and the London Bullion Association.

State-controlled refiners.

Export restrictions.

Official reserve declarations.

When those numbers are reconciled, they simply do not balance.

The result is a growing body of research suggesting China’s true sovereign gold holdings may be several times larger than officially declared, with accepted estimates commonly ranging between 20,000 and 30,000 tonnes when gold held across state banks, sovereign entities and other government-controlled institutions is included.

The accepted number in gold circles is that China Inc has at least 10x its officially stated number, and that is not including the gold held by Chinese citizens.

Nobody can prove the precise figure.

Dominic Frisby

Frisby is the author of the The Secret History of Gold: Myth, Money, Politics and Power. In a 2026 Kitco interview, Frisby argues that China’s real gold holdings could be “closer to 30,000 tonnes”, versus official reserves just above 2,300 tonnes. His methodology relies on:

• · Domestic mine output over several decades.

• · SGE withdrawals and the fact that most gold imported into China cannot be freely re‑exported.

• · Accumulated net imports and the absence of large visible private outflows.

Frisby frames China’s hidden stockpile as a deliberate monetary strategy to eventually challenge the US dollar, with much of the gold held outside the PBoC’s published balance sheet in sovereign entities and state‑controlled banks.

Société Générale (via Kitco)

SocGen’s analysis, cited by Kitco, compares UK gold exports, Chinese imports, domestic production, and official reserve changes

They conclude that China added about 250 tonnes of gold in one recent period where official figures showed only 25 tonnes, suggesting a 10x understatement.

Extending this pattern, they estimated that more than 1,080 tonnes which they could track have been added since mid‑2022, far above the roughly 243 tonnes acknowledged in the official reserve series.

Willem Middelkoop and others

Middelkoop in The Big Reset (2013), argues that China and other “reset‑minded” nations have been building large off‑balance‑sheet gold reserves for years, with estimated then that China held gold in the 10,000–20,000+ tonne range based om domestic mining and long‑run SGE withdrawals.

The official numbers and buying worth taking note of

China’s official reserves rose from ~1,050 tonnes in 2009 to ~1,658 tonnes after the 2015 SDR‑era disclosure, then into ~2,300+ tonnes by 2024–2025.

Since 2000, China has mined roughly 7,000–7,500 tonnes and imported roughly 20,000 tonnes of gold, giving ~27,000 tonnes of total supply entering the system, with no noteable exports.

China’s official total gold consumption (jewellery, bar/coin, industrial), which has averaged about 945 tonnes per year over the past decade and represents roughly 30% of global demand.

January 2026: Reuters reports China’s central bank bought gold for the 15th consecutive month in January, with total reserves climbing to about 74.19 million ounces (from 74.15 million), implying a small net addition that month (roughly 40,000 ounces ≈ 1.2 tonnes).

February 2026: Kitco and Bloomberg report the PBoC added 30,000 ounces of gold (~1 tonne), bringing total holdings to about 74.2 million ounces.bloomberg+1

March 2026: Caixin reports China added 160,000 ounces (~5 tonnes)in March, the largest monthly purchase in over a year, extending its buying streak to 17 months and lifting total holdings to 74.38 million ounces;

April 2026: Reuters notes the PBoC maintained gold acquisitions for the 17th straight month in April, but the specific April tonnage is not given in the public snippet; we only know the buying continued.

May 2026: Officially PBOC officially added 10 tonnes but Goldman Sachs reported that according to the London Bullion Market Association they were sold 48 tonnes of gold, the highest monthly volume in more than a year, extending the streak to 20 months.

June 2026: Chinas central bank officially added 15 tonnes

Why Would China Hide It?

If China really possesses vastly more gold than it reports, why not simply announce it?

Because revealing the truth would undermine the strategy.

First, it would dramatically increase the price of every remaining ounce China wishes to buy.

Second, it would signal to financial markets that Beijing is actively preparing for a post-dollar monetary order, potentially destabilising the very dollar assets China still owns.

Third, secrecy preserves optionality.

One day China could reveal dramatically larger reserves overnight, immediately transforming perceptions of its financial strength and potentially supporting a future reserve currency, commodity-backed settlement system or gold-linked financial architecture.

In geopolitics, surprise is often worth more than transparency.

Gold Is Already Being Weaponised

The story becomes even more compelling when production is considered.

China remains the world’s largest gold producer.

Russia is the second largest.

Together they account for roughly one-quarter of global mine supply.

China consumes all of its domestic production (10% of global production), and buys 30% of global production.

Russia has increasingly redirected its production towards friendly nations and domestic control following Western sanctions.

Neither country behaves like a normal producer trying to maximise exports.

Instead, both appear intent on removing increasing quantities of gold from freely traded international markets.

The Population Is Part of the Strategy

One aspect that receives remarkably little attention is China’s encouragement of domestic gold ownership.

The state is not simply accumulating bullion itself.

It is encouraging Chinese households to do exactly the same.

Retail investment products have expanded rapidly.

Gold ETFs (paper gold) continued to grow until recently when the buying got so out of control that China had to ban it. (contributing to the recent correction in gold prices)

Bullion sales regularly surge during periods of geopolitical tension.

Physical ownership remains officially and culturally encouraged there is a local gold shop in every community.

From a Western perspective this looks like consumer demand.

From a strategic perspective, it looks like something else entirely.

A nation distributing monetary insurance throughout its population.

Willem Middelkoop has argued for years in The Big Reset that the existing dollar-based monetary system will eventually be restructured.

Ray Dalio makes very similar observations in “The Changing World Order” and has actively encouraged gold buying as a strategic defence.

If Chinese policymakers believe there is even a reasonable probability that a reset lies ahead, every one of Beijing’s actions suddenly makes sense.

You accumulate gold.

You hide the scale of your accumulation.

You encourage your population to own it.

You quietly remove physical bullion from global markets.

And you wait.

The World’s Quiet Monetary Arms Race

Figuring out China’s true reserves is not the point.

The important observation is behavioural.

China continues buying.

China continues mining.

China continues importing.

China continues restricting exports.

China continues encouraging domestic ownership.

Every action points in precisely the same direction.

While much of the West continues debating whether gold is a relic of the past, Beijing appears to be positioning it at the centre of its financial future.

Suppose, just for a moment, they are broadly right.

America officially holds around 8,100 tonnes of gold.

If China’s real sovereign position is even 20,000 tonnes, Beijing would already possess around two and a half times America’s reserves.

If Frisby’s 30,000-tonne estimate proved even approximately correct, China would control almost four times as much monetary metal as the United States.

That wouldn’t simply change the gold market.

It would fundamentally change the balance of monetary power.

Perhaps Willem Middelkoop and Ray Dalio are right.

Perhaps another monetary reset eventually arrives.

Or perhaps it doesn’t.

But history teaches us something remarkably consistent.

Great powers rarely spend decades accumulating strategic assets they do not intend to use.

More importantly, this isn’t slowing.

It’s accelerating.

Official purchases continue.

Retail demand continues.

Imports continue.

Shadow accumulation, according to Société Générale’s methodology, appears to have accelerated dramatically since mid-2022.

That is not the behaviour of a country diversifying its reserves.

It is the behaviour of a country preparing for a very different monetary future.

I may ultimately be wrong about gold becoming America’s forgotten critical mineral.

Dominic Frisby may be wrong about 30,000 tonnes.

Willem Middelkoop may be wrong about the timing of The Big Reset.

Société Générale’s shadow reserve estimates may eventually prove too high.

But there is one thing that is increasingly difficult to dismiss.

China is behaving as though gold will determine monetary power in the twenty-first century.

And if Beijing genuinely controls a sovereign gold stockpile that dwarfs America’s, this is no longer simply a precious-metals story.

It is the opening phase of a monetary arms race.

Further reading from me :)

The book isn’t about climate. It was making a completely different point: that as the world emerged from the last Ice Age, changing environmental conditions helped encourage many societies to move from nomadic hunter-gatherer lifestyles towards settled agriculture. But in making that argument, the authors briefly mentioned the end of the Younger Dryas.

That sent me down one of my usual research rabbit holes.

The Younger Dryas was a cold period that ended roughly 11,700 years ago. What caught my attention wasn’t simply that the climate warmed—it was the extraordinary speed at which temperatures appear to have changed in Greenland.

The evidence is remarkable.

A classic Nature paper by Severinghaus and colleagues, using nitrogen and argon isotopes trapped within Greenland ice cores, demonstrated just how dramatically colder Greenland was during the Younger Dryas compared with today.

Subsequent work by Buizert et al., published in Science, reconstructed temperatures throughout the last deglaciation and found that while much of the warming after the last Ice Age occurred gradually over around 6,000 years as orbital cycles and atmospheric CO₂ changed, this long-term trend was interrupted by several astonishingly abrupt climate shifts.

Among them were:

• a warming of around 10–15°C beginning roughly 14,700 years ago;

• a rapid cooling of 5–9°C around 12,800 years ago, marking the onset of the Younger Dryas; and

• perhaps most remarkably, an abrupt warming of approximately 8–11°C beginning around 11,600 years ago, signalling the end of the Younger Dryas and the beginning of the Holocene—the stable climatic period in which all recorded human civilisation has developed.

NOAA summarises this final transition rather succinctly:

“At the end of the Younger Dryas, about 11,500 years ago, temperatures in Greenland rose about 10°C in a decade.”

Whether that represents a regional Greenland signal or broader hemispheric change is an important distinction, but either way it is an extraordinary reminder that Earth’s climate system is capable of changing far more rapidly than many people might imagine.

It reminded me of another book, Green Murder (2021), by eminent Australian Geologist Dr. Ian Plimer who is Emeritus Professor of Earth Sciences at the University of Melbourne. Over a career spanning more than five decades, he has held professorships at the Universities of Melbourne, Adelaide and Newcastle, published more than 120 peer-reviewed scientific papers, co-edited the five-volume Encyclopedia of Geology. His expertise is in geology, mining and Earth's long-term geological history kind of made him required reading in my circles. His book made another claim that caught my attention—that for roughly 80% of the past 300 million years, Earth has existed without permanent polar ice sheets.

Again, I haven’t independently verified every aspect of that statement, but the broader geological record certainly tells us that today’s ice-covered poles are not the Earth’s permanent state. Over deep geological time the planet has cycled repeatedly between greenhouse worlds and icehouse worlds.

I don’t pretend to be a climate scientist.

But reading these studies has left me with a broader reflection.

The public discussion around climate often presents change as though it is something entirely unprecedented. Yet the geological record tells us that the Earth’s climate has always been dynamic, sometimes gradually, sometimes with astonishing speed.

That doesn’t answer the modern debate about the role of human emissions. Nor does it diminish the importance of understanding anthropogenic climate change. Those are separate scientific questions.

What it does remind me of is something perhaps more important.

Nature is vastly more complex than simple narratives allow.

The climate system has changed dramatically before humans existed. It has shifted abruptly. It has stabilised. It has oscillated over timescales ranging from decades to millions of years.

Perhaps the lesson is not that we know less than we think.

Perhaps the lesson is that we should approach the subject with a little more intellectual humility than is often displayed by either side of the debate.

Sometimes the most interesting discoveries don’t confirm what we already believe.

They simply remind us how little we know about how extraordinary our planet really is. Food for thought.

For years, the energy debate has revolved around wind versus solar, fossil fuels versus renewables, climate versus economics. But quietly, almost unnoticed, the conversation has changed.

The world’s largest technology companies are no longer asking how cheap electricity is.

They’re asking whether there will be enough electricity at all, because every single one of their growth plans are dependent on it.

Artificial intelligence, data centres, electrification, industrial reshoring and energy security have fundamentally altered the equation. Vastly increased, reliable, 24-hour power has become a strategic asset. Suddenly, nuclear power, dismissed by many for decades, is back at the centre of the conversation.

Microsoft is restarting Three Mile Island.

Amazon is buying nuclear-powered data centres.

Google is investing in small modular reactors.

More than thirty countries have pledged to triple nuclear capacity by 2050.

The nuclear renaissance has begun.

Or has it?

Because while politicians are announcing reactors and investors are piling into uranium miners, there is one uncomfortable question almost nobody is asking.

Can we actually fuel all these reactors?

I recently finished reading one of the best deep dives on nuclear markets I have come across, There Is No Alternative – The Definitive Guide to Nuclear: Uranium, Enrichment and the Supply Chain Behind 440 Reactors, a comprehensive examination of nuclear power, uranium and the global fuel cycle by TSCW. While the paper makes a compelling long-term case for nuclear, it also reinforced something I’ve become increasingly concerned about.

The constraint isn’t demand.

The constraint isn’t technology.

The constraint is the supply chain, and in its present form, in the West it cannot keep up.

We’ve Finally Realised We Need Nuclear...

The investment case for nuclear has become increasingly compelling.

Three irreversible trends are converging simultaneously:

• exploding electricity demand from AI;

• widespread electrification of transport and industry;

• rising energy consumption across developing economies.

For decades we believed renewables alone could deliver the energy transition.

Physics is proving otherwise.

The full solar supply chain for delivered electricity is not cheap, and in built intermittency (it only works when the sun shines) means not only does it need expensive back up batteries, but also significant grid expansions and accompanying baseload to be built alongside it.

Wind has many of the same issues, and while it is slightly more efficient, it is even harder to permit.

Modern batteries solve hourly balancing, they do not solve, daily, weekly and monthly let alone seasonal storage (think winter).

And data centres don’t care whether it’s cloudy or windy.

A hyperscale AI campus needs power every second of every day.

Electricity has quietly become infrastructure rather than simply a commodity.

That changes everything.

Physics Doesn’t Care About Politics

One of the reasons I enjoyed the paper is that it keeps returning to first principles.

Politics can change.

Subsidies come and go.

Governments change every few years.

Physics doesn’t.

Nuclear possesses three characteristics that no other low-carbon technology currently combines:

• approximately 92% capacity factors;

• extraordinary energy density;

• continuous 24-hour generation.

One uranium fuel pellet the size of the end of your finger contains roughly the same energy as:

one tonne of coal;

149 gallons of oil;

17,000 cubic feet of natural gas.

That isn’t an engineering breakthrough.

It is simply how nature works.

Which is why nuclear has quietly become indispensable, and the only commercially viable solution for meeting the surge in global electricity demand.

Investors Are Looking in the Wrong Place

Most investors think uranium.

Some think reactor builders.

A few think small modular reactors.

I think they’re all missing the most important part of the story.

Nuclear isn’t one industry.

It’s an ecosystem.

Mining is only the first step.

Before uranium reaches a reactor it must be:

• mined

• milled

• converted

• enriched

• fabricated into fuel assemblies

Every one of those stages requires specialised facilities that take years—often decades—to permit and construct.

And unlike copper or gold, you cannot simply ship concentrate to whichever refinery offers the best price.

The nuclear fuel cycle is among the most regulated industrial systems on Earth.

Which means capacity cannot appear overnight.

The Real Bottleneck Isn’t Just Uranium

Everyone talks about uranium supply.

Almost nobody talks about conversion and enrichment.

People often assume that once uranium is mined, the problem is solved.

It isn’t.

Natural uranium contains only around 0.7% fissile uranium-235.

Commercial reactors require approximately 3–5% enrichment.

That enrichment process requires extraordinarily sophisticated centrifuge technology, billions of dollars of investment and years to construct.

It cannot simply be scaled because governments announce new reactors.

Conversion and enrichment may become the defining geopolitical bottleneck of the next energy era, in fact it already is we are using over 90% of present available global capacity.

Today:

Conversion capacity is concentrated in only a handful of facilities worldwide.

• Canada ~20–25%

• France 20–25%.

• Russia~20–25%

• United States 10–15%

• China ~5–10%

Enrichement Capacity:

• Russia~40–45%

• China~15–20%

• France~10–12%

• US ~10–12%

• Netherlands ~7–8%

• UK ~7%

• Germany~5–6%

And while Russia and China have proven they can scale up, the rest of the world has proven the opposite. It takes years to permit and build a mine and those mines services the supply chains they are plugged into.

Over 85% of Global Uranium in 2025 came from 3 countries

Breakdown by top 5 countries (tU; % of mine supply):

1. Kazakhstan: 23,270 (38.6%)

2. Canada: 14,309 (23.8%)

3. Namibia: 7,333 (12.2%)

4. Australia: 4,598 (7.6%)

5. Uzbekistan (est.): 4,000 (6.6%)
   Other: 6,703 (11.1%)

Kazakhstan andUzbekistan produce over 45% of global mined uranium, and Russia has siginficant unstated reserves (they dont report to USGS).

Over 50 percent of global uranium export infrastructure runs through Russia.

My Bigger Concern

This is where I begin to diverge slightly from the otherwise excellent paper.

I think the industry may actually be underestimating the scale of the coming fuel problem.

Today, everything appears manageable.

Utilities still have inventories.

Secondary supplies continue to support the market.

Underfeeding has helped increase effective uranium availability.

Some military material has been downblended into civilian fuel.

Mine supply plus these secondary sources have, so far, been enough.

But we are at a tipping point.

There is no more military material to downblend

Utilities have run down all their inventories

We don’t have time to keep overfeeding which was always something we could only do while the market was in oversupply.

No Western mines or development stage projects are going to be able to significantly increase production in the next 5 years, let alone get it converted to fuel rods.

It typically takes 12–24 months from mined U₃O₈ (”yellowcake”) to be converted, enriched, and load loaded fuel rods that can fuel a reactor.

And that is assuming you have spare conversion, enrichment and fuel assembly plant capacity, which we don’t.

We are mistaking temporary adequacy for long-term security.

Because several trends are converging simultaneously.

• Secondary supplies are gradually diminishing.

• Western countries are rebuilding defence capabilities.

• Russia is becoming a less acceptable supplier.

• New uranium mines are bottlenecked by western development timelines.

• New conversion and enrichment facilities arent even in advanced planning, and they take years to build.

Meanwhile governments continue announcing reactor programmes, but people dont seem to realise, the typical Western build takes 20 years through permitting to production.

Western reactor builds are on average 4x more expensive and tale 4x longer than Russia or China, using the exact same technology.

Hyperscalers continue signing nuclear agreements.

And investors continue assuming fuel will simply appear.

I am not convinced it will.

The SMR Assumption

Small Modular Reactors have become one of the hottest investment themes in energy.

I understand why.

They promise:

lower capital costs;

faster deployment;

factory manufacturing;

distributed generation.

They may well succeed.

But right now there isnt one working commercially viable SMR built.

And there is one assumption built into virtually every SMR presentation I have seen.

That assumption is this:

Fuel will be available.

What if that assumption is wrong?

Every new reactor ultimately competes for the same upstream supply chain.

Many advanced reactor designs also require specialised fuels that currently have even more limited production capacity.

Building reactors is one challenge.

Fueling them is another entirely.

The Market and Higher Prices cannot solve this

Many investors instinctively assume higher uranium prices solve everything.

Mining doesn’t work that way.

Mining responds very slowly.

Uranium mining responds even more slowly.

Permitting is lengthy.

Environmental approvals are extensive.

Processing facilities are specialised.

Conversion plants are scarce.

Enrichment plants are scarcer still.

Building an entire fuel cycle takes decades, not years.

Which means by the time markets recognise shortages, there may be little anyone can do in the short term.

Goldman Sachs and Sprott

Goldman Sachs and the Sprott Physical Uranium Trust are now explicitly framing uranium as entering a multi‑decade structural demand uptrend, driven by reactor growth, SMRs and AI‑era baseload needs.

Goldman’s “Nuclear Nuggets” work argues this is structural demand shift, that long‑term uranium demand assumptions have risen materially, while supply forecasts have barely moved, creating a widening cumulative deficit through 2045.

Their updated model bakes in roughly 20 new U.S. reactors between 2025–2045, several restarts, resumed construction at shelved projects, and raising assumed reactor lifetimes from about 75 to 80 years, all of which adds incremental uranium burn each year.

SMRs are now in the model. A 2026 update explicitly incorporates small modular reactors, projecting nearly 46 GW of SMR capacity by 2045, which alone adds an estimated 62 million pounds of extra uranium demand (almost double present demand) and pushes overall 2045 demand up ~17% versus Goldman’s prior forecast.

Across conventional reactors and SMRs, Goldman now sees a cumulative uranium supply‑demand gap on the order of 1.9–2.3 billion pounds of U₃O₈ between 2025 and 2045, implying a structural shortfall of roughly 30%+ if new mines lag build‑out.

AI, electrification and policy are the drivers. They tie the nuclear build‑out to AI/data‑centre baseload, EV penetration, hydrogen and desalination, arguing that these electrification trends push policymakers toward round‑the‑clock low‑carbon power where nuclear is one of the few scalable options.

Goldman’s conclusion is that this long‑term imbalance is “laying the groundwork for a new contracting cycle,” with rising term contracting volumes and sustained upward pressure on uranium prices rather than a transient squeeze.

Sprott’s recent commentary emphasises that spot prices and miners have rallied on tight supply and a surge in utility contracting, reinforcing investor conviction that the bull case is underpinned by fundamentals rather than speculation.

They highlight accelerating long‑term contracting by utilities, driven by concerns over future availability and geopolitical risk, which pulls more pounds into long‑term commitments and leaves less discretionary volume in the spot market.

Supply response has been slow and fragile. Sprott stresses that many mines were idled after Fukushima, new projects have long lead times, and key suppliers like Kazakhstan and Canada face both technical and political constraints, so supply cannot quickly match the new demand trajectory. Despite Australia’s theoretical reserves, Olympic Dam is primarily an Iron Copper and Gold mine, and Uranium is an extremely low grade bi-product, it cannot ramp up supply.

Both reports position physical uranium and uranium miners as vehicles to express a view on this emerging structural deficit, arguing that the combination of growing reactor fleets, SMR deployment and decarbonisation makes uranium a “scarce energy transition metal” with asymmetric upside.

Taken together, the sell‑side (Goldman) and buy‑side/vehicle (Sprott) narratives are converging on the same core idea: uranium demand is being revised up meaningfully for the next 20 years, while supply additions are slow, geographically concentrated and policy‑sensitive, setting up both an investment story and a geopolitical one.

But even those analyses largely focus on uranium mines, which without conversion and enrichment capacity are stranded assets, even if they could miraculously find a way to ramp up production.

We’ve Seen This Movie Before

The mining industry has repeatedly underestimated future demand.

Copper.

Nickel.

Lithium.

Rare earths.

Each time the market assumed supply would respond.

Each time permitting and project development proved much slower than expected.

Nuclear may simply represent the same phenomenon on a much larger geopolitical scale.

Except this time the bottlenecks are not confined to mining.

They’re embedded throughout the entire fuel cycle.

The West Isn’t Just Racing Against Demand—It’s Racing Against Strategy

There is another dimension to this story that receives remarkably little attention.

While much of the West spent the past 25 years allowing its nuclear fuel cycle to atrophy, China and Russia spent the same period systematically consolidating theirs. They didn’t just build reactors; they invested across the entire value chain—uranium mining, conversion, enrichment, fuel fabrication, reactor technology and long-term fuel contracts.

Over the past two decades, China has added roughly 2–3 nuclear reactors per year on average (accelerating to 6–10 approvals or construction starts annually in recent years), growing its operating nuclear fleet at an approximate 9–10% compound annual rate, while Russia has added around one reactor every 1–2 years domestically with nuclear capacity growing at roughly 1–2% CAGR, instead focusing much of its expansion on exporting reactors abroad.

At the same time, they continued investing in the technologies likely to define the next generation of nuclear power. China has commercialised the world’s first Generation IV high-temperature gas reactor, is leading development of thorium molten salt reactors, is bringing its Linglong One SMR to market, and continues expanding its nuclear submarine fleet. Russia has leveraged decades of experience operating nuclear-powered submarines and the world’s only fleet of nuclear icebreakers to develop floating nuclear power stations and land-based small modular reactors capable of powering remote Arctic and Siberian communities, while remaining the global leader in commercial fast breeder reactor technology.

What strikes me is that neither China nor Russia sees nuclear simply as a way to generate electricity.They see it as a strategic industrial ecosystem that underpins energy security, AI infrastructure, military power, Arctic development, shipping, mining and geopolitical influence.

They are building an integrated strategic capability that spans:

• civilian electricity generation

• industrial heat

• hydrogen production

• desalination

• AI data centres

• Arctic logistics

• remote mining

• naval propulsion

• submarine fleets

• floating cities

• export finance

• fuel-cycle dominance

• advanced reactor R&D

The West often asks, “How many reactors should we build?”

China and Russia are asking a much bigger question:

“How do we build a complete nuclear industrial ecosystem that gives us strategic, economic and geopolitical advantage for the next century?”

That is why I believe the coming challenge extends far beyond uranium itself. If global demand accelerates faster than Western fuel-cycle capacity can be rebuilt, countries that already control much of the world’s enrichment, conversion and advanced reactor capability are unlikely to prioritise supplying strategic competitors. After spending a quarter of a century securing these advantages, it would be surprising if China and Russia chose to surrender them just as they become most valuable.

The world may discover that the greatest constraint on the nuclear renaissance is not building reactors—but rebuilding an industrial ecosystem that others never allowed to disappear.

The Calm Before the Storm?

Perhaps I’m wrong.

Perhaps enough mines will be financed.

Perhaps conversion capacity expands quickly.

Perhaps enrichment plants are built faster than history suggests.

Perhaps we re-learn how to build nuclear on time on budget.

Perhaps governments finally coordinate industrial policy effectively.

I hope so.

Because if they don’t, we could find ourselves in an extraordinary position.

For the first time in decades, the world may genuinely want to build nuclear power at scale.

Yet the limiting factor may not be engineering.

It may not be finance.

It may not even be politics.

It may simply be the inability to produce enough nuclear fuel.

That is not a problem you solve with subsidies.

It is not solved with speeches.

It is solved twenty years earlier through patient investment in mines, conversion plants, enrichment facilities, skilled workforces and long-term industrial strategy.

Unfortunately, much of the West stopped doing exactly that after Fukushima.

China didn’t.

Russia didn’t.

Today we are trying to rebuild capabilities that quietly disappeared over several decades.

Industrial ecosystems are easy to lose.

Very difficult to recreate.

The Bottom Line

The nuclear renaissance is real.

The demand is real.

The physics are undeniable.

The strategic importance is obvious.

But investors, policymakers and hyperscalers appear to be focusing almost entirely on reactors while paying surprisingly little attention to the extraordinarily fragile supply chain that sits behind every kilogram of nuclear fuel.

The world currently has just enough.

That is very different from having enough for the future.

My concern is that we are standing in the calm before the storm.

Everyone is celebrating the return of nuclear.

Very few are asking whether we have invested enough to fuel it.

If we have the industrial ecosystem to support it.

History suggests that when demand meets decades of underinvestment, commodity shortages rarely announce themselves politely.

They simply arrive.

And by then, it is already too late.

Conclusion

The world’s electricity system has reached a point where reliable, high-capacity, low-carbon generation is indispensable. Nuclear’s unique combination of reliability, energy density and scalability makes it exceptionally difficult to replace. While reactors receive most public attention, the real strategic value lies within the complex global fuel cycle, mining, enrichment and conversion, where decades of underinvestment and geopolitical concentration have created critical vulnerabilities. As AI, industrial electrification and energy security concerns continue to accelerate demand, the countries and companies that control these bottlenecks are likely to hold disproportionate strategic and economic advantages over the coming decades. The coming nuclear renaissance is not being driven by ideology but by the immutable constraints of physics, infrastructure and national security, and what is very clear to me is we are nowhere near ready…..

The Deep Sea, the final frontier. Welcome to Sanya, it’s mission is to explore, seek out new territory, and new resources, to boldly go where no man has gone before.

Cape Canaveral where America built the worlds first space ecosystem.

The mistake most people make when most people think of Cape Canaveral, they picture rockets.

Saturn V.
The Space Shuttle.
Falcon 9.

But rockets are simply the visible output.

Cape Canaveral’s real achievement was creating an entire ecosystem where government, the military, academia, private industry and infrastructure evolved together over generations.

America did not simply build a launch pad. It built the world’s first integrated space cluster. That distinction matters because China appears to have understood this lesson exceptionally well.

Until World War II, Cape Canaveral was essentially a quiet beach community.

Residents made a living from:

• commercial fishing

• shrimping

• citrus

• small-scale tourism

• beach cottages

There were very few permanent residents.

Modern Cape Canaveral began as a military test range

Following the Second World War, the United States recognised that missile technology would define future military power.

In 1949, the U.S. established the Joint Long Range Proving Ground at Cape Canaveral.

Soon afterward it became the Cape Canaveral Air Force Station.

The location was almost perfect.

• Launches could head east over the Atlantic Ocean.

• Failures posed minimal risk to populated areas.

• Florida’s climate allowed year-round testing.

• Thousands of square kilometres of restricted air and sea space could be controlled.

Originally, this was purely a relatively small military installation.

But it laid the foundations for something much larger.

The first missile launches began in the early 1950s.

Then came one of the defining moments in history:

• 1957: Sputnik crisis

• 1958: the United States launched Explorer 1 launch from Cape Canaveral.

The success of Explorer 1 marked America’s entry into the Space Age.

NASA transformed a missile range into a national innovation hub

When NASA was created in 1958, Cape Canaveral suddenly became more than a military facility.

The neighbouring Kennedy Space Center became the centrepiece of America’s civilian space programme.

Suddenly, one location brought together:

• launch facilities

• rocket design

• astronaut training

• systems engineering

• mission control

• satellite development

• propulsion research

• universities

• federal laboratories

• defence contractors

Every successful launch attracted more investment.

Every new programme required more suppliers.

Every supplier attracted more engineers.

Every engineer attracted more universities.

The ecosystem became self-reinforcing.

The cluster effect

Like Silicon Valley for software, Cape Canaveral became a geographic concentration of specialised knowledge.

Companies wanted to locate nearby because that was where:

• NASA was spending billions.

• The U.S. military was testing advanced systems.

• Engineers wanted to live.

• Universities produced aerospace graduates.

• Supply chains already existed.

Success bred more success.

Today, Florida’s Space Coast supports tens of thousands of high-skilled jobs across launch services, satellite manufacturing, defence, advanced materials, software, robotics and aerospace engineering.

The rockets are simply the most visible part.

Government spending created commercial opportunity

One of the great myths is that America’s space industry was built by private enterprise alone.

In reality, it was decades of government investment that reduced technological risk before private companies commercialised it.

NASA funded research.

The Department of Defense funded capability.

Public universities trained talent.

Private companies supplied components.

Eventually those companies became giants.

This is how an industrial ecosystem develops.

Not through isolated projects.

Through cumulative investment over generations.

The commercial revolution

The arrival of SpaceX changed the economics of launch.

Rather than replacing NASA, commercial launch providers were able to build upon seventy years of accumulated infrastructure.

Cape Canaveral already had:

• launch complexes

• tracking systems

• engineers

• suppliers

• logistics

• ports

• regulatory expertise

• testing facilities

• highly specialised labour

SpaceX inherited an ecosystem that had been decades in the making.

Blue Origin, United Launch Alliance and many smaller firms have done the same.

Commercial space did not replace government.

It emerged because government had already built the foundations.

Cape Canaveral today

Modern Cape Canaveral is not simply a city.

It is one of the world’s most important aerospace clusters.

It combines:

• NASA

• the U.S. Space Force

• commercial launch providers

• defence contractors

• satellite manufacturers

• universities

• research laboratories

• Port Canaveral

• specialised manufacturing

• tourism

• STEM education

Each reinforces the others.

Why this matters

When observers compare China’s Sanya development with Cape Canaveral, they often focus on the number of ships, laboratories or research institutes.

That misses the point.

The comparison is not between two cities.

It is between two ecosystems.

America spent roughly 75 years building the world’s most sophisticated space cluster.

China appears to have studied that model closely—and has attempted to compress much of the same development into just 25 years.

Whether it succeeds remains to be seen.

But one thing is already clear.

China is not simply building research vessels.

It is building an ecosystem.

And ecosystems—not individual technologies—are what ultimately determine technological leadership.

A Short History of Sanya

Until 1988 Sanya was a remote fishing town on China’s southern frontier. Its transformation into one of China’s most strategically important science and technology hubs has occurred almost entirely within the past 25 years.

Hainan Island, where is China’s southernmost province, a tropical island of around 34,000 km² located in the northern South China Sea. On its southern tip lies Sanya, a naturally sheltered deep-water port with year-round access to the South China Sea and the western Pacific. Positioned near some of the world’s busiest shipping lanes and close to the contested waters of the Paracel and Spratly Islands, Sanya combines favourable operating conditions, strategic maritime access and proximity to deep ocean waters,

An ancient frontier

Known historically as Yazhou, Sanya has been inhabited since the Qin and Han dynasties. Because of its tropical climate and distance from China’s imperial capitals, it occupied the edge of the Chinese empire for centuries.

For much of imperial history, it was known less as a centre of commerce than as a place of exile. Officials who fell from favour were often banished to Hainan, then regarded as a remote and inhospitable island far from the political heart of China.

Its economy revolved around:

• Fishing

• Small-scale agriculture

• Maritime trade

• Pearl diving

• Coastal villages

For centuries, Sanya remained relatively isolated from the rapid economic development occurring in eastern China.

Reform and opening

Everything changed after China’s economic reforms began in 1978.

When Hainan became China’s largest Special Economic Zone in 1988, infrastructure investment accelerated dramatically. Roads, ports, airports and tourism facilities transformed the island, and Sanya emerged as China’s premier tropical tourist destination.

Luxury resorts, international hotels and modern transport links followed, making tourism the city’s dominant industry throughout the 1990s and early 2000s.

A strategic pivot to science and technology

Around the turn of the century, Beijing began viewing Sanya not simply as a tourist city but as a strategic location.

Its geography offered several unique advantages:

• Direct access to the South China Sea.

• Deep water close to shore.

• Year-round operating conditions.

• Proximity to contested maritime regions.

• Easy access to some of the deepest waters in the western Pacific.

Rather than allowing Sanya to remain solely a tourism hub, China invested heavily in marine science, ocean engineering and deep-sea technology.

The birth of China’s deep-sea ecosystem

The defining moment came with the creation of the Yazhou Bay Science and Technology City.

Over little more than two decades, Sanya has developed into China’s principal centre for:

• Deep-sea science.

• Ocean engineering.

• Marine robotics.

• Submersible development.

• Ocean-floor mapping.

• Marine biotechnology.

• Polar and deep-ocean research.

The city is now home to:

• Branches of the Chinese Academy of Sciences.

• The Institute of Deep-Sea Science and Engineering.

• Multiple universities and national laboratories.

• China’s most advanced research submersibles.

• A growing cluster of marine technology companies.

Sanya today

Today, Sanya is far more than a beach resort.

It has become one of China’s most important strategic research hubs, combining:

• Tourism.

• Advanced scientific research.

• Marine engineering.

• National laboratories.

• Commercial innovation.

• Ocean technology.

• Naval and maritime infrastructure.

Its evolution reflects a broader shift in Chinese industrial policy: using concentrated, long-term investment to create specialised innovation ecosystems around sectors considered strategically important.

This transformation—from a relatively modest coastal city into China’s leading deep-ocean research hub in roughly 25 years—is what makes Sanya such an interesting comparison with Cape Canaveral. While the two cities focus on different frontiers—space and the deep ocean—they illustrate a similar strategic principle: sustained government investment can create an ecosystem where research, infrastructure, talent and industry reinforce one another, accelerating technological leadership.

Why China Built It

Instead of scattering marine research across multiple cities, China has concentrated virtually every component of its deep-sea ecosystem into one integrated hub.

That includes:

• Deep-ocean research

• Marine engineering

• Underwater robotics

• Ocean mapping

• Offshore energy technology

• Deep-sea communications

• Commercialisation of marine technologies

• University research

• Scientific expeditions

The objective appears to be reducing the gap between research, engineering and deployment.

The Institutes

More than a dozen major universities and research institutes have established facilities within Yazhou Bay, including:

• The Institute of Deep-Sea Science and Engineering

• Shanghai Jiao Tong University

• Ocean University of China

• Zhejiang University

• China Agricultural University

• Wuhan University of Technology

These institutes are specifically intended to support China’s national deep-sea capability and accelerate the transition from research into operational technologies.

The Fleet

Sanya is homeport or operational base for many of China’s flagship deep-sea assets, including:

• Fendouzhe

• Deep Sea Warrior

• Jiaolong

• the Tansuo exploration vessels

• China’s newest polar-capable research vessel, Tan Suo San Hao, which can deploy crewed submersibles and autonomous underwater vehicles.

Infrastructure

The Deep-Sea Science & Technology City includes:

• specialised laboratories

• deep-sea engineering facilities

• underwater robotics development

• marine materials research

• subsea communications technology

• innovation centres

• technology incubators

• exhibition facilities

• direct access to Nanshan Port, which is being developed to berth around 20 research and support vessels simultaneously.

Why Sanya Is So Important

This is what makes Sanya different from most marine research centres.

China hasn’t built:

• one laboratory;

• one university;

• one research vessel.

It has built an entire deep-sea ecosystem.

Scientists, engineers, shipbuilders, autonomous vehicle developers, AI researchers, ports, universities, research vessels and private deep oceam commercial interests all sit within the same innovation cluster, dramatically shortening the path from scientific discovery to operational capability.

The Strategic Takeaway

Sanya isn’t a research park. It’s a mission control operating system for mastering the oceans.

If Beijing believes that the next geopolitical frontier lies beneath the sea rather than above it, then Sanya is where that future is being built.

China Built Its Own Deep Sea Cape Canaveral. The West Barely Noticed.

During the Cold War, the United States concentrated America’s space ambitions at Cape Canaveral.

It became the place where:

• NASA

• contractors

• military programmes

• universities

• engineers

• scientists

• launch facilities

• testing

• manufacturing

all converged.

The result wasn’t just rockets.

It created an entire innovation ecosystem that eventually produced GPS, satellites, commercial launch, SpaceX and much of today’s space economy.

Sanya is doing exactly the same thing—for the oceans.

Why spend decades and tens of billions building capability in one of the most difficult environments on Earth?

Because Beijing increasingly appears to believe something many Western governments still do not.

The deep ocean will become one of the defining strategic domains of the twenty-first century.

The ocean is becoming a strategic operating system

People still think about the oceans primarily as shipping routes.

China increasingly appears to view them as something much larger.

The oceans are simultaneously becoming:

• the next energy frontier;

• the next mining frontier;

• the backbone of global communications;

• an increasingly important intelligence domain;

• an autonomous robotics environment;

• a naval battlespace;

• and potentially the largest unexplored economic frontier left on Earth.

Nearly half the planet still lies beneath oceans that remain only partially explored.

If mastery of space defined geopolitical prestige in the twentieth century, mastery of the deep ocean may define strategic advantage in the twenty-first.

Sanya isn’t really a city

It is an ocean intelligence system.

Everything feeds everything else.

Research informs engineering.

Engineering develops vehicles.

Vehicles collect data.

Data improves mapping.

Mapping identifies resources.

Resource knowledge supports commercial development.

Commercial capability supports naval capability.

Naval capability protects commercial interests.

Universities produce the next generation of scientists.

Industry commercialises discoveries.

It is one integrated ecosystem.

Military-civil fusion beneath the sea

China’s also has an official doctrine of Military-Civil Fusion.

The strategy seeks to reduce barriers between civilian research, commercial innovation and defence applications. In the deep-ocean context, many technologies naturally have dual-use potential:

• autonomous underwater vehicles;

• advanced sonar and sensing;

• seabed mapping;

• underwater communications;

• deep-ocean robotics;

• pressure-resistant materials;

• precision navigation.

These technologies support scientific research and commercial activity, but they can also enhance naval operations, undersea surveillance and protection of critical infrastructure. That does not mean every civilian programme has a military purpose, but it does mean investments can generate capabilities with strategic value.

Sanya is the Cape Canaveral of the Deep Ocean

Cape Canaveral wasn’t built because America wanted to launch rockets.

It was built because America believed space would matter.

China isn’t building Sanya because it wants to operate submersibles.

It is building Sanya because it appears to believe the oceans will matter.

Most commentary treats deep-sea mining as the story.

I don’t think it is.

Mining is merely one application.

The larger story is capability.

History suggests nations rarely invest for decades in mastering an entirely new domain because of a single commercial opportunity.

Railways became military logistics.

Merchant fleets became navies.

Satellites became communications, navigation and intelligence systems.

Artificial intelligence is transforming almost every sector.

The deep ocean is likely to follow the same pattern.

A Closing Thought

One of China’s defining strategic strengths has been its ability to identify future sources of national power and patiently build the ecosystems needed to dominate them. Successive Chinese leaders have pursued long-term industrial strategies measured not in electoral cycles but in decades, systematically investing in capabilities they believe will underpin economic prosperity, technological leadership and national security.

Over the past thirty years, much of the West outsourced large parts of its industrial base and critical mineral supply chains to China in pursuit of lower costs and greater efficiency. In doing so, it surrendered not simply manufacturing capacity, but increasing control over the resources and processing capabilities that underpin modern economies. Rebuilding that strategic autonomy is proving difficult, expensive and time-consuming.

The deep ocean now appears to represent China’s next great strategic frontier.

Just as the United States and the Soviet Union competed for supremacy in space because they understood that technological leadership would shape the future balance of power, Beijing increasingly appears to view mastery of the oceans—and particularly the largely unexplored ocean floor—as a source of long-term strategic advantage.

While much of the West continues to debate whether deep-sea mining should proceed, China has spent years assembling the foundations of a complete deep-ocean ecosystem: research institutes, universities, survey vessels, submersibles, robotics, ports, mapping programmes, industrial partnerships and supporting infrastructure. These investments are not confined to resource extraction. The same capabilities underpin marine science, seabed mapping, communications, environmental monitoring, naval operations and undersea surveillance. This reflects China’s well-established civil-military fusion strategy, in which scientific, commercial and defence capabilities reinforce one another.

China is not simply pursuing deep-sea mining. It is pursuing mastery of the deep ocean.

If Cape Canaveral became the defining symbol of the twentieth-century Space Race, Sanya may one day be remembered as the place where the twenty-first century race for the deep ocean truly began.

Whether China ultimately succeeds is uncertain. What is already clear, however, is that it has recognised the strategic significance of a domain that covers more than 70 per cent of our planet and remains largely unexplored. The question for the West is no longer whether the deep ocean matters, but whether it can build the ecosystems and long-term commitment necessary to remain competitive in what may become the next great arena of technological, industrial and geopolitical competition.

America needs a Deep Sea Cape Canaveral —

Cape Canaveral was not just a launchpad. It was the physical expression of a national mission: NASA, defence contractors, universities, engineers, test ranges, supply chains, federal budgets and geopolitical urgency all concentrated into one ecosystem.

The deep ocean now requires the same treatment.

NOAA can map it. The Navy can defend it. Industry can engineer it. Universities can study it. But unless those capabilities are fused into a single national mission, America will remain scientifically brilliant, militarily capable, and strategically fragmented.

Why it matters:

The seabed is where the next strategic contest converges: undersea cables, submarine warfare, autonomous drones, sensor networks, offshore energy, deep-sea minerals, maritime chokepoints and ocean-floor mapping.

So yes, I would make this a major policy proposal:

Create a U.S. National Deep Ocean Agency or Deep Ocean Command, anchored at a dedicated deep-water port, combining NOAA, Navy, DARPA, USGS, universities and industry.

The twentieth century belonged to those who mastered the skies. The twenty-first will belong to those who master the depths.

Origins: 1970s–1990s

China’s interest in the deep seabed dates to the late 1970s, when officials at the State Oceanic Administration recognised that the polymetallic nodule prospecting then underway by the United States, France, Japan, and the Soviet Union would set the terms of any future seabed order. Beijing began funding preparatory surveys in the eastern Pacific in the early 1980s. The pivotal institutional moment came in 1990 with the founding of the China Ocean Mineral Resources Research and Development Association (COMRA), the state entity created to hold seabed claims and coordinate industrial research.

The umbrella funding mechanism was the 863 Programme (State High-Tech Development Plan), launched in March 1986 by Deng Xiaoping at the urging of four senior scientists. Marine technology was formally added as the eighth topic area in 1996, and from then on 863 became the primary conduit for financing deep-sea vehicles, sensors, and materials work.

In 1991 the UN registered China as a “pioneer investor” in seabed mining, and on 22 May 2001 COMRA signed its first exploration contract with the International Seabed Authority, covering 75,000 km² of polymetallic nodules in the Clarion-Clipperton Zone. Two more COMRA contracts followed — cobalt-rich ferromanganese crusts in the Western Pacific and polymetallic sulphides in the Southwest Indian Ridge — plus a nodule contract for China Minmetals and one for Beijing Pioneer Hi-Tech, giving China five ISA contracts covering roughly 235,000 km² — more than any other state.

The Jiaolong Era: 2001–2012

The vehicle that made China’s deep-sea programme visible to the outside world was Jiaolong, a 22-tonne crewed submersible with a titanium personnel sphere rated to 7,000 metres. Chief designer Xu Qinan led development at the 702nd Institute of the China Shipbuilding Industry Corporation, with COMRA as the operator and the State Oceanic Administration as the sponsoring ministry. Jiaolong dove to 7,062 metres in the Mariana Trench on 27 June 2012, briefly making China the deepest-diving crewed platform in the world. Roughly 60% of components were domestic — the titanium sphere was imported from Russia and the manipulators from the United States — which the leadership framed as an unfinished job to be completed by successor vessels.

The Xi Jinping Doctrine: 2012–2020

Xi Jinping’s ascent in late 2012 shifted the programme from an engineering effort into a strategic doctrine. Speaking to the Politburo study session on 8 August 2016, Xi identified the deep sea as one of three “strategic frontiers” alongside deep space and deep earth, and instructed the Party-state to “master the technologies of getting into the deep sea, exploring it, and developing its resources”.

Concrete institutional consequences followed in rapid succession. The 2015 National Security Law explicitly designated the deep sea as a domain of national security. The Deep Seabed Mining Law of 26 February 2016 (effective 1 May 2016) created the domestic licensing regime that mirrors ISA rules and gave the Ministry of Natural Resources authority over Chinese contractors. The 13th Five-Year Plan (2016–2020) enumerated deep-sea stations, seabed observation networks, and manned submersibles as national priorities. And in 2018 Xi paid a widely publicised visit to the Institute of Deep-Sea Science and Engineering (IDSSE) in Sanya, sending an unambiguous signal that the campus was to become the operational spine of the whole programme.

Two new submersibles emerged from this period. Shenhai Yongshi (“Deep-Sea Warrior”), delivered in October 2017, was rated to 4,500 metres and reached ~95% domestic content, with Zhao Yang as chief designer. Fendouzhe (“Striver”) reached 10,909 metres in the Mariana Trench on 10 November 2020, briefly setting the world crewed depth record; chief designer Ye Cong led an 800-million-yuan (~$122 million) programme that took domestic content above 96.5%, including a fully Chinese titanium personnel sphere.

The 14th and 15th Five-Year Plans (2021–2030)

The 14th FYP (2021–2025) named “deep-sea, deep-earth, deep-space, and polar” as one of seven “frontier science and technology” priorities and directed the establishment of a National Deep-Sea Base network. The forthcoming 15th FYP (2026–2030), previewed in State Council communications through 2025 and 2026, folds deep-sea resource characterisation, deep-sea observation, deep-sea equipment manufacturing, and deep-sea engineering standards into the broader “Maritime Power” (海洋强国) programme, and treats seabed critical minerals as a national resource-security priority alongside terrestrial critical minerals.

Funding

There is no single published deep-sea budget line. Financing flows through at least five channels: (i) the successor programmes to 863 and the parallel 973 Basic Research Programme, now consolidated under the National Key R&D Programme; (ii) direct Ministry of Natural Resources allocations to COMRA and the National Deep-Sea Center in Qingdao; (iii) Chinese Academy of Sciences institutional funding to IDSSE, the Institute of Oceanology in Qingdao, and the South China Sea Institute of Oceanology in Guangzhou; (iv) provincial Hainan and Guangdong subsidies channelled through Sanya’s Yazhou Bay Science and Technology City; and (v) State-Owned Assets Supervision authority over the shipbuilding, offshore-engineering, and materials SOEs that build the platforms. Individual programme costs that have been publicly disclosed include the ~800-million-yuan Fendouzhe programme and a comparably scaled Mengxiang drillship build.

The Fleet

China now operates the most numerically and technically diverse deep-sea fleet in the world. Independent tracking by Mongabay-CNN in 2026 identified more than 40 dedicated deep-sea research and survey vessels, with 246 named deep-sea dives conducted in 2024 alone. Only 6.4% of Chinese research vessel sea time was spent inside declared ISA exploration blocks, indicating that most operational effort is directed at survey, science, and dual-use activity outside the international-area contract system.

For comparison, contemporaneous foreign crewed submersibles include Alvin (United States, 6,500 m as of 2021 upgrade), Nautile (France, 6,000 m), Mir I/II (Russia, 6,000 m, decommissioned 2013), Shinkai 6500 (Japan, 6,500 m), and DSV Limiting Factor (private, 10,925 m). China is the only state operating three crewed submersibles simultaneously, and the only state with an operational full-ocean-depth vehicle in continuous service.

Mengxiang, launched by CSSC Huangpu Wenchong and commissioned on 17 November 2024, is the largest ocean-drilling ship ever built. Xi Jinping sent a congratulatory letter marking commissioning; the ship is capable of drilling to 11 km below the seabed in 4 km of water and is intended as the platform for the Chinese-led leg of an eventual international mantle-drilling programme.

The permanent Cold Seep Manned Laboratory, being built by the South China Sea Institute of Oceanology of the Chinese Academy of Sciences, will be a 600-tonne subsea habitat rated for six crew, 2,000-metre depth, and 30-day endurance. Sea trials are planned for 2030.

In April 2026 a Chinese team publicly demonstrated a 3,500-metre-rated cable-cutting device deployed from the survey vessel Haiyang Dizhi 2, a capability with obvious dual-use implications for submarine data cables ().

The Institute Ecosystem

The programme is executed by a tight network of about a dozen lead institutes, each with a defined mandate:

• Institute of Deep-Sea Science and Engineering (IDSSE), CAS, Sanya — flagship operator of Fendouzhe, home of the Hadal Sciences Programme, principal user of the Nanshan Port berth. IDSSE occupies a 109-mu (≈7.3 ha) campus at 28 Luhuitou Road, Jiyang District, with 50,183.95 m² of floor space.

• National Deep-Sea Center, Qingdao — operator of Jiaolong and Shenhai Yongshi, custodian of the deep-sea sample archive.

• Institute of Oceanology, CAS, Qingdao — the country’s oldest oceanographic institute, lead on physical and chemical oceanography.

• South China Sea Institute of Oceanology, CAS, Guangzhou — lead on the Cold Seep Lab; principal operator in the South China Sea.

• Second Institute of Oceanography, MNR, Hangzhou — original manager of COMRA’s Southwest Indian Ridge sulphide contract.

• First Institute of Oceanography, MNR, Qingdao — polar-and-deep-sea sedimentology.

• Third Institute of Oceanography, MNR, Xiamen — marine biotech and hadal microbiology.

• China Geological Survey — Guangzhou Marine Geological Survey — operator of Haiyang Dizhi 2 and lead on gas-hydrate exploitation in the South China Sea.

• 702nd Institute, China Ship Scientific Research Center, Wuxi (CSIC) — designer of Jiaolong, Shenhai Yongshi, and Fendouzhe.

• Shanghai Jiao Tong University, School of Oceanography and State Key Lab of Ocean Engineering — lead on the floating deep-sea island platform.

• Ocean University of China, Qingdao — training pipeline for oceanographers and marine engineers.

• Tongji University, Shanghai — lead academic partner on Mengxiang and on the International Ocean Discovery Programme legs.

• Hainan Deep-Sea Technology Innovation Center — the industrial/commercialisation arm inside Yazhou Bay Sci-Tech City.

Sanya: The Deep-Sea Capital

Sanya sits at the southern tip of Hainan Island, at roughly 18°N, giving it year-round warm water, direct blue-water access to the South China Sea and Pacific approaches, and — crucially — the shortest transit in China to water more than a kilometre deep. It is 128 km from the port at Nanshan to 1,000-metre depths, less than a fifth of the equivalent distance from any northern Chinese port.

Administratively, Sanya is a prefecture-level city with an area of 1,919.58 km², a jurisdictional sea area of about 6,000 km², and a resident population of 1,116,100 at the end of 2024 (urban population ~818,000). Since 2019 it has been building out the Yazhou Bay Science and Technology, a 69.3 km² planned district on the western side of the city, of which 5.39 km² is designated as the Deep-Sea Sci-Tech Tow. As of 2024 the district hosted 9,649 registered enterprises, 32 provincial-level scientific platforms and 4 national platforms, and the city government has committed to making YZBSTC “the innovation core of the Hainan Free Trade Port”.

Within YZBSTC, four assets anchor the deep-sea programme:

1. IDSSE Luhuitou campus — the institute Xi visited on 12 April 2018. It occupies a 109-mu site on the Luhuitou Peninsula at 28 Luhuitou Road with 50,183.95 m² of floor space, houses Fendouzhe’s operational crew and the Hadal Sciences Programme, and is the principal science tenant of the Nanshan Port berth.

2. Nanshan Port Deep-Sea Research Berth — a purpose-built research pier of 278 metres with 428 metres of associated shoreline, serving Fendouzhe, Shenhai Yongshi (when southern-deployed), and more than 60 research units. The port is planned to handle roughly 1,023 research voyages per year at full build-out.

3. Deep-Sea Sci-Tech Town (5.39 km²) — the district within YZBSTC that concentrates equipment manufacturers, materials firms, and testing facilities for submersibles, remotely operated vehicles, autonomous underwater vehicles, sensors, subsea power, and pressure-tolerant electronics. Anchor tenants include units of China Shipbuilding Industry Corporation, Shanghai Jiao Tong University’s satellite lab, and the Hainan Deep-Sea Technology Innovation Center.

4. Hainan Free Trade Port customs and finance regime — since 2020 YZBSTC has benefited from streamlined equipment imports, foreign-exchange flexibility, and a 15% preferential corporate tax rate, all of which materially reduce the cost of deep-sea research relative to any other Chinese location.

Why China Values the Deep Sea (Officially)

Six strategic logics converge:

1. Critical-mineral supply security. Polymetallic nodules concentrate cobalt, nickel, manganese, and copper — precisely the inputs to batteries, permanent magnets, and stainless steel where China already dominates midstream processing. Seabed nodules would extend that dominance upstream and hedge against terrestrial supply disruption.

2. Cobalt-crust and sulphide optionality. Cobalt-rich crusts on Pacific seamounts and polymetallic sulphides on the Southwest Indian Ridge give China alternative resource pathways with different mineralogies and different regulatory paths.

3. Gas hydrates. The South China Sea contains an estimated 80 billion tonnes oil-equivalent in methane hydrates. The Guangzhou Marine Geological Survey has already conducted two “Blue Whale” production trials from Shenhu.

4. Blue biotechnology. Hadal-zone microorganisms, cold-seep chemosynthetic communities, and deep-sea corals are the principal targets of a biotech pipeline coordinated through the Third Institute of Oceanography and IDSSE.

5. Sensing and command of the maritime approaches. Fixed seabed observation networks, cable systems, and autonomous platforms provide persistent surveillance of the South China Sea and the First Island Chain — a dual-use dimension explicitly acknowledged in the 2015 National Security Law.

6. International rule-setting. By holding more ISA contracts than any other state, staffing key ISA committees, and publishing model contract language, China intends to shape the regulatory regime under which any future seabed extraction will operate.

Strategic Vision to 2035

Publicly stated objectives for the period 2026–2035 include: continuous crewed occupation of the 2,000-metre Cold Seep Lab from 2030; operational deployment of the SJTU floating deep-sea island as a semi-permanent open-ocean science platform; industrial-scale gas-hydrate production trials in the South China Sea; the first commercial seabed nodule collection operation under the ISA Mining Code once adopted; a doubling of the deep-sea research fleet from roughly 40 to 80 vessels; and full domestic content for every category of deep-sea equipment, including the pressure hulls, syntactic foams, thrusters, and hydraulic systems still partly sourced abroad.

Outlook

China’s deep-sea programme is now the reference case for how a state can move, in a single generation, from technological dependency to full-stack capability in a strategic domain. The combination of a codified doctrine (three deeps), a purpose-built city (Sanya / Yazhou Bay), a full fleet including the deepest and largest platforms in the world, a codified legal regime, and a dominant position at the ISA is unique. What remains uncertain is whether the ISA Mining Code will emerge in a form that permits commercial extraction, whether the environmental externalities of large-scale seabed mining can be politically absorbed, and whether the dual-use elements of the programme will provoke countervailing coalitions among the United States, Japan, India, Australia, and European partners. What is no longer uncertain is that if commercial deep-sea mining happens, China will be the state best positioned to conduct it at scale.

Abstract

Africa is rich in minerals but poor in mining-led development. Despite more than a century of extraction and repeated rounds of foreign investment, the continent still accounts for less than 8 percent of global mineral output and under 5 percent of GDP from mining, with most large projects operating as fiscal enclaves rather than development engines. This paper argues that Africa’s core weakness is not geology or investor appetite, but the absence of an indigenous mining ecosystem: policy has focused on attracting top‑down, large-scale, capital‑intensive operations while neglecting the bottom‑up formalisation and industrialisation of artisanal and small‑scale mining (ASM), where most Africans actually participate in the mineral economy.

Drawing on 40,000 years of African mining history—from Ngwenya ochre and Katanga copper to pre‑colonial gold and tin networks—the article shows that colonial regimes criminalised indigenous extraction and turned mining into a foreign‑owned enclave, a pattern that post‑independence nationalisation largely failed to reverse. Today, tens of millions of Africans work in ASM under insecure, illegal conditions, generating significant unrecorded output and an estimated tens of billions of dollars in lost annual value through smuggling and illicit trade, while large-scale mines remain too slow, capital‑heavy, and technically demanding to absorb labour or catalyse broad‑based industrialisation.

The paper proposes a new framework: formalising ASM as the “missing link” in Africa’s mineral strategy by combining legalisation, simplified digital licensing, secure tenure, and cooperative structures with microfinance, toll milling, and regional beneficiation hubs that give small miners access to modern processing, fair pricing, and traceable offtake into global supply chains. It argues that such digitally governed, microfinance‑enabled networks can transform ASM from a survival activity into a scalable engine of employment, fiscal revenue, local enterprise formation, and industrial learning, creating an organic pipeline through which African mining champions and domestic service and equipment firms can emerge.

By integrating artisanal miners into regulated, transparent supply chains, and treating large‑scale mining as long‑term infrastructure rather than short‑term rent extraction, Africa can finally unlock the strong multiplier effects of mining—linking pits to roads, power, skills, and manufacturing—and build a more equitable resource partnership with the rest of the world in the age of critical minerals. The article concludes that Africa’s next mining revolution will not be delivered by another wave of mega‑projects, but by formalising

The History of mining in Africa

Africa’s mining history is among the world’s oldest and most enduring, spanning over 40,000 years and encompassing a vast array of minerals—from pigments and iron to gold, copper, diamonds, and, more recently, critical minerals essential for modern technologies. The continent’s mining trajectory reflects indigenous innovation, extensive trade networks, colonial exploitation, post-independence struggles for sovereignty, and contemporary efforts to align mineral development with sustainable growth.

Prehistoric and Early Mining Traditions

Mining in Africa predates written history. Early humans extracted minerals for tools, pigments, and ritual purposes, demonstrating sophisticated geological awareness and adaptive technologies. The Ngwenya hematite mine at Bomvu Ridge in present-day Eswatini is among the oldest known mining sites globally, dated to over 40,000 years ago. Prehistoric miners extracted red ochre (hematite) for body paint, cave art, and ceremonial uses, and traded it across regions.

Copper extraction began more than 12,000 years ago in what is now the Katanga region of the Democratic Republic of the Congo, where surface malachite was collected and smelted for ornaments and tools—some of the worlds earliest metallurgy. These early mining activities were communal and seasonal, embedded within local subsistence systems rather than driven by external demand.

Ancient and Pre-Colonial Eras (c. 2600 BCE – 1800 CE)

From the third millennium BCE onwards, mining became integral to Africa’s emerging trade empires and the world’s first metallurgical technology development was led by African innovations. Gold and iron fuelled the rise of civilisations from Egypt to Great Zimbabwe. In Ancient Egypt, gold mining supported royal power and international trade.

Iron smelting revolutionised production across sub-Saharan Africa. In present-day Nigeria, the Nok culture (c. 1000 BCE) produced iron tools that advanced agriculture and warfare. Copper mining expanded in the Messina region of South Africa (before 900 CE), with excavations revealing trenches up to 40 metres deep supported by wooden structures.

Between 500 and 1500 CE, gold dominated trans-Saharan trade. Empires such as Ghana (c. 300–1200 CE) and Mali (c. 1230–1600 CE) exported gold from the Bambuk and Bure fields, mined by free labourers using panning and shallow shafts. In southern Africa, Great Zimbabwe (11th–15th centuries) was sustained by gold mining from sites such as Aboyne, where workings reached depths of up to 30 metres. Tin mining at Rooiberg (15th–17th centuries) further diversified local metallurgy. All of these industries were indigenous, self-organised, and technologically innovative within their contexts.

By 1800, many accessible outcrops in southern Africa had been exhausted, with oral traditions preserving geological knowledge that would later be disrupted by European colonisation.

The Nineteenth Century: Colonial Extraction and the “Scramble for Africa”

The 19th century marked a decisive shift as colonial powers reoriented Africa’s mineral wealth toward imperial economies. The discovery of diamonds in Griqualand West during the 1860s precipitated the development of the Kimberley mines, soon monopolised by Cecil Rhodes’s De Beers Company. Gold discoveries on the Witwatersrand in 1886 transformed Johannesburg into a global mining hub and drew vast inflows of European capital, but also entrenched exploitative labour systems.

Subsequent discoveries extended colonial extraction: copper in Zambia’s Copperbelt (1920s), lead and zinc in Namibia, and a host of other base metals. Mining revenues financed colonial infrastructure but reinforced economic dependency and inequality, as ownership and profits remained concentrated in foreign hands. All native mining was for the first time deemed “illegal”, a concept which is purely colonial which continues to this day ending the 40,000 year history of African artisanal mining.

Post-Colonial Era (1960s–2000): Nationalisation, Boom, and the “Resource Curse”

Independence ushered in hopes of economic sovereignty through nationalisation of mineral assets. Yet post-colonial states often inherited weak institutions, inadequate infrastructure, and limited technical capacity, while foreign companies retained dominant influence through their access to both western mining technology and practice as well as the capital and experience necessary to explore develop and run large modern mining operations, something which is much more complex than most realise. Anti-colonial sentiment led some governments to impose heavy taxation and nationalisation measures, which, in the absence of effective governance frameworks, access to global supply chains and sufficient retained earnings, led to significant falls in productivity, and deterred foreign investment. The African mining industry began a period of managed decline. The resulting cycle of mistrust between African governments and foreign investors continues to constrain the sector’s potential as a driver of sustainable development.

The Political Economy of Resource Rights: Thabo Mbeki’s Perspective

Former South African President Thabo Mbeki has argued that reclaiming the right to farm and mine constitutes more than economic redress—it represents an act of dignity, justice, and cultural restoration. In his 1978 address “The Historical Injustice,” Mbeki contended that “the liberation of the land and other resources is essential to the restoration of the dignity of the African people,” framing control over natural resources as central to both economic independence and psychological healing.

Thabo Mbeki’s broader philosophy situates resource ownership at the heart of African self-determination. He links the dispossession of land and minerals under colonial and apartheid regimes to the erosion of economic sovereignty and cultural identity, asserting that the restoration of these rights is a prerequisite for genuine liberation. In his view, access to land and mineral wealth serves not merely as an economic imperative but as a moral and existential foundation for post-colonial development—a means of restoring African dignity and historical justice.

However, the political translation of this philosophy has often manifested through state-led nationalisation and indigenisation policies, which sought to reclaim ownership from foreign powers but frequently entrenched elite control and bureaucratic inefficiency. In practice, these models substituted one form of exclusion for another, privileging large-scale industrial mining over the rights and livelihoods of ordinary Africans.

What Mbeki and many post-independence leaders did not distinguish was that the indigenous resource rights they sought to restore were, in essence, artisanal rights—the right of communities to work their own land, extract its resources, and participate directly in the material economy. Historically, artisanal mining represented precisely this form of economic and cultural sovereignty: a community-based, self-organised system of extraction and exchange, rooted in local knowledge and stewardship.

Post-colonial governments pursued industrialised mining thinking they could leapfrog from indigenous mining to industrialised mining without going through the steps to develop an industrial sector, the skills, ecosystem infrastructure, and experience and capital required to get there. They correctly believed that mastering resources was the pathway to liberation but they didn’t realised the necessary path was longer and more complex. Ironically the authentic expression of indigenous mineral rights lay in the artisanal practices they continued to marginalise. Today, the persistence of large-scale informal and illegal mining across Africa reflects not simply economic desperation, but the enduring struggle to reconcile traditional mineral rights with modern industrial frameworks. It is a continuation of the same unresolved question that Mbeki posed—how Africans can reclaim control over their natural wealth—but expressed now through a different, more decentralised form of economic agency.

Mining and Economic Development — Promise, Mechanisms, and Missed Potential

Research by the World Bank, International Finance Corporation (IFC), and the International Council on Mining and Metals (ICMM) demonstrates that mining has one of the strongest economic multiplier effects of any industrial activity. When well-governed, it drives job creation, infrastructure development, export earnings, and industrial diversification. Yet in much of Africa, these outcomes have been limited, as large-scale commercial mining has operated as an enclave industry rather than an integrated development engine.

How Mining Drives Development

Mechanism

Typical Economic Effect

Empirical Indicators

Fiscal Linkages

Taxes, royalties, and export earnings fund government budgets and foreign-exchange reserves.

In mineral-rich developing states, mining contributes 10–30 % of total fiscal revenue (IFC 2020).

Employment and Consumption Multipliers

Each direct mining job supports 3–5 indirect jobs in logistics, construction, catering, and services.

In sub-Saharan Africa, roughly one in ten households depend directly or indirectly on mining income (World Bank 2019).

Infrastructure Spillovers

Mines provide roads, power, and water systems that become public assets.

The ICMM (2016) finds that 40–60 % of mine infrastructure investment later serves non-mining sectors.

Production and Supply-Chain Linkages

Demand for local goods and services stimulates industrial growth.

The “resource-based industrialisation” model estimates a 2–5× GDP multiplier from mining expenditure when domestic procurement exceeds 50 %.

Human-Capital Formation

Training and technical education create transferable skills.

Mining companies in emerging markets spend US $ 10–20 billion annually on training and social investment.

Why Large-Scale Mining Has Under-Delivered in Africa

Despite these mechanisms, Africa’s aggregate mining contribution remains modest: roughly 4–5 % of continental GDP, and less than 10% of total employment. The theoretical linkages above have been weakened by several structural barriers:

1. Enclave Operations: Most large-scale mines are foreign-owned, capital-intensive, and geographically isolated, creating few upstream or downstream linkages.

2. Revenue Volatility and Leakage: Commodity-price cycles, transfer pricing, and tax-structuring limit fiscal stability.

3. Long Development Timelines: LSM projects often take 10–20 years to progress from exploration to production—too slow to catalyse rapid development or absorb labour.

4. Weak Local Procurement: The lack of suppliers on the continent mean imported equipment, reagent inputs and services reduce domestic value capture.

5. Social Disconnection: The formal mining sector employs fewer than 1% of Africa’s workforce, leaving millions of informal miners excluded from legal and economic participation.

6. Lack of Skills: Modern large scale mining is heavily mechanised and extremely technical it requires a highly educated and trained workforce that often cannot be found in Africa and takes year to train and qualify, therefore labour often needs to be imported at great cost and skill transfers are slow.

The Missed Opportunity

In principle, the economic model is sound, mining can multiply national income, create jobs, and build infrastructure, but in practice, Africa’s reliance on large-scale, export-oriented mining has produced narrow benefits and deep structural dependency. The continent hosts abundant mineral wealth yet captures only a small fraction of its potential value, because the value in mining does not come from having minerals, it comes from being able to get those mineral out of the ground and into saleable form.

A recalibrated model that combines long term top down large scale mining (less focused on extracting short term mineral rents but rather treated as infrastructure that will provide benefits over the long term) matched with a bottom up approach to artisanal and small-scale mining formalisation, supported by centralised processing, toll milling, and legal market access—could finally activate the same mechanisms that large-scale mining was meant to deliver:

• Widespread employment,

• Local enterprise formation,

• Fiscal revenue, and

• Inclusive, decentralised economic growth.

In short, the evidence shows that mining can underpin development—but only when participation, infrastructure, and value retention are designed into the system. Africa’s next mining revolution will not come from more mega-projects, but from formalising and industrialising the millions already digging.

Artisanal and Small-Scale Mining in Contemporary Africa

Despite the political aspirations of post-independence Africa, the majority of Africans who participate directly in the mining economy do so through artisanal and small-scale mining (ASM). Although this practice has deep historical roots, it is widely considered illegal under most national mining frameworks, even as it remains pervasive and tacitly tolerated across mineral-rich regions of the continent.

Definition and Characteristics

Artisanal mining refers to the manual and small-scale extraction of minerals by individuals, families, or small groups using rudimentary tools and minimal capital investment. Typically operating within the informal sector, ASM provides essential livelihoods for millions, particularly in rural communities where formal employment opportunities are scarce.

While most artisanal operations rely on manual labour and simple tools, some incorporate light mechanisation—such as generators, sluice boxes, and water pumps. Unlike industrial mining, artisanal ventures lack formal employment structures, safety standards, and environmental regulation. Their organisation often derives from customary systems of community labour, and participation frequently includes family members working collectively and sharing proceeds.

Economic and Social Dimensions

ASM is primarily subsistence-driven, emerging from economic necessity rather than entrepreneurial ambition. It functions as a vital safety net for impoverished or marginalised populations, particularly where agricultural livelihoods are unstable or insufficient. In many regions, artisanal mining forms the economic backbone of rural areas, generating informal supply chains that feed into global mineral markets—often through complex networks of intermediaries.

However, the informality of ASM also facilitates extensive exploitation. Middlemen, smugglers, criminal networks, rebel groups and warlords, frequently dominate the trade, purchasing ore at artificially low prices and capturing most of the profit margins. Miners, lacking bargaining power or market access, typically remain at subsistence levels. This shadow economy deprives African governments of substantial fiscal revenue and not only undermines broader economic governance but also security.

Environmental and Health Impacts

The environmental impacts of artisanal mining are profound. Unsustainable extraction methods contribute to deforestation, soil erosion, water pollution, and siltation of rivers, leading to significant biodiversity loss and reduced agricultural productivity. The widespread use of hazardous chemicals, most notably mercury in gold processing, causes severe soil and water contamination, with long-term health consequences for miners and surrounding communities. Open pits, bush burning, and inadequate waste disposal further exacerbate ecological degradation and endanger local populations and livestock.

Regulatory Challenges and the Black Economy

Most African states lack coherent frameworks to regulate artisanal mining effectively. Where legislation does exist, enforcement is often weak or inconsistent. The result is a de facto criminalisation of artisanal miners without the capacity to provide them viable legal alternatives. In practice, ASM has been pushed underground, operating as part of the black economy beyond state oversight.

This regulatory vacuum produces multiple negative outcomes. Governments lose potential tax and royalty revenues; the industry fails to participate in the national economy; licensed industrial miners view artisanal miners as encroachers, creating tension and conflict; criminals and rebels use middlemen revenues to arm and entrench themselves; and environmental degradation proceeds unchecked. Most critically, the illegality of ASM traps millions of miners in cycles of poverty and exploitation. Working in hazardous conditions for minimal pay, they are excluded from social protections, financial services, and fair market access. Without legal recognition or investment in capacity building, these miners remain locked in a poverty trap, unable to transition from subsistence livelihoods to sustainable economic participation.

Despite these conditions, enforcement efforts typically prioritise protecting legal licence holders rather than addressing the socioeconomic realities that drive artisanal mining. Given its historical endurance and deep integration into rural livelihoods, ASM persists as a parallel mining economy, illegal on paper, indispensable in practice.

The Illegality of Artisanal Mining: Causes, Consequences, and Misconceptions

Artisanal and small-scale mining (ASM) is frequently categorised as illegal across much of Africa due to a combination of regulatory, environmental, and social factors. However, equating all artisanal mining with criminal activity is both analytically inaccurate and politically problematic.

Regulatory Foundations of Illegality

In most African jurisdictions, mineral extraction requires formal licensing and permits. For the majority of artisanal miners, the financial cost, bureaucratic complexity, and geographic inaccessibility of these processes make compliance unattainable. Consequently, their operations—though often traditional and community-based—are rendered de jure illegal under national mining laws.

Furthermore, artisanal mining commonly occurs in areas without government oversight, resulting in non-compliance with basic environmental, labour, and safety standards. In policy discourse, this lack of regulation is often conflated with criminal intent, leading authorities to treat all informal mining as illicit activity. The absence of clear legal distinction between informal and criminal operations contributes to widespread mischaracterisation of artisanal mining.

Criminalisation and Association with Illicit Economies

In some regions, genuinely illegal mining is conducted by groups engaged in smuggling, corruption, or armed conflict. These criminal networks exploit the regulatory vacuum and porous borders to traffic high-value minerals, financing insurgencies and organised crime. Such cases, while significant, have distorted the public image of ASM as a whole, reinforcing the assumption that informality equates to illegality.

Artisanal miners are also frequently accused of encroaching upon large-scale mining concessions or operating in protected areas, leading to legal disputes and security crackdowns. Governments and corporations often justify repressive interventions on grounds of protecting property rights, national revenue, and social order.

Arguments for Eradication

Critics of ASM typically invoke four principal arguments for its suppression:

1. Environmental Degradation: Unregulated artisanal mining can cause deforestation, mercury pollution, water contamination, and habitat destruction due to the absence of sustainable practices [citation needed].

2. Fiscal Losses: Informal mineral production bypasses official trade channels, depriving governments of tax and royalty revenues.

3. Health and Safety Risks: Artisanal miners often work in hazardous conditions, with high exposure to toxins, risk of injury, and prevalence of child labour and exploitation.

4. Security and Governance Concerns: Authorities sometimes frame ASM as a threat to national stability or investment climate, arguing that illegal operations fuel insecurity and corruption.

The Counterargument: The Limits of Criminalisation

While these concerns are valid, many scholars and development practitioners argue that criminalising artisanal mining is counterproductive. ASM sustains millions of livelihoods and provides vital income in rural areas where formal employment is scarce. Efforts to “stamp out” artisanal mining often displace vulnerable populations, exacerbate poverty, and strengthen illicit networks by driving the sector further underground.

Moreover, the illegality of artisanal mining entrenches a poverty trap. Miners working without legal recognition face exploitation by intermediaries, earn meagre and unstable incomes, and lack access to credit, safety equipment, or formal markets. Living in precarious conditions and excluded from state protection, they remain marginalised from broader economic development.

The persistence of the illegal mineral economy in Africa is driven by intersecting structural factors: chronic poverty, unemployment, weak regulatory institutions, high international commodity prices, and the presence of abandoned or poorly monitored mines. These conditions foster a continuum between informal survival mining and organised criminal exploitation.

The consequences are wide-ranging, revenue losses, environmental destruction, corruption, human rights violations, and the financing of armed groups, all of which undermine governance and stability. Africa’s illegal mining economy therefore extends beyond gold and diamonds to encompass a diverse portfolio of critical and strategic minerals, with implications for security, state legitimacy, and sustainable development across multiple regions.

The Scale and Economic Magnitude of Africa’s Illicit Mining Economy

Quantifying the true extent of illegal mineral extraction in Africa is challenging due to widespread informality, smuggling, and corruption, yet available evidence indicates that the economic scale is immense. Across the continent, artisanal and illegal mining represents one of the largest unrecorded sectors in the global economy.

In many gold-rich regions, entire landscapes have been transformed into open-air mining corridors stretching for miles, where tens of thousands of miners dig, pan, and sluice by hand. Satellite imagery and field research from the Sahel, Ghana, and eastern Democratic Republic of the Congo (DRC) reveal continuous belts of artisanal activity extending tens of kilometres, visible even from orbit. Each miner may extract only a few grams of gold per week, yet collectively these operations can yield hundreds of kilograms of ore per day, amounting to billions of dollars in unrecorded output annually.

In the DRC, similar artisanal corridors exist for cobalt and coltan, particularly in the Katanga and Kivu provinces. Here, informal miners—known locally as creuseurs—work under extreme conditions using basic tools and rudimentary methods. Estimates suggest that up to 20 percent of DRC’s cobalt exports originate from artisanal sources, much of which enters global supply chains through informal or illicit routes. In Ghana, Mali, Burkina Faso, and Sudan, the density of artisanal gold miners rivals or surpasses formal industrial employment in mining. These “megafields” of informal labour underscore the scale at which artisanal mining underpins rural economies.

Economic Estimates of Illegal Mining Output

While comprehensive data remain elusive, credible estimates highlight the enormous economic cost of Africa’s unregulated mineral economy:

Mineral / Region

Estimated Illegal Output or Revenue Loss

Source / Note

Gold, South Africa

≈ US $ 3.8 billion per year (≈ 1 % of GDP)

National intelligence and policy analyses on illegal gold mining.

Cobalt, DRC

≈ US $ 1 billion per year in lost state revenue

Based on field investigations and international observer reports.

Pan-Africa (gold, cobalt, others)

US $ 12–48 billion annually

Aggregate estimates from policy studies and economic reviews.

These figures are conservative. Because smuggling networks operate across porous borders and trade through informal intermediaries, the true value of illicit mineral exports is likely far higher. Recent commodity price increases particularly for gold, cobalt, tantalum, and antimony have further inflated the economic potential of unrecorded production.

It is relevant to mention that official production numbers come from smelters, final refined metal production. It is extremely difficult to connect the source of metal to the final product, and many within the industry doubt the mineral origin of metals. Anecdotal mining industry knowledge and trace element analysis by traders suggest that there is a very high chance that the highest end of the estimates for artisanal production might be conservative.

Broader Mineral Scope and Emerging Trends

Illegal extraction now encompasses a wide range of minerals across the continent:

• Gold: Rampant in South Africa, Ghana, Mali, Sudan, and Burkina Faso, with billions in lost state revenue each year.

• Diamonds: “Conflict diamonds” from the DRC, Côte d’Ivoire, and Liberia continue to bypass Kimberley Process oversight.

• Cobalt: With the DRC holding over 60 percent of global reserves, illegal extraction has surged alongside demand for electric-vehicle batteries.

• Coltan (tantalum and niobium): Concentrated in eastern DRC, much of it artisanal and often linked to smuggling and armed conflict.

• Copper: Unregulated artisanal mining in the DRC and Zambia contributes to both environmental degradation and lost revenue.

• Tin, Tungsten, and Tantalum (3T minerals): Mined illegally in the Great Lakes region (DRC, Rwanda, Burundi, Uganda), sustaining illicit financing networks.

• Chrome: South Africa and Zimbabwe face expanding illegal chrome extraction and smuggling.

• Gemstones: In Mozambique and Madagascar, illegal ruby and sapphire mining rivals formal exports.

• Antimony (Emerging): Recently, surging global prices—antimony exceeded US $ 40,000 per tonne in early 2025—have made it a new target for unregulated mining. Prospective antimony deposits in Morocco, South Africa, Zimbabwe, and central Africa could become future sites of illicit extraction as global supply tightens.

Economic Implications

Collectively, these activities represent tens of billions of dollars in lost annual export value and the forfeiture of significant fiscal revenues. Smuggling, corruption, and under-regulation allow vast quantities of cobalt, gold, and other minerals to enter global supply chains without state oversight. When accounting for mining’s known economic multipliers—including induced employment, service industries, and infrastructure linkage, the opportunity cost becomes even greater.

Conservative modelling suggests that Africa may be forfeiting around US $ 150 billion in GDP annually, equivalent to roughly 3 percent of total continental GDP. Formalising even a portion of this activity could increase mining’s contribution to African GDP, transforming an informal, exploitative survival economy into a legitimate engine of inclusive growth.

The Central Argument: Rethinking Africa’s Mining Strategy

A fundamental flaw underpins the current approach of many African governments to mining: national policies are overwhelmingly oriented toward attracting foreign direct investment (FDI) in large-scale, capital-intensive mining projects, while extracting the maximum possible fiscal value through taxation and royalties. This model reflects the conventional development logic of resource-led industrialisation, yet in practice, it has delivered limited results, and often resulted in “Dutch Disease” in resource wealthy nations.

Dutch disease is an economic phenomenon where a boom in one sector—typically natural resources such as oil or gas—ends up damaging the rest of the economy. It was first coined by The Economist in 1977 to describe what happened to the Netherlands after the discovery of large natural gas deposits in 1959. The basic mechanism is that a surge in resource revenues (and often capital inflows) pushes up the real exchange rate, making other tradable sectors like manufacturing and agriculture less competitive, while resources and labour shift toward the booming sector and non‑tradable services. Over time, this can leave a country with an overvalued currency, a hollowed‑out industrial base, and high vulnerability to commodity price swings—“good news” in resources translating into weaker long‑term growth and resilience.

Despite multiple global commodity supercycles and seventy-five years of postcolonial resource exploitation, Africa’s share of global mining output has remained below 8 percent. Large-scale commercial mining projects have often been slow to develop, constrained by high capital requirements, political risk, and infrastructure deficits. As a result, the sector’s contribution to the continent’s total GDP has remained modest relative to its geological potential.

By contrast, artisanal and small-scale mining (ASM), the oldest and most widespread form of mineral extraction on the continent, remains largely informal, at subsistence levels, underregulated, and criminalised.

Artisanal and small‑scale mining (ASM) in Africa has expanded by an order of magnitude over the past quarter‑century, both in employment and in its share of key mineral outputs. The World Bank now estimates at least 45 million people work directly in ASM worldwide, with Africa hosting a large share of that growth, and around 315 million people depend directly or indirectly on ASM‑related livelihoods. Since the 1990s, ASM’s contribution to global gold production has risen from roughly 4 percent to about 20 percent, and ASM now provides around a quarter of global tantalum and tin supply—much of this expansion concentrated in African producer countries. Recent work on Africa’s copper–cobalt ASM indicates that, for some deposits, informal artisanal production has become a significant fraction of total output over the last 25 years, particularly in the DRC and wider Copperbelt. In short, compared to the mid‑1990s baseline, ASM activity and its economic footprint across Africa have more than quadrupled, moving from a marginal, crisis‑driven survival strategy to a central, if still mostly informal, pillar of rural mineral economies.

This paper argues that the failure to appropriately formalise and integrate ASM represents a major structural impediment to Africa’s economic development. Far from being a peripheral or illegal activity, artisanal mining constitutes a significant untapped source of growth, employment, and domestic value creation.

The persistence of informality in the artisanal mining sector not only excludes millions of Africans from equitable participation in their mineral endowment—a historical birthright—but also impedes the organic development of a diversified African mining industry with local linkages, downstream processing, and local supplier networks, that although basic represent real development and multiplier effects. In its current form, ASM remains trapped within a cycle of subsistence and illegality that benefits intermediaries and criminal networks rather than national economies.

Estimates suggest that in 2024 between US$12–48 billion worth of minerals are lost annually through illegal extraction and smuggling networks operating across the continent. With current commodity prices, this figure is likely to be significantly higher. Given the well-established economic multipliers of mining, which generate employment and stimulate local supply chains in transport, services, and manufacturing, the forgone economic impact is substantial.

Conservatively, this paper estimates that even the most basic similar multiplier that are evident in subsistence farming, which is legal, that failure to formalise ASM may be depriving the continent of approximately US$150 billion in GDP annually equivalent to around 3 percent of Africa’s total GDP. In comparative terms, if effectively managed and integrated into the formal economy, artisanal mining could represent one of the most accessible and cost-effective opportunities for inclusive, resource-based development in Africa.

Unlike large-scale industrial mining which typically requires multibillion-dollar investments and 10–15-year development timelines post discovery ASM formalisation would demand relatively modest financial inputs but could yield rapid and broad-based socio-economic dividends. Properly designed, such reforms would not only enhance revenue collection and environmental governance but also empower millions of Africans to move from informal survivalism to legitimate, productive participation in their national economies.

California’s Gold Rush — A Historical Blueprint for Economic Transformation

Historical Context:
The California Gold Rush began in 1848 with the discovery of gold at Sutter’s Mill. Within two years, more than 300,000 people, farmers, craftsmen, and prospectors from across the globe, had migrated to the region. Initially informal and artisanal, the rush represented the largest voluntary migration of the nineteenth century and ignited a rapid process of economic and social transformation.

Evolution of the Economy:

• Artisanal Beginnings: Early miners relied on pans and sluice boxes, working individually or in small groups—mirroring modern artisanal mining in Africa.

• Transition to Capital Investment: As surface deposits were exhausted, miners pooled resources, mechanised operations, and attracted outside investors. Hydraulic mining, dredging, and underground extraction soon followed.

• Infrastructure and Commerce: The massive influx of people and capital accelerated urbanisation. San Francisco’s population surged from 800 in 1848 to over 25,000 by 1850, making it the principal port for the Pacific trade.

• Institutional Development: Gold revenues financed transport networks, railroads, and schools, integrating California into the U.S. economy and enabling industrial growth far beyond mining.

Quantifying the Legacy:
The total gold output from the California Gold Rush and subsequent mining history in the state is estimated at 118 million troy ounces. Using an average 2024 gold price of US $ 2,388 per ounce, this equates to a contemporary value of approximately US $ 282 billion, demonstrating the extraordinary wealth that fuelled long-term development.

Gold Output

2024 Price per Ounce

2024 Equivalent Value

118 million oz

US $ 2,388 / oz

≈ US $ 281.8 billion

How the Mechanism of Development Worked

California’s transformation followed a recognisable economic development sequence that illustrates how mineral extraction can trigger structural change:

1. Capital Formation:
   The inflow of gold created immediate liquidity, enabling investment in land, trade, and manufacturing. Local merchants and bankers reinvested profits into railroads, shipping, and agriculture turning mineral wealth into productive capital.

2. Infrastructure Multipliers:
   Roads, ports, and rail lines built to serve mining also connected new agricultural zones and markets. The first transcontinental railroad (completed 1869) emerged from demand for efficient mineral transport but became the foundation for continental trade integration.

3. Urbanisation and Service Economies:
   Mining settlements evolved into permanent towns offering legal, financial, and logistical services. These in turn attracted secondary industries, banking, insurance, hospitality, and retail, creating a self-reinforcing cycle of urban economic growth.

4. Human Capital and Innovation:
   The migration of technically skilled workers, engineers, blacksmiths, surveyors, established a knowledge base that later underpinned California’s manufacturing, agricultural, and eventually technological sectors. Stanford University and other institutions later grew from the fortunes of early mining families.

5. Institutional Development:
   The wealth generated by mining catalysed state formation: taxation systems, property rights, and financial institutions were developed to manage the resource boom. These institutions outlived mining itself, enabling sustained economic diversification.

6. Diversification and Industrialisation:
   By the 1860s, gold had seeded an economy encompassing agriculture, logistics, and finance. Over the next century, these foundations evolved into California’s dominance in agriculture, manufacturing, and high technology, ultimately giving rise to Silicon Valley.

Economic Legacy and Contemporary Parallel

California’s Gold Rush demonstrates how an artisanal resource boom, when accompanied by market access, infrastructure investment, and institutional development, can evolve into a diversified and self-sustaining economic system. Lest you think this was an accident the later gold rushes of Australia, and South Africa were identical.

Interpretation for Africa:
California’s experience provides a concrete illustration of the developmental chain reaction that Africa’s artisanal mining sector could unleash. If supported with centralised processing, legal markets, and reinvestment frameworks, artisanal mining could similarly stimulate:

• capital accumulation through rural incomes;

• infrastructure development through public–private investment;

• human capital through training and technology transfer; and

• long-term diversification into manufacturing and services.

The historical lesson is clear: when artisanal extraction is connected to formal markets and reinvested locally, it becomes the nucleus of structural transformation—not a symptom of underdevelopment, but its remedy.

China, from subsistence mining to mineral superpower

China’s rise as a mineral superpower was not sudden but the result of a deliberate, multi-decade state project that treated mining and materials as the foundation of national power. Rooted in the CCP’s interpretation of the “century of humiliation,” Chinese leaders concluded that true sovereignty required control over industrial inputs—coal, steel, metals, and later critical minerals—not just markets or finance. From 1949 onward, every leadership phase has explicity advanced this objective.

Under Mao, China built the “industrial skeleton” through state-led investment in basic mining, smelting, and heavy industry. Despite inefficiencies and severe social costs, this period created the physical base, mines, processing capacity, and trained technical workforce, necessary for future expansion. Deng Xiaoping’s reforms did not abandon this foundation but scaled it using state financed industry consolidation, market mechanisms and global integration. Rapid, often chaotic growth in mining, especially coal, functioned as a form of national apprenticeship, embedding extraction skills, local supply chains, and institutional knowledge across the economy.

As late as the 1990s and early 2000s, China’s mining sector was still in its rough apprenticeship phase, with thousands of fatalities each year and rights groups estimating that the true annual death toll in coal mines may have approached 20,000 once concealed accidents were counted, reflecting extremely unsafe conditions and minimal enforcement. In many pits, methods and labour intensity looked closer to Britain’s or America’s underground coal and tin mining at the turn of the twentieth century than to contemporary best practice: high manual effort, rudimentary equipment, weak ventilation and support, and little effective health and safety oversight. It was through this harsh “learning by doing” period—starting with countless small township‑and‑village mines and cooperatives—that China gradually accumulated the tacit skills, supplier networks, and institutional experience needed to mechanise, consolidate, and modernise extraction. Over time, those rough operations were disciplined or shut, capacity and expertise were concentrated in larger regional and then national companies, and mining practices shifted toward mechanisation, standardised safety regimes, and more capital‑intensive methods—but the industrial know‑how that underpins today’s mining power was built slowly and at a very high human cost.

This “learning by doing” phase was essential: China did not skip development stages but compressed them. Inefficient and environmentally damaging production was tolerated in exchange for capability-building, which was slowly in stages consolidated into larger, more efficient national champions and pushed firms up the value chain into refining, materials science, and manufacturing.

Under Xi Jinping, the final stage of the strategy has shifted toward full value-chain control, advanced modern mining practices, and global integration. Policies now focus on securing dominance in midstream processing, where most value is captured, and extending resource access abroad through the Belt and Road Initiative. The result is a deeply integrated system in which China controls not only domestic production but also the transformation of global raw materials into high-value industrial inputs.

Rare earths exemplify this model: China moved from largely artisanal mining clusters, to consolidation over a 30 years span, to near-total dominance of processing and downstream applications, turning a niche resource into a geopolitical chokepoint. This pattern has been replicated across battery materials and other critical minerals.

The key lesson is that mineral dominance cannot be built overnight or outsourced. It emerges from decades of coordinated policy, protection of infant industries, and cumulative capability-building across the entire value chain. China’s experience shows that mining is not extraction, it is an economic and institutional ecosystem that generates linkages, skills, and industrial multipliers over time.

Formalising Artisanal and Small-Scale Mining in Africa: A Framework for Inclusive Development

1. Rationale for Formalisation

Artisanal and small-scale mining (ASM) remains the largest direct employer in Africa’s mineral economy, engaging an estimated 20–30 million workers and supporting over 100 million people. Yet, despite its economic significance, the sector remains marginalised, informal, and often criminalised.

Formalisation—defined as the process of integrating ASM into legal, economic, and institutional frameworks—offers a pathway to transform this survivalist activity into a legitimate driver of inclusive growth. Rather than treating artisanal miners as illegal actors, formalisation aims to recognise their economic contribution, regulate their operations, and align their output with national and global development objectives.

The challenge is not the absence of knowledge or capacity, but the absence of coordination and political will. Africa already possesses successful examples of artisanal formalisation—from women’s mining collectives and microfinance schemes to digital licensing initiatives and Western-backed processing partnerships. Together, these efforts form the building blocks of a best-practice framework that could be deployed on a plug-and-play basis across African economies, if institutional support and investment were mobilised.

2. Policy Objectives of ASM Formalisation

A modern Artisanal and Small-Scale Mining (ASM) formalisation framework must go beyond legal recognition. It must create the institutional and physical infrastructure that enables miners to participate meaningfully in the formal economy. Formalisation is not achieved merely by issuing licenses—it requires building the mechanisms through which artisanal miners can mine, sell, and profit from their production under fair, regulated conditions.

Accordingly, a comprehensive formalisation strategy should pursue five interdependent objectives:

1. Legal Inclusion:
   Simplify and decentralise licensing procedures so that legality is attainable for small producers. Digital and mobile-based licensing systems should allow miners to register, renew, and pay fees at low cost and without bureaucratic barriers.

2. Economic Empowerment:
   Provide miners with access to finance, equipment, markets, and technology. Integrate microfinance mechanisms—potentially backed by verified mining claims or production receipts—to enable miners to invest in safer and more efficient operations, and to move from subsistence to small enterprise.

3. Environmental and Social Regulation:
   Establish proportional, scale-appropriate standards for health, safety, and environmental protection, supported by technical training and incentives for compliance rather than punitive enforcement.

4. Governance and Revenue Integration:
   Build transparent, traceable value chains that connect artisanal miners to legal buyers and formal tax systems. Integrate digital traceability platforms, mobile payments, and simplified royalty regimes to improve oversight and state revenue collection.

5. Market and Infrastructure Integration (New Objective):
   Recognise that none of the above objectives can be sustained without creating a network of accessible processing and trading mechanisms.

   • Centralised Buying and Toll Milling: Governments, DFIs, and private partners must establish regional ore concentrators, toll mills, and licensed buying centres that serve as legal, transparent points of sale for artisanal production.

   • Basic Beneficiation Refining and Value Addition: Introducing small-scale refining capacity—such as dore smelting, concentrate production, or rough refining, cost benefit tested—enables not just value addition but a new mid level supply chain industry and creates verifiable production data.

   • Financing and Public–Private Partnerships: These facilities should be financed through blended public–private models, reducing the fiscal burden on governments while ensuring community participation and technology transfer.

   • Economic Inclusion Mechanism: Such infrastructure provides the missing link between informal extraction and formal economic participation, ensuring that artisanal miners can sell into regulated supply chains, access fair pricing, and generate taxable income.

Without this market and infrastructure pillar, the other elements of formalisation—licensing, regulation, and traceability—remain largely theoretical. Centralised processing and buying networks create the economic foundation upon which legal and environmental reforms can function, transforming ASM from an informal livelihood into a structured contributor to national development.

3. Core Elements of a Comprehensive Formalisation Framework

3.1 Legal and Institutional Reform

• Simplified and Digital Licensing: Mobile-based platforms should allow miners to apply, register, and pay for licenses via smartphone apps. These systems can cut bureaucratic costs, reduce corruption, and create a digital audit trail for governments.

• Decentralised Administration: Licensing and monitoring should be devolved to district or provincial authorities, integrated with national databases.

• Secure Tenure through ASM Zones: Governments should designate ASM zones or mineral corridors to prevent conflict with industrial concessions and encourage long-term investment in safety and rehabilitation.

3.2 Economic Integration and Access to Finance

• Cooperatives and Digital Marketplaces: Formally registered cooperatives give miners bargaining power and improve access to equipment, training, and marketing.

• Microfinance Backed by Mining Claims: Small miners should be able to access loans backed by legal ASM licenses or verified production receipts, facilitated through mobile-money ecosystems.

• Credit Guarantees and Leasing Models: DFIs and governments can establish guarantee funds or leasing schemes for mechanisation, reducing risk and dependency on informal financiers.

• Fair-Trade and Traceability Mechanisms: Adoption of digital traceability systems and ethical sourcing certification can link African ASM products directly to global markets.

3.3 Environmental and Health Safeguards

• Graduated Environmental Standards: Regulations must be attainable, with clear roadmaps for progressive compliance.

• Cleaner Technologies: Governments and donors should promote mercury-free processing and safer waste management.

• Digital Monitoring Tools: Apps for environmental reporting and remote sensing technologies can assist both compliance and enforcement.

3.4 Governance, Transparency, and Revenue Capture at the point of

• Traceable Supply Chains: Digital tagging or blockchain systems should record mineral origin, transport, and sale.

• Simplified Royalty Regimes: Taxation can be collected at point of sale through mobile payment systems to improve transparency.

• Community Development Funds: A share of ASM-derived royalties should be reinvested in local infrastructure, education, and environment.

• National ASM Databases: Governments should maintain integrated registries of miners, cooperatives, production, and revenue to support evidence-based policymaking.

African Women’s Mining Collectives — Natural Economic Development in Action

African women’s mining collectives demonstrate that inclusive economic transformation can emerge organically from the bottom up. Operating in some of the continent’s poorest and most marginalised communities, these groups have evolved from informal survival networks into functioning micro-economies. They are living laboratories of how mining, when localised and cooperative, naturally creates employment, capital formation, and social progress.

Participation and Evolution

• Women constitute between 40–50 % of Africa’s artisanal and small-scale mining (ASM) workforce—particularly in Ghana, Guinea, Tanzania, and the Democratic Republic of Congo (DRC).

• Historically confined to washing, panning, and ore transport, women have expanded into ownership, prospecting, and cooperative management, forming collectives that pool labour, capital, and risk.

• Many groups now operate as semi-formal enterprises—buying small processing equipment, securing local permits, and developing trading networks that link villages to regional markets.

This is economic development in its most elemental form: community-driven enterprise, capital accumulation through savings, and reinvestment in productive activity without external subsidy.

Micro-Level Economic Empowerment

Women’s collectives have achieved tangible economic outcomes that mirror the mechanisms of national development, albeit at village scale:

Mechanism

Micro-Economic Impact

Income Multiplication

Members of collectives in Tanzania and DRC report earning 30–60 % higher incomes than unaffiliated miners, due to better pricing and reduced exploitation.

Capital Formation

Through Village Savings and Loan Associations (VSLAs), women pool resources to purchase pumps, sluice boxes, or protective gear—converting savings into productive capital.

Local Investment

Profits are often reinvested into household education, farming inputs, and petty trade, stimulating rural demand and diversifying livelihoods.

Employment Creation

Each organised collective typically supports 5–10 ancillary jobs in transport, food supply, and mineral trading.

Financial Inclusion

Savings groups mobilised more than US $ 176 000 in collective capital across DRC and Burkina Faso (IMPACT, 2023), creating self-financed credit systems in cash-poor regions.

These outcomes demonstrate that, even at small scale, formalised cooperation in mining replicates the multiplier effects of national-level mining economies—proof that structured ASM can drive development where few alternatives exist.

Illustrative Examples

• REAFECOM (DRC): Formed in 2018, the Network for the Empowerment of Women in Mining Communities helps women miners negotiate fair prices, advocate for legal protection, and access finance and training.

• Kayonza Women’s Association (Uganda): Members jointly invest in washing plants and provide on-site childcare, increasing productivity and safety.

• Tanzania’s Women Miners Association (TAWOMA): Supports women to obtain mining licences and participate in gemstone trading; collective bargaining has lifted incomes and improved regulatory compliance.

• Mère Boss Movement (Eastern DRC): Women like Annie Sinanduku Mwange now own pits and employ men, reversing historical hierarchies and reshaping local power dynamics.

Social and Institutional Spillovers

These collectives extend far beyond economics. They have become community institutions, providing:

• Social protection and conflict mediation, especially against gender-based violence.

• Training in financial literacy and environmental safety, improving resilience and governance capacity.

• Role models for youth and other marginalised groups, demonstrating that resource ownership and entrepreneurship are attainable goals.

By building trust, savings, and shared purpose, they replicate at local level the institutional foundations—cooperation, transparency, accountability—that underpin modern economic systems.

Women’s mining collectives reveal what natural economic development looks like when policy enables, rather than replaces, local initiative.
They show that:

• Economic agency precedes industrial scale—small, cooperative enterprises can generate the same linkages (jobs, trade, reinvestment) that large projects often fail to deliver.

• Gender inclusion is not only equitable but economically efficient, unlocking the productive potential of half the rural labour force.

• Formalisation frameworks that integrate women’s cooperatives—through access to microfinance, toll milling, and digital licensing—can transform these micro-economies into legitimate, tax-contributing engines of growth.

In short, Africa’s women miners have already built a working model of what equitable, community-led mining formalisation can achieve. Their collectives are proof of concept that sustainable development can grow not from billion-dollar projects, but from thousands of organised women with shovels, pans, and a shared vision for prosperity.

4. Industrial Infrastructure for ASM Formalisation: Toll Mills, Ore Concentrators, and Offtake Partnerships and Bank Led Microfinance

While artisanal mining is inherently low-capital, the processing stage—crushing, milling, and mineral concentration—represents a high-cost, high-technology bottleneck. Without access to appropriate processing facilities, small miners are forced into inefficient or unsafe practices and are vulnerable to exploitation by illegal middlemen.

4.1 The Technical and Capital-Intensive Nexus

Ore concentrators and toll mills form the industrial backbone of ASM formalisation. They require sophisticated metallurgical equipment, energy supply, water management, and skilled operators—resources generally beyond the reach of small cooperatives or national agencies.

This presents an opportunity for public–private partnerships (PPPs) and international collaboration. Western companies, engineering firms, and DFIs can finance and manage these facilities under transparent co-ownership or concession models. This approach relieves African governments of the financial burden of building and operating complex infrastructure while ensuring technology transfer and local capacity development.

Function

Developmental and Strategic Impact

Centralised Processing: Shared facilities serve multiple ASM cooperatives.

Improves ore recovery, quality, and consistency while generating verifiable production data.

Revenue Capture and Oversight: Licensed concentrators act as tax and royalty collection points.

Reduces fiscal leakage and improves government revenue.

Environmental Regulation: Controlled processing allows enforcement of waste and chemical standards.

Mitigates mercury and tailings pollution, ensuring safer, cleaner operations.

Technical Training and Employment: Facilities create skilled jobs and act as centres for learning.

Builds domestic expertise and supports industrial upgrading.

Knowledge Transfer and Innovation: Western partners embed best practices in local operations.

Strengthens national capacity and future independence.

4.2 Alleviating the Burden on Governments

By engaging private partners to build and operate concentrators and toll mills, governments can transition from operators to regulators—focusing on oversight, taxation, and social investment. DFIs and Western firms, in turn, gain secure and ethical access to critical minerals, while supporting African development objectives.

This shared-investment model converts foreign participation from extractive to collaborative, ensuring that infrastructure, expertise, and profits are distributed more equitably.

Offtake agreements—contracts in which buyers commit to purchasing a share of production—can anchor these partnerships and provide predictable revenue streams for miners, processors, and governments.

Structured transparently, offtake arrangements around toll mills and concentrators can:

• Guarantee demand and early cash flow, creating tangible short-term results;

• Support Western critical-mineral strategies by providing secure, ethical supply from diversified sources;

• Encourage formalisation by rewarding miners who operate legally and deliver traceable ore; and

• Build trust between African producers and Western buyers through mutually beneficial value exchange.

These agreements are particularly valuable because traditional large-scale mining investments can take 10–20 years to generate revenue, often leading to frustration and breakdowns in partnership. In contrast, toll milling and concentrator operations can deliver measurable returns within one to two years, offering early “proof-of-concept” successes that justify longer-term engagement.

Such early wins can build confidence among investors and policymakers, laying the groundwork for expanded industrial mining ventures and deeper geopolitical cooperation. They bridge the gap between artisanal formalisation and commercial mining, aligning the short-term interests of miners and governments with the long-term horizons of investors.

6. Implementation Model: Regional Processing and Offtake Hubs

A scalable, replicable model for ASM formalisation could consist of regional ore-processing and toll-milling hubs, a network of which already exists, developed through PPPs or DFI-backed investments. Each hub would include:

• Licensed concentrators and toll mills serving multiple mining cooperatives;

• Digital registration, licensing, and payment systems;

• Environmental and safety monitoring infrastructure;

• On-site training and laboratory facilities;

• Transparent offtake contracts with Western or regional buyers; and

• Integrated blockchain-based traceability to link production, payment, and export.

Such hubs would deliver rapid economic and fiscal benefits—stimulating rural employment, expanding government revenue, and strengthening Western supply-chain resilience—while creating enduring industrial linkages and trust.

7. Expected Economic and Developmental Outcomes

If implemented at scale, the formalisation framework could:

• Add up to US $150 billion annually to African GDP (≈ 3 % of total output);

• Increase mining’s GDP contribution by over 60 %;

• Provide millions of miners with legal status, credit access, and stable income;

• Improve environmental outcomes and health standards; and

• Anchor Africa’s participation in global critical-mineral supply chains

Microfinance in Africa — Financial Inclusion and a Pathway to Formalisation

Historical Context:
Modern microfinance traces back to Muhammad Yunus and the Grameen Bank (Bangladesh, 1976), whose success in lending small sums to the poor without collateral revolutionised development finance. By the 1990s, the model had spread to Africa through NGOs, donor programmes, and credit cooperatives. Over time, African governments and the private sector recognised microfinance as a strategic instrument for financial inclusion, entrepreneurship, and poverty alleviation—and began scaling it through formal banking channels.

By 2024, Africa’s microfinance ecosystem had evolved from isolated NGOs into a multi-tiered financial system comprising community banks, microfinance institutions (MFIs), and commercial banks offering microcredit products. This evolution reflects a structural shift: microfinance is no longer a peripheral charity but a mainstream financial industry connected to the formal economy.

How Microfinance Works and Scales in Africa

Microfinance institutions provide small-scale financial services—micro-loans, savings, insurance, and remittances—to individuals and microenterprises excluded from conventional banking. Increasingly, these services are delivered via mobile platforms and digital credit scoring, reducing transaction costs and expanding reach to rural areas.

Key Metric (2024)

Estimate

Active MFIs

Over 3,000 institutions

Total clients

≈ 20 million borrowers

Total portfolio disbursed

≈ US $ 8 billion

Average loan size

US $ 400–600

Female clients

≈ 70 %

Jobs created

≈ 5 million

Poverty reduction

15–20 % in several participating regions

Microfinance’s social impact is profound: improved access to capital has led to measurable gains in education, health, and food security, while increasing household resilience to economic shocks. In countries like Kenya, Ghana, and Tanzania, access to microfinance correlates with significant improvements in women’s income, entrepreneurship rates, and financial literacy.

Integration with the Formal Banking System

Over the last decade, major African and international banks have entered the microfinance space, blurring the line between informal and formal finance.

• Equity Bank (Kenya) and UBA (Nigeria) pioneered downscaled lending models, extending small loans through mobile banking.

• Standard Bank, Barclays (Absa Group), and Ecobank launched microcredit subsidiaries or partnerships with local MFIs, supported by digital platforms that minimise overheads.

• International development partners such as the IFC, AfDB, and European Investment Bank have provided funding lines and guarantees to de-risk lending to underserved communities.

• In Ghana, CAL Bank and GCB Bank run microfinance partnerships in mining regions, offering credit linked to cooperative productivity and export receipts.

This growing participation of large financial institutions underscores a crucial evolution: microfinance has become bankable. With the right data, collateral substitutes, and partnerships, even the smallest borrowers can enter formal capital markets.

How Microfinance Supports Economic Development

Microfinance functions as a financial multiplier, converting informal labour into formal enterprise.

1. Capital Access: Converts small savings into productive investment for equipment, education, or trade.

2. Employment Creation: Micro-loans fuel enterprise expansion, generating up to three indirect jobs per borrower.

3. Savings and Insurance: Build household resilience, smoothing income volatility.

4. Gender Equity: With 70 % of borrowers being women, microfinance directly empowers half the labour force.

5. Financial Integration: Connects unbanked citizens to national banking systems and credit histories.

Application to Artisanal and Small-Scale Mining (ASM)

Microfinance can transform artisanal mining from informal subsistence into structured enterprise by funding the inputs of formalisation—licensing fees, safer equipment, and environmental compliance.

Microfinance Function

Impact on ASM

Startup Capital

Purchase of safe tools and machinery.

Financial Inclusion

Escape from predatory lenders; integration into formal banking.

Empowerment

Strengthens cooperatives and women’s collectives.

Formalisation

Enables registration, royalty payment, and safety compliance.

Income Stability

Builds savings buffers and long-term planning.

Examples:

• In Burkina Faso and DRC, women’s collectives use Village Savings and Loan Associations (VSLAs) to pool funds for washing plants, shops, and farming inputs.

• In Tanzania, the Women Miners Association (TAWOMA) partners with microfinance providers to help members obtain gemstone mining licences and invest in small concentrators.

• Ghana’s MASLOC programme extends microcredit to artisanal miners, linking repayment to production verified at local buying centres.

From Microfinance to Industrial Banking: The Toll Mill as Community Bank

A powerful next step in integrating finance with formalisation lies in linking microfinance networks to toll mills and ore concentrators—the physical and financial hubs of artisanal production.

If toll milling/concentration operations were digitised and regulated, they could function as community financial intermediaries, effectively becoming the bank of the local mining ecosystem:

• Transaction Verification: Mills record every ore delivery, providing transparent production data that can serve as collateral or credit history for miners.

• Revenue Channel: Payments for processed ore can be made directly into mobile or bank-linked accounts, fostering financial inclusion.

• Credit Gateway: Toll mills could partner with MFIs or banks to extend micro-loans secured against future ore deliveries or cooperative production.

• Savings and Insurance Services: Miners could deposit a portion of earnings into on-site or mobile-linked savings schemes, creating resilience and liquidity.

• Tax and Royalty Collection: Governments could collect royalties digitally through mill-linked accounts, ensuring transparency and revenue retention.

In this model, the processing facility becomes both the economic and financial nucleus of the artisanal mining community. For banks, this structure provides verifiable transaction data and a fixed-point counterparty; for miners, it provides a safe, fair, and accessible financial system integrated with their work.

Combining microfinance with processing infrastructure could be the breakthrough mechanism Africa needs to unlock capital for millions of artisanal miners—turning isolated cash economies into traceable, investable, and taxable value chains.

Microfinance has evolved from a development experiment into a continent-wide financial engine, serving tens of millions and injecting over US $ 8 billion annually into local economies.

When connected to artisanal mining through toll mills, cooperatives, and digital payments, it can deliver:

• Financial inclusion at scale;

• Formalisation and regulatory compliance;

• Safer, more productive mining; and

• Local wealth retention.

In short, microfinance and toll milling together form the financial architecture of a modern, inclusive mining economy—one where prosperity, trust, and transparency are built not through external control, but through locally grounded financial participation.

Reframing Africa’s Mining Paradigm

The formalisation of artisanal mining represents more than regulatory reform and access to revenues previously being lost to illegal networks—it signals a paradigm shift in how Africa engages with global mining. By combining digital governance, microfinance, concentrator infrastructure, and transparent offtake agreements, African governments can transform ASM from a subsistence activity into a cornerstone of industrial development.

This approach relieves fiscal pressure, attracts ethical investment, builds domestic expertise, and restores public trust. It also provides Western partners with secure, traceable access to critical minerals—linking Africa’s development objectives to the world’s strategic material needs.

In essence, formalisation, supported by technology and partnership, offers a mutual solution to Africa’s underdevelopment and the West’s supply-chain insecurity. It can turn one of the world’s most informal sectors into one of its most dynamic engines of inclusive, sustainable, and globally integrated growth.

Conclusion: A New Model for African Mining Development

The future of African mining does not lie in replicating twentieth-century models of large-scale, export-oriented extraction. For seventy-five years, that approach—centred on attracting foreign capital and maximising fiscal take—has produced only partial and uneven development. Africa remains home to some of the world’s richest mineral endowments yet captures less than eight percent of global mining output and less than five percent of its total GDP from the sector. The structural failure of this model has more than one cause, but one of them its fundamental exclusion of the millions of Africans who mine, trade, and process minerals informally, and from its dependence on long-cycle, capital-intensive projects whose benefits accrue slowly and narrowly.

By contrast, the formalisation of artisanal and small-scale mining (ASM)—anchored in digitally enabled governance, microfinance integration, and shared processing infrastructure—offers a radically more inclusive and efficient path to development. Properly implemented, such systems would link millions of artisanal miners directly to legal markets, transparent fiscal channels, and ethical international supply chains.

A Digital, Inclusive, and Scalable System

The technological foundations already exist. Mobile licensing platforms, blockchain traceability, and digital payment systems can make registration, taxation, and compliance transparent and low-cost. Integrated with microfinance networks and toll-milling hubs, these systems would allow miners to convert production into verifiable income, build credit histories, and participate in the formal economy. Governments would gain reliable data on production and revenue, enabling them to collect royalties and taxes efficiently while closing channels for smuggling and corruption. In addition access to this source of minerals would become available the global market on competitive terms, unhindered by the first rights of large mining companies and offtake arrangements that were necessarily secured for decades by the mining companies who developed them.

Economic and Fiscal Impact

The potential scale of benefit is immense. If even a portion of the estimated US $ 12–48 billion in illicit mineral production were captured through formalisation, the fiscal dividends would exceed the total mining tax receipts of several African states combined. When accounting for known multiplier effects—employment, services, and local reinvestment—the economic impact could easily be multiples of that. This would increase the mining sector’s overall contribution to the continent’s economy, while creating millions of new, legal livelihoods.

A Framework for Partnership

For Europe and other external partners, this framework presents a new model of ethical, high-return investment. Supporting digitally backed ASM formalisation allows Western investors to secure transparent, traceable access to critical minerals essential for the energy transition, while generating tangible social impact and political goodwill.
Through public–private partnerships in toll milling, microfinance, and digital infrastructure, foreign capital can achieve commercial returns and developmental legitimacy simultaneously. Early investment in such systems offers short-term revenue flows—through offtake agreements and regional processing hubs—while laying the groundwork for deeper, long-term industrial partnerships.

Governance, Trust, and Mutual Benefit

Digitally enabled formalisation has the power to transform governance as well as economics. Automated licensing, mobile payments, and transparent offtake data would drastically reduce opportunities for corruption, rent-seeking, and tax evasion. By shifting the locus of control from opaque bureaucracies to verifiable digital systems, governments can regain public trust and demonstrate accountability to both citizens and investors.

This approach creates the conditions for a genuine partnership of equals between Africa and its development partners—one built not on aid or extraction, but on co-investment in shared prosperity.

The Mineral Imperative Reimagined

Africa stands at the threshold of a new mining era. The coming decades will see unprecedented demand for copper, cobalt, nickel, rare earths, and other critical minerals—metals that are both the foundation of the digital age and the lifeblood of the energy transition. Much of this supply will emerge from artisanal and small-scale operations. Left informal, these activities will continue to fuel environmental degradation, criminal networks, and lost revenues. Formalised through digital governance, transparent finance, and equitable partnerships, they can instead become the engines of inclusive, self-sustaining growth and organic economic development.

The lesson from history—from the indigenous metallurgists of Katanga to the gold diggers of California—is clear: when individuals are empowered to mine legally, trade fairly, and reinvest locally, mining becomes a force for civilisation, not exploitation.

Europe and Africa now have a shared opportunity to turn that lesson into policy—to build a digitally connected, ethically governed, and economically inclusive mining ecosystem that delivers prosperity, stability, and mutual gain. This is not only a strategy for the continent’s development but a blueprint for a new era of equitable global resource partnership—a system where the formalisation of artisanal mining becomes the foundation of both African self-determination and a more sustainable global economy.

Policy Recommendations

To translate this framework into practice, a coordinated agenda between African governments, development partners, and ethical investors should pursue the following priorities:

1. Digital Formalisation Systems:
   Develop and deploy digitally backed licensing and traceability platforms for artisanal and small-scale mining (ASM), enabling real-time monitoring of production, automated royalty collection, and transparent fiscal reporting. Governments should pilot these systems in high-intensity mining regions, supported by technical assistance from the African Development Bank (AfDB), World Bank, and EU development funds.

2. Public–Private Partnership Toll Milling and Concentration Hubs:
   Establish jointly financed, regulated processing facilities that serve as centralised buying, milling, and record-keeping centres for ASM production. These hubs should integrate digital payment systems to ensure fair compensation, support environmental compliance, and provide verifiable data for taxation and exports.

3. Integration of Microfinance and Cooperative Banking:
   Encourage partnerships between microfinance institutions, commercial banks, and mining cooperatives to provide miners with small loans for equipment, safety improvements, and licensing. Linking credit access to verified ore deliveries at toll mills will reduce financial risk and enhance repayment rates.

4. Regulatory and Fiscal Alignment:
   Harmonise mining and financial regulations to allow MFIs and digital platforms to operate legally within mining value chains. Governments should ensure that fiscal policies incentivise formalisation rather than penalising informal miners, for instance through graduated tax regimes and royalty rebates for compliant cooperatives.

5. Investment and Offtake Partnerships:
   Promote International investment in formalisation systems, toll mills, and traceable supply chains. Structured offtake agreements tied to ASM cooperatives can secure critical mineral supplies for Western industries while ensuring local beneficiation and shared revenue providing necessary stable revenues.

6. Capacity Building and Knowledge Transfer:
   Partner with universities, technical institutes, and private firms to deliver training in digital tools, financial literacy, and sustainable mining practices. This will build the institutional and human capital needed to sustain the system long-term.

If implemented together, these measures would create a transparent, self-financing, and inclusive mining ecosystem across Africa—one that simultaneously increases government revenue, reduces corruption, empowers local communities, and strengthens global supply-chain security.

By supporting digital formalisation, Europe and Africa can co-create a model of ethical, high-return, development-aligned investment that transforms artisanal mining from a governance challenge into one of the continent’s greatest economic opportunities.

Further reading:

Core ASM and formalisation frameworks

• World Bank – Achieving Sustainable and Inclusive Artisanal and Small-Scale Mining (ASM): A Renewed Framework for World Bank Engagement (2024). Sets out a global ASM formalisation and professionalisation agenda; reinforces your argument on ASM as a development lever and the need for digital, legal, and infrastructure reforms.

• World Bank – A New Era of Renewal in Artisanal Mining (2025, opinion piece). Summarises global ASM employment (≈45 million directly, >200 million dependent) and highlights ASM’s growing role in critical mineral supply chains.

• State of the Artisanal and Small-Scale Mining Sector (Delve / World Bank reports, 2019–2023). Provides data on ASM production shares (gold, tantalum, tin, cobalt), gender participation, and governance gaps.

• World Bank – Formalisation of Artisanal and Small-Scale Mining in Ghana (country case study). Offers concrete regulatory and institutional approaches to licensing, ASM zones, and integration with LSM.

Economic multipliers, linkages, and enclave effects

• ICMM – The Role of Mining in National Economies (multiple editions). Documents mining’s fiscal contribution, infrastructure spillovers, and multiplier effects when linkages are properly developed.

• IFC / World Bank extractives reports – various. Provide data on mining’s share of fiscal revenues, employment multipliers (3–5 indirect jobs per direct job), and procurement linkages.

• NBER – Estimating the Footprint of Artisanal Mining in Africa (2025). Uses satellite and geospatial methods to quantify ASM footprints and their overlap with rural poverty and limited infrastructure.

• Hilson, G. – multiple papers on ASM in sub‑Saharan Africa. Classic references on “poverty‑driven ASM,” enclave LSM, and the political economy of informality.

Critical minerals, ASM, and energy-transition linkages

• Boafo & Arthur-Holmes – ASM and Critical Minerals (2025). Explores the “sustainability transition paradox” where ASM supplies key critical minerals but remains marginalised.

• World Bank – Developing Forest-Smart Artisanal and Small-Scale Mining (ASM) (2016). Addresses environmental and land‑use dimensions of ASM, relevant to graduated standards and cleaner‑tech proposals.

• Recent production/supply dynamics papers on ASM copper–cobalt in the DRC Copperbelt (2017–2023). Show the rising share of ASM in cobalt and copper, reinforcing that informal African mining is already structurally significant. (Sciencedirect)

Illicit flows, lost value, and governance

• Delve / World Bank – COVID‑19 emergency response and ASM vulnerability reports. Provide qualitative and quantitative evidence on ASM informality, exposure to shocks, and the role of smuggling and illicit financial flows.

• UN and OECD reports on illicit mineral trade and IFFs from Africa. While not always providing a single continental number, they support that tens of billions are lost annually through smuggling and under‑reporting.

• Africa‑focused analytical pieces (e.g., African Feature Network, policy blogs) on stakeholder prosperity bonds and localised financing mechanisms for mining communities.

Historical and political‑economy perspectives

• Global Report on Artisanal and Small-Scale Mining (IIED). Offers a long‑run view of ASM’s evolution and policy responses over several decades.

• Thabo Mbeki – speeches and writings on land and resource rights (e.g., “The Historical Injustice”).

Abstract

Africa enters the emerging mining supercycle with one of the world’s richest geological endowments, yet geology alone will not determine who benefits. The continent has less than 8 percent of global mineral production despite over 25% of global reserves, the largest endowment of any continent, yet mining still contributes less than 5 percent of continental GDP, underscoring a long-standing failure to convert resource wealth into broad-based industrial development. This paper argues that Africa’s problem is not mineral scarcity but an institutional and economic model that has treated mining primarily as a source of rents, export earnings, and negotiation leverage rather than as the foundation of a wider mineral economy.

Large-scale mining in Africa is unusually difficult and expensive to build. Projects typically take 15–20 years to reach production, require hundreds of millions or billions of dollars up front, and in many African jurisdictions face capital costs that are commonly 25–50 percent higher than comparable projects elsewhere because miners must often finance their own roads, rail, power, water, and logistics systems. Operating costs are also elevated by imported equipment, energy constraints, expensive finance, sovereign risk, and policy instability, which means that only a small subset of exceptionally large, high-grade, world-class deposits can consistently attract development capital. In effect, Africa has built a system in which the top decile of projects gets financed while a far larger pool of potentially productive deposits remains stranded by infrastructure deficits and high risk-adjusted hurdle rates.

The paper contends that this outcome is not inevitable. If governments stopped treating mining policy primarily as a tool for maximising near-term mineral rents through high fiscal takes, changing codes, mandatory local ownership, and uneconomic processing mandates, and instead treated large-scale mining as strategic infrastructure, the economics of the sector would change materially. Public and public-private investment in power, roads, railways, ports, water systems, geological surveys, and mining service ecosystems would lower the cost base not just for one mine, but for entire districts and corridors, allowing more projects to become financeable and creating denser upstream and downstream linkages across the economy.

Under this approach, large-scale mines would be seen less as isolated tax generators and more as anchor assets around which broader mining regions can form. The real prize would not be maximising royalties from a handful of world-class mines, but enabling dozens of additional mines, suppliers, processors, engineering firms, logistics companies, and worker settlements to emerge around shared infrastructure. Over time, this would likely generate larger aggregate fiscal revenues, greater GDP growth, stronger domestic procurement, and physical infrastructure with long-lived spillovers into agriculture, trade, manufacturing, and urbanisation.

The central claim of the paper is therefore that Africa will not capture the next supercycle simply because the world needs its minerals. It will do so only if it reduces the structural cost of mining, broadens the investable universe beyond the top tier of deposits, and treats mining as a long-term strategic industry whose greatest value lies in the infrastructure, capabilities, and industrial ecosystems it can create.

The next mining supercycle has already begun

A mining supercycle is a prolonged period—typically 10 to 30 years—during which demand for minerals and metals grows persistently faster than supply, leading to sustained high prices, increased investment, and structural changes across the mining industry.

Unlike a normal commodity cycle, which may last a few years and is driven by short-term economic conditions, a supercycle is driven by fundamental changes in the global economy.

A supercycle usually occurs when one or more major structural shifts dramatically increase demand for raw materials. Examples include:

• Industrialisation of large economies.

• Rapid urbanisation.

• Major infrastructure booms.

• Technological revolutions.

• Large-scale military build-ups.

• Energy transitions.

This century’s supercycles broadly occurred during 1945-1973 and were based on post-war reconstruction & Japanese industrialisation, and during the final leg of China’s industrialisation & urbanisation between 2000-2013 and involved heavy increases in the average consumption in iron ore and steel, copper, aluminium and coal. This mining supercycle is expected to potentially be the largest mining supercycle in history, because every single of one the factors that causes a supercyles are happening at once.

The Material Footprint of Economic Growth

To understand why a new mining supercycle may be emerging, we first need to understand the concept of material footprint.

Material footprint measures the total quantity of raw materials required to satisfy an economy’s final demand. It includes not only the materials consumed directly within a country, but also those extracted elsewhere to manufacture imported goods and services. Unlike simple measures of domestic extraction, it captures the full resource intensity of modern economies.

Over the past five decades, the world’s material footprint has expanded at an extraordinary pace. According to the United Nations International Resource Panel, global material use increased from approximately 30 billion tonnes in 1970 to more than 100 billion tonnes per year by 2020, more than tripling over the period. While the global population roughly doubled during the same timeframe, material consumption grew substantially faster, reflecting rising incomes, industrialisation and increasingly material-intensive lifestyles.

This distinction is important. Material demand is driven far more by economic growth than by population growth. As countries become wealthier, they consume disproportionately larger quantities of steel, cement, copper, aluminium, fertilisers, plastics and energy. They build cities, transport networks, power systems, factories, hospitals, data centres and increasingly digital infrastructure. Every stage of economic development requires greater quantities of raw materials.

Historically, global GDP and material footprint have moved closely together. Despite decades of discussion around resource efficiency and “decoupling”, there is little evidence that economic growth has been achieved without a corresponding increase in absolute material demand at the global level. While individual economies have become more efficient, these gains have largely been offset by rising consumption and industrialisation elsewhere.

Today, a new wave of structural demand is emerging. Artificial intelligence, electrification, defence spending, energy security, grid expansion, data centres and reindustrialisation are adding to the resource requirements of a world that was already consuming record quantities of materials. Rather than replacing traditional commodities, these trends are layering new sources of demand on top of existing needs for housing, transport, agriculture and infrastructure.

The implication is profound. The world is not becoming less dependent on mining—it is becoming more dependent on it. The question is no longer whether demand for minerals will continue to grow, but whether supply can expand quickly enough to meet it.

The direction of travel is clear. The OECD projects that global material use will almost double over the coming decades as economic growth and rising incomes continue to outpace improvements in resource efficiency. For critical minerals and metals, the outlook is even more pronounced. The World Bank estimates that the energy transition alone will require at a minimum doubling of overall critical energy transition minerals and metals by 2050 with a quadrupling required to reach net zero. This increase is not evenly distributed while copper demand may double annual lithium demand is likely to increase over 5 fold as will demand for several critical minerals. Those projections were made before the recent acceleration in artificial intelligence, data centres, defence spending and western reindustrialisation. Taken together, the evidence suggests the world is entering a period of structurally higher demand for minerals, not lower.

The Geography of Mineral Wealth

The world’s mineral endowment is distributed far more unevenly than its economic output. Large concentrations of copper, cobalt, manganese, platinum group metals, rare earths, graphite and bauxite are found in a relatively small number of countries, many of them in Africa, Latin America and Australia and Asia.

Africa possesses one of the world’s richest geological endowments and hosts a significant share of global reserves 20-30% of known reserves across mineral generally and at least 30% of critical, yet it accounts for a much smaller share of global mining output 8% over the last 75 years despite the fact that most of these reserves were discovered during this period and global mineral output has tripled.

This disconnect lies at the heart of Africa’s development challenge. Possessing mineral wealth is not enough. The nations that prosper during a mining supercycle will not necessarily be those with the largest reserves, but those able to convert geological endowment into investment, and production.

If the next mining supercycle is ultimately driven by a structural increase in the world’s material footprint rather than a temporary commodity boom, Africa enters this period with one of the world’s richest geological endowments. Geology alone will not determine who benefits. Institutions, capital, infrastructure and policy will.

The Mineral Myths

Two assumptions dominate discussions about Africa’s mineral future.

Myth 1: Africa has the minerals, so the world will have to come to us.

Myth 2: Processing minerals is the key to capturing greater value.

While both contain an element of truth, they are both fundamentally untrue in practice.

Africa possesses at least a quarter of the world’s known mineral reserves, yet over the past 25 years it has captured only a small share of the growth in global mineral production. According to World Mining Congress which has tracked global mineral production for over 25 years, the overwhelming majority of the increase in global mining output has come from Australia and Asia, where production has expanded by around 136%, compared with approximately 20% across most other regions, including Africa. Europe, meanwhile, has seen its mining industry contract significantly.

This is not because Australia or Asia possess dramatically superior geology. In fact, ore grades for many commodities—including copper and lithium—have been declining globally for decades, and many of today’s largest mining operations exploit average or relatively low-grade deposits. The difference is not the rocks. It is the ecosystem built around them.

Australia and Asia have spent decades creating the conditions in which mining can thrive. They invested in transport, ports and power. They developed stable and transparent mining codes, competitive fiscal regimes and deep pools of domestic capital. Governments co-invested in enabling infrastructure, supply chains evolved around the industry from the bottom up, and mining became supported by specialist engineering firms, equipment manufacturers, chemical suppliers, universities and skilled workforces.

Africa’s challenge, therefore, is not primarily one of geology or even processing. It is one of competitiveness. Nations do not become mining superpowers because they possess mineral deposits. They become mining superpowers because they build ecosystems that consistently attract investment and turn geological potential into production.

Processing came after. You cannot build a globally competitive processing industry without first building a globally competitive mining industry. Processing follows scale, reliable feedstock, low-cost energy, infrastructure and industrial ecosystems. It rarely leads them.

If Africa fails to build those ecosystems, it risks watching the next mining supercycle unfold much as it watched the last two: rich in resources, but capturing only a fraction of the investment, production and long-term economic value.

The Realities of Operational Mining in Africa

There is a widespread misconception that mining is an extraordinarily profitable industry. The reality is very different.

Large-scale commercial mining is one of the most capital-intensive and longest-duration industries in the world. From discovery to first production typically takes 15 to 20 years, requires hundreds of millions of dollars, and for many projects several billions of dollars before a single tonne of ore is sold.

Over the past 25 years, both capital expenditure (CAPEX) and operating costs (OPEX) have increased significantly in real terms. At the same time, ore grades have steadily declined across many commodities, forcing mines to become larger and more complex simply to maintain production. The industry has gradually passed a tipping point, and economies of scale have increasingly become diseconomies of scale. Returns on invested capital and internal rates of return have been trending lower for decades.

Mining is therefore a relatively low-return industry for the amount of capital employed. That is one of the reasons why the west sold off its own mining industries and was content to let China become the biggest miner and processer in the world. Mining was a difficult, dirty, capital intensive and relatively low returning business, compared to tech or other flashy high return busineses basic industry could not compete for investment dollars. They volatility and cyclicality of commodity prices mean mining goes from boom to bust on a regular basis. Mines are often discovered and financed during periods of elevated prices but only begin production many years later, when prices have frequently returned to more normal levels, often leaving miners and investors badly burned.

Having spent much of my career investing in development-stage mining projects across Africa, I had a front-row seat to the additional challenges of building mines on the continent.

Many of Africa’s most prospective deposits are located in remote regions with little existing infrastructure. Unlike many competing jurisdictions, mining companies are frequently required to finance much of the enabling infrastructure themselves, including roads, railways, power generation, water systems and worker accommodation. As a result, initial capital costs are commonly 25–50% higher than comparable projects elsewhere.

Operating costs are similarly elevated. Energy, reagents, specialist equipment, spare parts and skilled labour often need to be imported, increasing both cost and operational risk. Financing is also more expensive. The higher sovereign risk premium attached to many African jurisdictions increases the cost of both equity and debt, while the long development timelines extend project payback periods. It is uncommon for construction debt to be repaid in less than a decade.

Political and fiscal uncertainty further compounds these risks. During the life of a project, governments frequently change, mining legislation is revised and fiscal terms are renegotiated. Across many African jurisdictions, cumulative royalty, tax and state participation requirements are materially higher than those found in major mining jurisdictions such as Australia, Canada and the United States. The combined effect is a substantially higher investment hurdle rate.

The implications for investment are profound. In my experience, only the very best African projects—those with exceptional size, grade or economics—consistently attract development capital. Most deposits, although technically economic, simply cannot generate sufficient risk-adjusted returns to compete for scarce global mining capital. African mines that reach production are therefore the exception rather than the rule.

Unfortunately, the investment environment has become progressively more challenging. Resource nationalism has expanded across much of the continent through domestic processing mandates, higher royalties, restrictions on deducting exploration and development expenditure, mandatory local ownership requirements as well a free carries, and greater fiscal uncertainty. Each measure may appear reasonable in isolation, but together they further reduce already modest project returns.

As a result, many international mining companies have steadily reduced their exposure to higher-risk jurisdictions, preferring to allocate capital to countries offering more stable fiscal regimes, lower sovereign risk and more predictable investment environments. Chinese investment has followed a similar pattern. Although China remains an important investor in African critical minerals, its average investments in African minerals have fallen over 75% from their 2010 peak, and its capital has become increasingly concentrated in the largest, highest-grade and lowest-cost deposits rather than broadly distributed across the continent.

One of the greatest challenges is that mining economics are often misunderstood by policymakers.

Governments understandably focus on headline figures: billion-dollar mine valuations, short term high prices, and annual revenues. Investors evaluate something entirely different. They consider the billions of dollars invested before production begins, the decades required to recover that investment, the cost of capital, commodity price volatility, operating risk and whether the project will ultimately generate an acceptable risk-adjusted return.

A billion-dollar mine is not a billion-dollar profit. It is often the product of twenty years of exploration, engineering, permitting and construction financed largely through shareholder capital and debt that must first be repaid before investors receive meaningful returns.

The same misunderstanding frequently extends to mineral processing. Concentrates are worth less than refined metals because processing itself requires additional billions of dollars in capital investment, reliable low-cost electricity, chemical reagents, specialist engineering expertise and integrated industrial supply chains. Globally, mineral processing is also typically a single digit margin business, with profitability frequently compressed by volatile commodity and input prices.

The central lesson is therefore straightforward.

Mining investment does not flow to the countries that need it most. It flows to the projects offering the highest risk-adjusted returns. My 25 years of investing in Africa and analysis of the actual mines the got built show a clear and distinctive trend, only projects that make it into the top decile in terms of size and grade globally get developed in Africa, they are the only ones that can justify the risk and investment. That distinction explains why Africa’s extraordinary geological wealth has not translated into a proportionate share of global mining investment—and why, unless the investment environment changes, it may once again miss much of the next mining supercycle.

From rent extraction to infrastructure logic

One reason Africa develops so few mines is that many governments still approach mining primarily through the lens of mineral rent extraction. This is understandable: a large mine appears to offer an immediate source of royalties, taxes, carried interests, foreign exchange, and political visibility. But from an investor’s perspective, these same demands sit on top of already difficult project economics—long lead times, commodity volatility, expensive capital, and major infrastructure deficits—raising hurdle rates to the point where only the most exceptional deposits can justify development.

This creates a paradox. Governments seeking to maximise returns from mineral wealth often end up shrinking the number of mines that are ever built. In high-cost, high-risk jurisdictions, the effect is to concentrate investment in only the world-class top tier of deposits—those with exceptional size, grade, or strategic importance—while many technically economic projects remain undeveloped because they cannot absorb the combined burden of sovereign risk, self-funded infrastructure, and rising fiscal demands. The result is lower production, fewer jobs, less supplier development, and a narrower long-term tax base than would have emerged under a system designed to maximise the total size of the mining economy rather than the take from each individual project.

A more developmental approach would treat large-scale mining as enabling infrastructure for a future mineral economy. Under this logic, the first major mine in a remote district should be understood not merely as a revenue source but as an anchor investment around which transport, power, water, communications, geological knowledge, and industrial capabilities can accumulate. Public co-investment in these shared assets, or corridor-style planning that socialises part of the infrastructure burden, can lower entry costs for subsequent mines and allow an entire mineral province to emerge rather than a single isolated operation.

Seen this way, the objective of mining policy changes. Instead of trying to extract the maximum rent from the first mine, governments should seek to maximise the number of viable mines, the density of economic linkages between them, and the cumulative fiscal base that comes from a deeper, broader, more competitive mining sector. The countries that have become mining powers generally did not achieve it by taxing a few deposits heavily; they did so by building the roads, rails, ports, energy systems, institutions, and supplier networks that allowed many mines to operate profitably over long periods.

Why more mines matter more than higher rents

The strategic mistake in much African mining policy is to assume that the best way to capture value is to increase the state’s share of each project. In reality, for high-cost frontier jurisdictions, the larger developmental prize often lies in increasing the number of mines that reach production. Every additional mine adds not only royalties and taxes, but also roads, power demand, logistics flows, skilled employment, local procurement, training, contractor ecosystems, and the commercial justification for expanding shared infrastructure.

This matters because mining infrastructure has spillover effects far beyond the mine gate. Railways built for ore can reduce freight costs for agriculture and general trade; grid power developed for mines can anchor wider electrification; roads and water systems can support settlement, commerce, and manufacturing; and service clusters that begin with maintenance, drilling, explosives, transport, and engineering can evolve into domestic industrial capabilities. When several mines share these systems within a corridor, the economics improve further: unit transport and power costs fall, smaller deposits become viable, and regional mineral basins can develop into enduring growth poles rather than one-off extractive enclaves.

In this sense, a mine should be viewed less like a standalone tax object and more like an industrial node. If the policy goal is to maximise long-run GDP, employment, and fiscal revenues, then enabling ten commercially viable mines with moderate rents may be far more valuable than extracting very high rents from one or two flagship projects. A broader mining base also creates resilience: governments become less exposed to the failure, closure, or renegotiation of any single mega-project, while domestic firms gain more opportunities to scale across multiple operations.

The implication is profound. Africa does not need to abandon fiscal discipline or give away its minerals cheaply, but it does need to rebalance its strategy away from rent maximisation and toward sector maximisation. The long-term winners of the next supercycle are likely to be the countries that understand mining not simply as a source of revenue, but as a platform for building physical infrastructure, industrial capabilities, and a much larger economic geography of growth.

Creating a Competitive Mining Investment Environment

If Africa is to capture a greater share of the next mining supercycle, the objective should not simply be to attract more investment. It should be to become one of the world’s most competitive destinations for mining capital.

Mining capital is globally mobile. Investors compare projects in Zambia with those in Australia, Chile, Canada, Brazil and Indonesia. Capital flows to jurisdictions offering the highest and most secure risk-adjusted returns. This means African governments must not only overcome the continent’s natural cost disadvantages, but also compete internationally on policy, infrastructure and investment conditions.

The evidence suggests that countries consistently attracting mining investment tend to share ten common characteristics:

1. Provide secure, long-term mineral rights that recognise the 15–20 year timeline required to discover, permit and develop a commercial mine.

2. Maintain stable, transparent and internationally competitive fiscal regimes, including royalties and taxes that maximise investment over the life of the sector rather than short-term government revenue.

3. Protect investors through strong legal institutions and bilateral investment treaties, giving confidence that contracts will be honoured and disputes resolved fairly. Investment certainty remains one of the strongest determinants of long-term mining capital allocation.

4. Invest in enabling infrastructure including roads, railways, ports, water and power corridors through public investment and public-private partnerships, reducing the capital burden placed on individual mining projects.

5. Deliver abundant, reliable and internationally competitive energy, recognising that electricity and diesel are often the single largest operating costs for mining and mineral processing.

6. Develop domestic mining ecosystems, encouraging local engineering firms, equipment suppliers, reagent manufacturers, laboratories, logistics providers and technical services to reduce operating costs and improve productivity.

7. Expand access to long-term patient capital, working with development finance institutions, sovereign wealth funds and private investors to reduce financing costs for commercially viable projects.

8. Encourage, rather than mandate, downstream processing. Beneficiation should occur where it is internationally competitive. Governments incentivise economically viable processing through lower energy cost guarantees, infrastructure and investment incentives rather than requiring processing regardless of commercial viability.

9. Invest in geological surveys, exploration data and workforce development. High-quality geological information, technical education and skilled mining professionals reduce exploration risk and improve project economics. Africa’s exploration gap remains one of its largest structural disadvantages.

10. Treat mining as a long-term strategic industry rather than a short-term source of fiscal revenue. The countries that have built globally competitive mining sectors have generally prioritised policy consistency over repeated changes to mining codes, ownership requirements and fiscal terms.

There are already African examples demonstrating that these principles work. Botswana and Namibia have built reputations for policy stability and investor confidence. Rwanda has actively improved its mining governance and investment framework. Angola has undertaken significant reforms to modernise its mining code and attract greater private investment and built an incredible infrastructure corridor to service the mining sector. The Democratic Republic of Congo, despite continuing governance challenges, has attracted substantial investment into world-class copper and cobalt deposits because of the exceptional quality and scale of its mineral endowment and its willingness to engage directly with large mining companies and strategic investors.

By contrast, jurisdictions characterised by repeated changes to mining legislation, higher fiscal uncertainty, unreliable energy systems or increasing resource nationalism have generally experienced weaker exploration activity, project delays or capital outflows. The experience of countries such as Mali, South Africa and Mozambique illustrates how political instability, policy uncertainty or deteriorating operating conditions can reduce investment despite significant geological potential.

The central lesson is straightforward. Geology determines where minerals exist. Policy determines where investment flows.

Conclusion

The world is entering what may become the largest and most strategically important mining supercycle in history, driven not by a single temporary boom but by a structural rise in the global material footprint as economies industrialise, electrify, digitise, re-arm, and build new infrastructure. Demand for minerals is set to grow materially over the coming decades, and Africa should in principle be one of the major beneficiaries given the scale of its geological endowment.

Yet this opportunity is not guaranteed. Africa’s challenge is not that it lacks minerals, but that it has too often lacked the infrastructure, institutions, policy stability, and industrial ecosystems needed to convert mineral wealth into a larger and more competitive mining economy. In practice, the continent has built a model in which only a narrow band of world-class, top-decile projects can absorb the high costs of self-funded infrastructure, elevated sovereign risk, expensive capital, and unstable fiscal regimes, leaving many otherwise viable deposits stranded.

That is why the central issue is not simply attracting more mining investment, but changing the development logic that surrounds it. If large-scale mining continues to be treated primarily as a short-term source of rents, royalties, and bargaining leverage, Africa will likely continue to develop too few mines and capture too little of the wider industrial value that mining can create. But if mining is treated instead as long-term economic infrastructure—an anchor for roads, rail, ports, power systems, water networks, technical skills, local suppliers, and new industrial corridors—then the sector can support a much broader mineral economy whose aggregate fiscal, employment, and GDP benefits are far greater over time.

This matters even more because Africa is competing in an increasingly crowded global investment landscape. Capital is flowing not only to traditional mining jurisdictions with lower risk and better infrastructure, but also to new strategic frontiers, including deep-sea mining, which may in time compete for part of the same pool of mining capital, technology, and policy attention. The point is not that deep-sea mining will replace African mining, but that Africa can no longer assume that mineral scarcity alone will force the world to invest on its terms.

The countries that succeed in the next quarter-century will not necessarily be those with the greatest mineral endowment. They will be those that lower the structural cost of building mines, expand the number of projects that can reach production, and use mining to generate cumulative linkages across energy, transport, industry, and skills. Africa has the geology; what it now needs is a strategy that treats mining not as an enclave to be taxed, but as the infrastructure backbone of a far larger economic transformation.

This paper has argued that building that ecosystem from the top down is the essential first step. The next paper in this series will examine the complementary bottom-up side of the equation: how formalising artisanal and small-scale mining can help create the broader, more inclusive mineral economy that Africa still lacks.

Primary Data Sources and References

Amanda van Dyke (2026). The Mineral Imperative. New Generation Publishing.

International Council on Mining and Metals (ICMM). Mining Contribution Index and associated industry datasets.

OECD (2019). Global Material Resources Outlook to 2060: Economic Drivers and Environmental Consequences. Organisation for Economic Co-operation and Development.

OECD (2024). Global Material Resources Outlook to 2060: Updated Projections and Policy Scenarios. Organisation for Economic Co-operation and Development.

United Nations Environment Programme – International Resource Panel (IRP). Global Resources Outlook 2024: Bend the Trend – Pathways to a Liveable Planet as Resource Use Spikes.

United Nations Environment Programme – International Resource Panel (2019). Global Resources Outlook 2019: Natural Resources for the Future We Want.

United States Geological Survey (USGS). Mineral Commodity Summaries 2026.

United States Geological Survey (USGS). Minerals Yearbook (various editions).

World Bank (2020). Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition.

World Bank (2023). Commodity Markets Outlook (Critical Minerals and Energy Transition editions).

World Mining Congress. World Mining Data 2025 (and earlier editions where historical production data are used).

MaterialFlows.net. Global material flow, mineral reserve and production database.

S&P Global Market Intelligence (2024). Mine Economics and Development Time Studies (average mine development timelines).

International Energy Agency (IEA). The Role of Critical Minerals in Clean Energy Transitions (2021) and subsequent updates.

International Energy Agency (IEA). Global Critical Minerals Outlook 2024.

Fraser Institute. Annual Survey of Mining Companies 2024.

Centre for Strategic and International Studies (CSIS). Various reports on critical minerals, mining investment, African mineral policy and mineral security (2023–2026).

The United States was not merely another country declaring independence. It was an experiment built upon a radical proposition: that the individual possesses inherent rights which exist independently of the state, and that government derives its legitimacy only from the consent of those it governs.

Today those ideas seem so familiar that they can appear almost self-evident. Two and a half centuries ago they were anything but.

For most of human history, liberty was a privilege of the few. Kings ruled by divine authority. Aristocracies inherited power. Ordinary people owed allegiance to rulers, not the other way around. Individual freedom existed only insofar as those in power chose to permit it.

America turned that relationship upside down.

What is Liberty?

Liberty is often confused with freedom.

That is not what the Founders meant.

Liberty is the principle that every individual possesses natural rights—including life, property, conscience, speech and voluntary association—which government exists to protect rather than grant.

Government therefore becomes limited by design.

The citizen does not exist to serve the state.

The state exists to serve the citizen.

This was the revolutionary idea that echoed far beyond America’s shores.

Why Democracy Requires Liberty

Democracy is often described simply as majority rule.

But majority rule alone is not enough.

If 51 percent of society can vote away the rights of the remaining 49 percent, liberty disappears.

Democracy without liberty becomes little more than elected authoritarianism.

Liberal democracy therefore combines two separate principles.

The first is democracy—the ability of citizens to choose their government.

The second is liberalism—the protection of individual rights even against democratic majorities.

Neither survives for long without the other.

Liberty gives democracy legitimacy.

Democracy protects liberty from tyranny.

Capitalism and liberty are co dependent concepts

Economic liberty is the natural extension of political liberty.

Capitalism is simply a system in which individuals are free to own property, invest capital, exchange goods and services voluntarily, and create businesses largely independent of state control.

It is built upon the same philosophical foundation.

If individuals own themselves, they should also own the fruits of their labour.

Without secure property rights, freedom of contract and the rule of law, neither capitalism nor liberty can flourish.

America became the world’s greatest engine of innovation not because it possessed abundant resourcesor capital , but because it built institutions that protected both political and economic freedom and individual liberty which created the ideal incubator for innovation, that is why for 250 years America has been the most innovative nation in the world.

Liberal Democracy and Social Democracy

Much of today’s political debate suffers because different political traditions are often conflated.

A liberal democracy is defined primarily by constitutional limits on government, strong protection of individual rights, private property, free markets, the rule of law and representative government.

A social democracy pays lip service to these liberal democratic ideals but subjugates them to the needs of “society”, and advocates a significantly larger role for government in providing social welfare, public services and economic redistribution through taxation.

Social democracy is ultimately a hybrid socialism and liberal democracy.

Socialism, in its traditional sense, involves public or collective ownership of the means of production, with the state playing a dominant role in directing economic activity, with high taxation, extensive social insurance and income redistribution.

Most European countries are not socialist, but nor are they liberal democracies, they exist as a hybrid on a spectrum, and they move more towards socialism, they move further from liberty. They needs of society supersede the rights of the individual.

Is Liberal Democracy Under Threat?

Perhaps the greatest irony of America’s 250th anniversary is that many of the principles that once defined it have become subjects of intense domestic debate.

Across the political spectrum there are growing calls for government to take a larger role in shaping economic outcomes, regulating speech, directing industrial policy and addressing perceived inequalities.

Supporters argue these interventions are necessary to solve modern challenges.

Critics worry they gradually erode the very liberties upon which the American experiment was built.

At the same time, others argue that liberty itself remains the central organising principle of the republic—that individual rights, limited government and constitutional constraints are not historical relics but the very foundations of American exceptionalism.

This debate is no longer merely about tax rates or public spending.

It is about competing visions of the relationship between the individual and the state.

The American Experiment

250 years ago a handful of men advanced perhaps the most radical political idea in human history.

That the individual does not belong to the state.

The state belongs to the individual.

That single idea changed the world.

It created the most prosperous, innovative and powerful civilisation in history.

And today, I fear many Americans no longer understand why.

The great political debate of our time is not really about healthcare, taxes or student debt.

It is about one question.

Who should hold power?

The individual?

Or the state?

Every political philosophy ultimately answers that question.

Liberal democracy answers it one way.

The individual comes first.

Government exists to protect rights, not manufacture them.

Its powers are deliberately limited because every power given to government is a liberty surrendered by the citizen.

Socialism answers the question differently.

It begins from the premise that society can be organised more fairly if the state directs a greater share of economic life.

That may sound compassionate.

History suggests something rather different.

Socialism is not simply an economic model.

It is a philosophy that steadily transfers power away from individuals and towards governments.

If government owns your industry, it controls your livelihood.

If it controls your livelihood, it controls your choices.

If it controls your choices, liberty survives only so long as government permits it.

This is why socialism has repeatedly struggled to preserve political freedom in the countries where the state has assumed dominant control over economic life. From the Soviet Union to China, from North Korea to Cuba and, more recently, Venezuela and Iran, concentrations of economic power in the hands of the state have often gone hand in hand with concentrations of political power. Critics of socialism argue this is not an accident but a natural biproduct of the system. Socialism and liberty exist at opposite sides of a spectrum.

Europe vs America

Europe largely evolved from monarchies.

Over centuries, many European states replaced hereditary rulers with democratic institutions while also expanding the economic and social role of government.

Most remained capitalist economies, but many adopted social-democratic models characterised by higher taxation, larger welfare states and broader public services.

They sought “equality” not liberty for their peoples.

America took a different path.

Its founding principle was not equality.

It was liberty.

Not that all people would achieve the same outcomes.

But that every person would possess the freedom to pursue them.

That distinction matters.

Because liberty is not merely one value among many.

It is the condition that makes every other freedom possible.

Lose liberty, and eventually you lose free speech.

Lose liberty, and property becomes conditional.

Lose liberty, and enterprise depends upon political favour.

Lose liberty, and government ceases to be your servant and becomes your master.

This is why I worry when I hear increasing numbers of Americans calling for equality without recognising the trade-offs involved.

True Socialism is about making everyone equal and that necessarily requires forfeiting liberty.

Thomas Jefferson

Thomas Jefferson (1743–1826) was one of the principal architects of the American Revolution and perhaps the most influential advocate of the concept of individual liberty in the early United States.

He was the principal author of the United States Declaration of Independence and a lifelong defender of limited government, religious freedom and republican self-government.

Jefferson believed that liberty was not something granted by governments.

Rather, it was a natural right that every person possessed by virtue of being human.

Government’s purpose was therefore not to create liberty but to protect it.

This idea appears most famously in the Declaration of Independence:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed... with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

Jefferson distrusted concentrations of political power regardless of who held it.

He believed governments naturally seek to expand unless restrained.

One of his most famous observations was:

“The natural progress of things is for liberty to yield and government to gain ground.”

He also wrote:

“When government fears the people, there is liberty. When the people fear the government, there is tyranny.”

Jefferson wrote this in a 1787 letter to William Stephens Smith while commenting on Shays’ Rebellion his best-known statement on liberty:

“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”

He was arguing that occasional resistance to government was preferable to a population that accepted tyranny without question.

Jefferson’s lasting contribution

Jefferson’s greatest contribution was not simply helping to found the United States. It was articulating a political philosophy in which:

• The individual is sovereign.

• Rights are inherent, not granted by the state.

• Government is limited and accountable.

• Liberty is the prerequisite for prosperity and self-government.

Jefferson’s famous words about the tree of liberty remind us that liberty is never permanently secured.

Every generation inherits it.

Every generation redefines it.

Every generation decides how much power government should possess, and how much freedom individuals should retain.

That conversation has now continued for 250 years.

Whether America remains the world’s foremost example of liberal democracy will depend not upon military strength or economic output, but upon whether it continues to believe the extraordinary proposition upon which it was founded: That individuals possess rights before governments possess power.

Happy 250th Birthday, America.

The reason is that I’ve been back in academia.

I was invited to speak at the Governors’ Roundtable for African Central Bank Governors, organised by the Centre for the Study of African Economies at the University of Oxford and hosted at the Saïd Business School. My role was to provide an update on the state of mining, critical minerals and investment across Africa, and to discuss what the next global mining supercycle could mean for the continent.

I have to admit, I arrived expecting a room full of economists who knew very little about mining.

I couldn’t have been more wrong.

I was genuinely impressed by the depth of knowledge in the room. These weren’t academics discussing the industry in the abstract—they were central bank governors and policymakers who understood their countries’ mining sectors in remarkable detail. The conversations were refreshingly candid, focusing not just on the opportunities, but on the very real challenges of designing policies that attract investment, create jobs and ensure their nations capture more value from their mineral wealth.

One discussion, in particular, surprised me.

Going into the roundtable, one of my key policy recommendations was the formalisation of Africa’s artisanal and small-scale mining sector. I expected this to be one of the more controversial ideas. Instead, I found many governors were already thinking along similar lines, with some countries having made significant progress in bringing artisanal mining into the formal economy. Rather than viewing it simply as a law enforcement issue, they recognised both its economic importance and its potential to become a powerful driver of inclusive development if managed properly.

Those conversations were enormously encouraging. They reinforced my belief that many African policymakers are asking exactly the right questions. The challenge is no longer recognising the opportunity—it is building the institutions, investment climate and mining ecosystems capable of turning extraordinary geological wealth into long-term prosperity.

Preparing for the discussion forced me to step back from my usual shorter articles and write two much more substantial research papers. Together they run to more than 50 pages and attempt to answer important questions facing Africa’s resource future.

Below are my remarks, and following that brief summaries of the two papers.

Remarks

I’d like to start with a simple observation. Africa possesses around a quarter of the world’s known mineral reserves. Yet after more than a century of modern mining:

• Africa produces less than 8% of global minerals.
• Mining contributes less than 5% of African GDP.

That should make all of us uncomfortable. Because if geology determined prosperity, Africa should already be one of the richest industrial regions on Earth. Instead, I want to suggest something different. Perhaps Africa doesn’t have a geology problem. Perhaps it has a mining ecosystem problem. That is what this presentation and my paper are about.

In January 2026, I published The Mineral Imperative, a book that argues that minerals are the foundation of modern civilisation and that every major technological, economic and geopolitical transformation ultimately depends on secure access to raw materials. The book examines how critical minerals are reshaping global energy systems, industrial policy, defence, supply chains and international competition, and explores why resource security is becoming one of the defining strategic challenges of the twenty-first century.

The timing could not be more important. I believe the next mining supercycle has already begun. Unlike the China supercycle this one isn’t driven by one country. It is driven by almost every structural force that has ever created a commodity boom:

• industrialisation
• urbanisation
• electrification
• AI
• defence
• energy security
• reindustrialisation

...all happening simultaneously. I don’t think we’ve ever seen that before. People often talk about population Population isn’t the story. GDP is that is what drives mineral consumption and mineral demand growth. As countries become richer they build roads, cities, power stations, data centres, defence industries... Everything we associate with prosperity requires more materials. The OECD expects material demand to continue rising dramatically. The World Bank expects demand for many critical minerals to double, triple and, in some cases, increase 5-10 fold. This isn’t a temporary boom. It’s a structural change in human material metabolism.

Africa should be the biggest beneficiary...

Over the last 75 years the world has tripled its mineral output. Over the last 25 years global mining output has expanded enormously. Where did most of that growth occur? Australia and China both grew their mining industries by over 135% each over the last 25 years. South America, Africa event North America all increased their output by approximately ~20%, only Europe declined production by over 40%.

That surprised me. Because Africa has extraordinary geology and clearly larger proportional reserves than any other place in the world. So I started asking a different question. Why?

The two biggest myths

I think there are two myths that dominate African mining policy.

The first is...

“We have the minerals.
The world will have to come to us.”

I am afraid that simply isn’t true. Capital has choices, capital follows returns, not geology.

The second myth...

“Processing is the answer.”

Again... not necessarily. Processing follows competitive mining ecosystems, it rarely creates them.

Australia didn’t build smelters first. China didn’t become a processing powerhouse without first building an enormous mining and industrial ecosystem. Mining came first. Scale came second. And only when large mining industries had been built did processing follow, and even there it followed only where reagents, energy and infrastructure converged to make processing economic.

What I learned as an investor

For 25 years I invested in mining projects. bMany of them were in Africa. One lesson became obvious. Mining is incredibly difficult everywhere. It takes...15 to 20 years. Hundreds of millions... billions... before producing a single tonne. Returns are often surprisingly modest.

Then Africa adds:

· Higher infrastructure costs.

· Higher financing costs.

· Higher operating costs.

· Higher sovereign risk.

· Longer payback periods.

· Higher taxes.

· Changing fiscal regimes.

· Resource nationalism.

Eventually I realised something. Only exceptional African projects get financed.

When I looked at all of the projects that have been successfully financed in the last 25 years the all had something in common. Compared to projects globally they biggest, the highest grade and the lowest cost per unit. They were the top decile of projects not just in Africa, but globally. Everything else struggles to compete globally. What that means is that despite having 25% of the worlds known mineral reserves only the top 10% of projects made it.

The real competition

Africa often believes it is competing with Chile, Australia, Canada. Africa believed that it had the resources to people would have to come to them. That has not proved true. It is competing with something much bigger its slice of the mining pie. The world is changing. The United States is reopening mines. Europe is reindustrialising. Governments are treating minerals as national security. Capital is becoming more selective. And... for the first time... there is another frontier. The deep ocean.

Regardless of whether people support deep-sea mining... we have to acknowledge something. It exists. World-class deposits have already been identified. China has invested tens of billions of dollars building deep-ocean capability. The United States is now moving rapidly stage 1 commercial mining is set to begin in 2027. If deep-sea mining proves commercially successful... Africa no longer competes only with land or even just resources it must prove that the entire African minerals supply chain can compete on every level. That changes the strategic equation.

So what should Africa do?

This is where I think we have been asking the wrong question. The question isn’t... How do we attract another mine? The question is... How do we build a self sustain mining ecosystem? Countries that consistently attract mining investment all have remarkably similar characteristics.

· Reliable infrastructure.

· Reliable energy.

· Reliable supply chains

· Stable fiscal regimes.

· Secure mineral rights.

· Patient capital.

· Engineering capability.

· Mining services.

· Skilled people.

· Transparent regulation.

In other words... they don’t just have mines. They have mining industries.

My central argument

My argument is actually very simple. For decades... Africa has pursued a top-down model. Attract foreign miners. Hope development follows. Sometimes it does. Often it doesn’t. Billion dollar mines are high tech enclaves, that struggle to integrate and are forced to import much of what they need to produce efficiently and have only minor linkages with local supply chains that are not capable of servicing what they need. Ecosystems capable of working with high tech mining doesn’t start top down, it grows bottom up. You need to build the ecosystem first. Then investment accelerates naturally. Mining becomes larger. Supply chains emerge. Processing becomes commercially viable. Industrialisation follows. Bottom-up. Not top-down.

Closing

I’d like to leave you with one thought. Africa undoubtedly has the geology. But geology has never guaranteed prosperity. Institutions matter. Infrastructure matters. Capital matters. Policy matters. The next mining supercycle may be the greatest economic opportunity Africa has seen in generations. But opportunities are not captured by those who possess resources. They are captured by those who create the most competitive environment in which to develop them. So perhaps the question for all of us is not: Does Africa have the minerals? We already know the answer. The question is: Will Africa build the ecosystem before somebody else builds a better alternative?

Thank you.

I look forward to the discussion.

Paper 1: Will the next mining supercycle pass Africa by?

Africa possesses some of the richest mineral resources on Earth, yet after decades of foreign investment it still accounts for less than 8% of global mineral production. Meanwhile, the world is entering what could become the largest mining supercycle in modern history, driven not by a single factor like China’s industrialisation, but by electrification, artificial intelligence, defence spending, infrastructure, re-industrialisation and economic security all occurring simultaneously.

My central argument is that Africa’s greatest challenge is not geology.

It is competitiveness.

Countries do not become mining superpowers simply because they have minerals. They become mining superpowers because they build the institutions, infrastructure, skilled workforces, supply chains and investment environments that allow those minerals to be developed competitively. Australia and China spent decades building mining ecosystems that eventually turned into the world’s mining giants. Too often, Africa has focused on attracting individual mines rather than creating an industry.

Paper 2: Formalising the Informal: A Framework for Inclusive Mineral Development in Africa Microfinance, Digital Governance, and Toll Milling as Catalysts for Economic Transformation

The second paper looks at what I believe is one of the biggest missing pieces in Africa’s mining strategy.

For decades, governments have concentrated on attracting large-scale foreign mining investment. That remains essential. But large mines take 10–20 years to build, employ relatively few people and often struggle to create the wider economic linkages policymakers hope for.

Meanwhile, between 20 and 30 million Africans already work in artisanal and small-scale mining. Rather than treating this sector simply as an illegal problem to eliminate, I argue it should be viewed as an economic opportunity to formalise.

The paper proposes a framework built around digital licensing, microfinance, cooperative financing, toll milling and transparent mineral purchasing. Instead of criminalising millions of miners, governments could gradually bring them into the formal economy, improving environmental standards, increasing government revenues, creating jobs and allowing local mining businesses to grow into tomorrow’s African mining champions.

Although written for an academic and policy audience, both papers ultimately come back to the same idea.

Africa does not lack mineral wealth.

It does not lack opportunity.

What it lacks is an ecosystem capable of turning geology into long-term prosperity.

The next mining supercycle may be the greatest opportunity the continent has seen in generations. But whether Africa captures it will depend far less on what lies beneath the ground than on the policies, institutions and investment environment built above it.

Elon Musk wants to colonise Mars.

Governments discuss lunar mining.

Investors talk about asteroid resources.

Entire industries have emerged around the idea that humanity’s next frontier lies beyond Earth’s atmosphere.

But from a purely economic perspective, this may be the wrong frontier.

The deep ocean is not hypothetical.

It already exists.

It already contains enormous quantities of resources.

It already hosts critical infrastructure.

It already determines military power.

And unlike Mars or asteroids, it sits directly beneath our feet.

The reality is that no civilisation will build large-scale mining operations on asteroids before it learns how to systematically operate across the ocean floor.

The next frontier is not 225 million kilometres away.

It is five kilometres beneath the surface of our own planet.

We Talk About Satellites. The World Runs On Cables.

Space receives the headlines.

But it is the ocean carries more data that space has ever dreamed of.

There is a common misconception that satellites now dominate global communications.

They do not.

Even if Starlink were to quadruple in size and grow from roughly 2% of global internet traffic to 8%, more than 90% of global data would still travel through subsea cables.

The modern economy depends on a 2million km long network of approximately 600 undersea cables carrying:

• financial transactions;

• internet traffic;

• cloud computing;

• military communications;

• AI data flows.

Without them, global commerce would grind to a halt.

Every major technology company depends on them.

Every financial market depends on them.

Every modern military depends on them.

The information age is not built on satellites.

It is built on the seabed.

The Largest Energy Province On Earth

When most people think about the deep ocean, they think about minerals.

But hydrocarbons remain enormously important.

Today roughly one-third of global oil production already comes from offshore fields.

Many of the world’s largest undeveloped petroleum resources lie offshore.

Brazil.

Guyana.

Norway.

The Gulf of Mexico.

West Africa.

The Eastern Mediterranean.

The Arctic.

Future discoveries are increasingly likely to come from deeper waters.

The deep ocean is not merely the next mineral frontier.

It is one of the world’s most important energy frontiers.

The Forgotten Geography Of Power

History’s great powers were rarely land powers first.

They were maritime powers.

The Portuguese.

The Dutch.

The British.

The Americans.

Control of the oceans enabled:

• trade;

• resource access;

• military projection;

• industrial expansion.

The sea has always been the operating system of global power.

This is why Chinese interest in oceanography deserves more attention.

Because every empire for the last 100 years has been a maritime one, and began with understanding the sea.

Maps came first. Ships came second. Power followed.

The New Great Game Is Already Underway

China and Russia are conducting some of the most extensive seabed mapping efforts in modern history.

Officially, these missions are scientific.

Many undoubtedly are.

But throughout history, scientific exploration and strategic competition have often advanced together.

The same survey data that identifies mineral deposits can support submarine operations.

The same oceanographic measurements that support climate research can support anti-submarine warfare.

The same seabed maps that help lay cables can help locate them.

Or cut them.

The distinction between civilian and strategic capability becomes increasingly blurred beneath the ocean.

Why Greenland Matters

This is one reason Greenland has become so strategically important.

Much of the public discussion focuses on rare earths.

But the deeper issue is geography.

Greenland sits astride one of the most important maritime approaches to North America.

The Greenland-Iceland-United Kingdom (GIUK) Gap has been one of NATO’s most important naval chokepoints since the Cold War.

Any Russian submarine entering the Atlantic must pass through or around it.

Control and monitoring of these routes remains essential to North American security.

As Arctic ice retreats and northern sea routes become more accessible, the strategic importance of this region is likely to increase rather than diminish.

The deep ocean surrounding Greenland is therefore not simply a resource story.

It is a security story.

China Isn’t Just Building A Deep-Sea Mining Industry. It’s Mapping The Next Frontier Of Human Power.

For most of human history, power followed maps.

The Portuguese mapped the sea lanes.

The Spanish mapped the Americas.

The British mapped the world.

The Americans mapped the skies and eventually space.

Today, China is mapping the deep ocean.

And I suspect most people still fail to understand what that means.

Because this is not really about deep-sea mining or critical minerals.

It is about the largest unexplored territory left on Earth.

The Last Unclaimed Frontier

Roughly 70% of our planet is covered by ocean.

Yet the overwhelming majority of humanity’s economic activity occurs on a tiny fraction of its surface.

Beneath those oceans lies a realm larger than all continents combined.

Much of it remains poorly understood.

It is almost impossible to surveil or monitor.

Vast regions of the abyssal plains, mid-ocean ridges, fracture zones and hadal trenches remain less thoroughly mapped than parts of the Moon.

Critically, almost half of the Earth’s surface lies beyond the jurisdiction of any nation state.

No sovereign government controls it.

No army occupies it.

No permanent population inhabits it.

From a geopolitical perspective, this is extraordinary.

For the first time since the colonial era, there exists a frontier of global significance that remains largely unconquered.

China Appears to Understand This

Western discussion of the deep ocean is almost entirely focused on whether deep-sea mining should happen.

China’s discussion appears very different.

China is systematically building the capability required to understand, access and eventually operate throughout the deep ocean.

The evidence is becoming difficult to ignore.

According to CSIS, China now operates the world’s largest fleet of civilian research vessels.

Researchers identified 64 full time active Chinese survey and research vessels conducting operations across the globe. More than 80% exhibited behaviours, affiliations or activities suggesting strategic value beyond purely civilian science.

The scale is remarkable.

Chinese survey vessels are active throughout:

• the South China Sea;

• the Western Pacific;

• the Indian Ocean;

• the Arctic;

• the Southern Ocean.

This is not regional science.

This is global mapping.

The New Cartographers

Recent reporting from Reuters suggests China is conducting one of the largest ocean mapping programmes in modern history.

Researchers examined more than five years of activity from dozens of Chinese research vessels operating across the Pacific, Indian and Arctic Oceans.

The vessels repeatedly sailed precise grid patterns characteristic of detailed seabed mapping and oceanographic surveys. Naval analysts noted that the resulting datasets would be invaluable for future submarine operations and underwater warfare.

This should not surprise us.

You cannot dominate an environment you do not understand.

Before navies project power, they map.

Before miners extract resources, they survey.

Before cables are laid, the seabed is characterised.

Before submarines hide, someone studies the ocean’s acoustic properties.

Knowledge always comes first.

China Has Built The World’s Largest Full-Ocean-Depth Exploration Programme

China’s two flagship manned submersibles alone have accumulated remarkable operational experience.

• Jiaolong has completed 317 dives and supported roughly 900 deep-sea descents since 2009.

• Fendouzhe (Striver) has completed 329 dives, including 25 dives below 10,000 metres, more than any other nation’s full-ocean-depth programme according to Chinese sources.

• Fendouzhe can reach 10,909 metres, effectively the entire depth of the world’s oceans.

While Western nations conduct occasional flagship expeditions, China has spent the last fifteen years industrialising deep-sea exploration.

China Has Moved Beyond Exploration Into Persistent Presence

One-off dives are impressive.

Persistent capability is more important.

China now operates:

• multiple dedicated deep-ocean research fleets;

• specialised survey vessels;

• full-ocean-depth submersibles;

• deep-sea ROVs;

• seabed observatories;

• deep-sea drilling capability;

• autonomous underwater systems.

The strategic distinction is important:

The United States can reach the deep ocean.

China is building the ability to operate there continuously.

The Electromagnetic Mapping Breakthrough Is Bigger Than Most People Realise

The recent Haiyang Dizhi-6 expedition may be one of the most important developments.

China completed sea trials of what Chinese sources describe as:

the world’s first full-ocean-depth (10,000-metre-class) electromagnetic acquisition station and offshore operating system.

Why this matters:

Traditional seabed mapping mostly tells you:

• shape of the seabed;

• bathymetry;

• physical features.

Electromagnetic surveying tells you:

• electrical conductivity;

• rock composition;

• buried geological structures;

• fluid pathways;

• hydrothermal systems;

• mineralised zones;

• potential hydrocarbon accumulations.

In simple terms:

Sonar tells you what the seabed looks like.

Electromagnetic systems tell you what is hidden beneath it.

The fact that China is now deploying such systems at 7,700-10,000 metre depths is strategically significant because it allows them to map resources and geology that many nations cannot even physically access.

And they wouldn’t be mapping it if they didn’t have a plan for mining it.

China Is Mapping The Hadal Zone While Most Nations Are Barely Studying It

The deepest parts of the oceans are known as the hadal zone.

Very few countries can routinely access them.

China’s recent expedition specifically highlighted research into:

• abyssal rift systems;

• hadal-zone Earth systems;

• ultra-deep geological structures.

Most countries still regard these regions as scientific curiosities.

China increasingly appears to view them as future operating environments.

The Mineral Resource Prize

Of course mineral resources matter. There is an uncomfortable reality that I mapped out in the Mineral Imperative.

We have severely deteriorated the resources available on land, grades are less than half of what they were 25 years ago, yet in the next 25 years we need to mine 3x minimum what we did in the last 25.

The seabed contains:

• polymetallic nodules;

• cobalt-rich crusts;

• massive sulphides;

• rare earth-bearing sediments.

Collectively these may represent one of the largest untapped concentrations of strategic materials on Earth.

China already dominates much of today’s mineral supply chain.

The logical next step is securing influence over tomorrow’s.

Viewed through this lens, deep-sea mining begins to look less like an environmental debate and more like a continuation of China’s long-term resource strategy.

The Resources are only half the Prize, the Naval Prize is the other half

The same datasets useful for mining are useful for:

• submarine navigation;

• anti-submarine warfare;

• cable routing;

• cable interception;

• seabed warfare;

• underwater drone operations.

CSIS has highlighted that many Chinese research vessels operate in ways that create strategic datasets with potential military utility. The overlap between civilian oceanography and naval capability is substantial.

Every map of a mineral deposit is also a map for a submarine.

The military implications could ultimately prove even more significant.

Oceanographic surveys reveal:

• seabed topography;

• thermal layers;

• salinity gradients;

• underwater acoustic conditions.

These factors determine how submarines move, hide and detect one another.

CSIS researchers note that much of the information gathered by civilian survey vessels could directly support future naval operations.

The same map that identifies a mineral deposit can identify an optimal submarine route.

The same survey that supports science can support anti-submarine warfare.

The same vessel that collects geological data can collect strategic data.

History Suggests This Is Normal

Great powers rarely build capabilities for a single purpose.

Merchant fleets became navies.

Railways moved troops.

Satellites became military infrastructure.

The internet began as a defence project.

The deep ocean is unlikely to prove any different.

The West Is Fighting The Last War

The West continues to debate whether deep-sea mining should occur.

China appears to be preparing for a future in which deep-ocean activity is inevitable.

One side is arguing over permission.

The other is building capability.

This distinction matters.

Because when history looks back on the twenty-first century, deep-sea mining may prove to be only a small part of a much larger story.

The real story may be that humanity finally began to occupy the largest territory it had never fully explored.

And while much of the world debated whether that should happen, China quietly started mapping it.

The next great geopolitical contest may not be in space.

It may be in the half of our planet that remains largely beyond the control of nation states.

And China appears determined to get there first.

The Ocean Is What Space Wants To Become

Space advocates often describe a future built around:

• resource extraction;

• communications infrastructure;

• strategic competition;

• energy systems;

• transportation networks.

But these are not future realities.

They already exist in the oceans.

The deep ocean already hosts:

• global communications;

• resource extraction;

• strategic military competition;

• critical infrastructure;

• international rivalries.

In many ways, the ocean is simply a more mature version of what space enthusiasts imagine space may eventually become.

The Frontier We Forgot

The twenty-first century has become obsessed with space.

Meanwhile, the world’s largest and most aggressive powers are quietly investing billions in understanding the ocean floor.

One frontier may eventually transform civilisation.

The other already underpins it.

Oceans cover 70% of the planet, regulate the climate, produce more than half the world’s oxygen, and sustain human economies through food transportation and resources.

The Dutch built maritime power.

The British built maritime power.

The Americans built maritime power.

Each rose to global dominance through mastery of the oceans.

China appears to have drawn the same lesson.

The Portuguese did not become a maritime empire because they possessed colonies.

They became a maritime empire because they possessed maps.

The British did not rule the seas because they owned resources.

They ruled because they understood the oceans better than their rivals.

Before every maritime empire came cartographers.

Before every conquest came exploration.

Before every resource boom came geological surveys.

China appears to be following the same sequence.

While much of the West dreams of conquering Mars, China is systematically mapping, surveying and preparing to operate across the largest territory on Earth that remains beyond the control of any nation.

It is also has the richest mineral and hydrocarbon potential of any territory on the planet.

The next great geopolitical contest will not be fought in space.

It may be fought across the 50% of our planet that still lies largely beyond sovereign control.

And by the time the West realises that, China won’t just have mapped it, they might have colonised it.

The scale and coordination are remarkable. Serious money is on the table. Federal agencies are aligned. Universities, private capital, allied governments and industry are pulling in the same direction. From mines and processing facilities to research consortia and supply chain partnerships, the United States is making a serious attempt to challenge China’s dominance.

And yet, progress remains painfully slow.

Projects take longer than expected. Plants struggle to achieve specification. Costs rise. Timelines slip. Politicians grow frustrated.

Why?

Because industrial capability isn’t something you buy.

It’s something you learn.

The uncomfortable reality is that the energy transition is not simply a race for breakthrough technologies. Increasingly, it looks like a race to rebuild industrial memory.

Rare earths happen to be the perfect case study.

Rare Earths Reveal Why Making Things Is Hard

On paper, rare earth separation looks straightforward.

Dig the ore.

Crush it.

Float it.

Leach it.

Separate it.

Precipitate it.

Calcine it.

The chemistry has been published for decades. The flowsheets are public. Universities teach the underlying science.

Yet only a handful of countries can consistently produce on-spec rare earth oxides and magnet materials at commercial scale.

Why?

Because technology is the easy part.

Industrial craft is the hard part.

Every ore body is different. Trace impurities behave differently. Grain sizes vary. Water chemistry changes. Reagents perform inconsistently.

The result is that operators are constantly making thousands of small adjustments: tweaking pH, changing phase ratios, altering residence times and modifying scrubbing stages.

The plant only works because people learn how that particular ore behaves in that particular circuit.

The real expertise often looks mundane.

Knowing that turbidity in one tank means something went wrong three stages upstream.

Recognising that a subtle colour change indicates an impurity breakthrough.

Understanding when to push a circuit harder and when to back off before product quality deteriorates.

None of this appears in a patent.

None of it can be downloaded from a journal article.

It exists as tacit knowledge.

It is the accumulated judgement of operators, engineers and technicians solving problems together, day after day.

The “art” isn’t mystical. It’s embedded competence.

Over time, this becomes organisational memory: standard operating procedures, unwritten rules, shortcuts and stories that begin with, “Don’t ever do that again unless you want to shut the whole plant down.”

Once you lose an industrial base, you don’t just lose equipment.

You lose memory.

This isn’t unique to rare earths.

Learning curves exist across industries. From aviation to semiconductors, industrial progress rarely arrives through sudden breakthroughs. It emerges through learning-by-doing: thousands of iterations, incremental improvements and experience accumulated over decades.

What America Actually Lost

In 1990, the United States was the world’s largest producer of rare earths.

When Mountain Pass shut down following environmental problems in the early 2000s, America didn’t simply lose a mine.

It unwound an ecosystem.

Process engineers moved into other sectors.

Operators retired.

Analytical laboratories disappeared.

Specialty chemical suppliers found new customers.

Universities stopped training students in relevant disciplines.

Customers adapted to overseas supply chains.

When production stopped, tacit knowledge dispersed.

Rebuilding means restarting the learning curve.

It means years of pilot plants.

Off-spec batches.

Rejected shipments.

Cost overruns.

Environmental compliance failures.

Customer qualification cycles.

It means accepting the discomfort of inefficiency at the beginning.

New facilities will often be sub-scale, expensive and imperfect.

The question is not whether America can access the technology.

The question is whether it is willing to pay the tuition required to relearn the craft.

Japan’s Lesson: Money Isn’t Enough

Japan learned this lesson the hard way.

Following the 2010 fishing boat dispute with China and the subsequent de facto export restrictions, Japan discovered that having world-class laboratories was not the same as having rare earth security.

It responded aggressively.

It diversified imports.

It invested overseas, most notably through Lynas.

It supported domestic processing initiatives.

It pursued deep-sea rare earth opportunities near Minamitorishima Island.

It strengthened partnerships with allies.

And yet, by 2025, Japan still accounted for only around 5% of global refined rare earth production.

Enough to provide a buffer against short-term disruption.

Nowhere near enough to independently supply its own industrial base.

Only this month, Shin-Etsu Chemical announced plans for a new government-supported refining facility focused on heavy rare earths such as dysprosium and terbium, alongside yttrium used in semiconductor manufacturing.

Even for Japan—with strong industrial firms, sophisticated customers and active government support—it has taken more than a decade to rebuild capability.

Industrial ecosystems operate on learning curves measured in years.

Sometimes decades.

How China Really Built Dominance

China did not wake up one morning and decide to dominate rare earths.

It built an industrial learning system over roughly sixty years.

Act I: Discovery and Early Learning

In the late 1950s, China began recovering rare earths from Bayan Obo in Inner Mongolia as a by-product of iron and steel production.

The initial objective was simple: extract more value from existing resources.

Engineers were assigned to improve recovery.

Technical expertise accumulated.

Problems were solved through repetition.

China learned by doing.

Act II: Strategic Specialisation

During the 1980s and 1990s, output expanded rapidly as global demand increased.

Beijing recognised rare earths as strategically important.

Universities and research institutes received funding.

Rare earth chemistry, separation technologies, phosphors and magnet applications became national priorities.

Industrial zones clustered laboratories alongside production facilities.

Chinese firms acquired overseas assets, technologies and expertise, including businesses such as Magnequench.

But buying technology was only the beginning.

Processes had to be transplanted.

Adapted.

Debugged.

Integrated into domestic supply chains.

China aligned cheap feedstock, industrial policy and export-led manufacturing to turn rare earths into a national comparative advantage.

Act III: Consolidation

By the late 1990s, Beijing recognised that uncontrolled mining and cheap exports were creating environmental damage while allowing others to capture downstream value.

Production quotas followed.

Export restrictions emerged.

Environmental standards tightened.

Downstream manufacturers relocated into China.

Illegal operators were closed.

The industry consolidated into the so-called “Big Six”.

At the same time, universities and specialised institutes embedded themselves within industrial clusters, training the next generation of engineers while solving plant-level problems.

China wasn’t simply building mines.

It was building institutions that accumulated industrial knowledge.

Act IV: Weaponisation

In 2010, export restrictions directed at Japan exposed just how dependent the rest of the world had become.

The strategy evolved.

Export controls expanded.

Technology restrictions emerged.

Security considerations entered industrial policy.

By the early 2020s, China controlled more than half of global rare earth mining and roughly 90% of separation and refining capacity, alongside dominant magnet manufacturing capabilities.

Today, Beijing protects more than physical production.

It protects accumulated know-how.

What China built wasn’t just an industry.

It was a learning system.

Ore bodies.

Pilot plants.

Industrial zones.

University departments.

National champions.

Government support.

And eventually, export controls designed to lock in the advantage.

What Making America Great Again Would Actually Require

If the United States wants resilient critical mineral supply chains, the challenge is not technological.

It is institutional.

First, financial capital is not industrial capability.

Financial capital is abstract, mobile and fast.

It moves through subsidies, bond markets and venture funds.

Industrial capability is concrete, place-bound and slow.

It is maintenance crews who understand a plant’s personality.

Suppliers who evolve alongside customers.

Operators who know how to respond when something goes wrong at three o’clock in the morning.

Finance can build facilities.

It cannot instantly create judgement.

Second, America must accept the tuition.

New mines and refineries will initially be inefficient.

Some products will fail qualification.

Plants will underperform.

China has repeatedly demonstrated its willingness to flood markets and destroy emerging competitors.

Staying the course means tolerating ugly spreadsheets and short-term disappointment.

Early inefficiency is not failure.

It is tuition.

Third, policymakers must build ecosystems rather than projects.

Clusters matter.

Mines, refineries, laboratories, logistics providers and component manufacturers need to exist within each other’s orbit.

Long-term offtake agreements matter.

Patient capital matters.

Stable demand matters.

Fourth, the workforce must be rebuilt.

Technicians.

Process engineers.

Metallurgists.

Materials scientists.

Apprenticeships.

Immigration policies that attract expertise.

Universities aligned with industrial priorities.

Finally, societies must reward making things again.

For decades, financial engineering generated greater prestige and compensation than process engineering.

Too many of the brightest graduates were incentivised to structure deals rather than debug factories.

If industrial renewal is genuinely the objective, the people capable of building it must once again find status, purpose and prosperity in making things.

The Tesla Lesson

Elon Musk understood this instinctively.

Tesla’s advantage was never a single patented technology.

It was a culture of relentless iteration.

Batteries.

Manufacturing.

Software.

Supply chains.

All evolving together through continuous learning.

China effectively did something similar at national scale for rare earths.

Japan is doing it in carefully selected niches.

America is only beginning to rediscover that industrial ecosystems are built over time.

They cannot simply be purchased.

Conclusion

Rare earths teach an uncomfortable lesson.

Mines can be financed.

Technologies can be licensed.

Policies can be written.

But industrial capability cannot be summoned into existence by executive order.

It is built through years of experimentation, accumulated judgement and thousands of small problems solved by people learning together.

The countries that dominate the next industrial era will not necessarily be those with the best ideas.

They will be those willing to endure the messy, inefficient and often frustrating process of learning how to make things again.

The energy transition is often framed as a race for new technologies.

Increasingly, it looks like a race to rebuild industrial memory.

Roughly half of the world’s food production exists because of synthetic fertilisers.

Without nitrogen, phosphate and potash fertilisers, in careful balance, global agricultural yields would collapse. Modern civilisation feeds eight billion people not simply because we have fertile soils and favourable weather, but because we industrialised plant nutrition.

That is why I find the current discussion around fertiliser supply surprisingly complacent.

Because from where I sit, the mathematics simply do not add up.

The World Has A Fertiliser Problem

Today, an estimated 40-50% of global seaborne sulfur and ammonia supply moves through the Gulf region.

These are not niche commodities.

Sulfur is essential for producing phosphate fertilisers. Ammonia is the foundation of nitrogen fertilisers. Together they sit at the heart of modern food production.

The timing could hardly be worse.

The Northern Hemisphere’s critical fertiliser application season largely runs between February and May, supporting harvests from August through October. In the Southern Hemisphere, major application windows generally occur between April and August ahead of harvests later in the year.

Disruptions do not require every shipment to stop. Even partial interruptions, delays, insurance costs, or export restrictions can ripple through a system built around precise seasonal delivery.

If significant volumes of fertiliser fail to arrive during these windows, the lost application cannot simply be recovered later. Crops grow according to biological calendars, not shipping schedules.

The result is likely to be a combination of shortages and sharply higher prices.

For wealthier agricultural producers this may mean reduced application rates.

For poorer nations it may mean no application at all.

We Have Models For Small Fertiliser Cuts

The problem is that most agricultural modelling examines relatively modest reductions in fertiliser use based on price inflation from relatively minor 5-10% reductions in supply. The full range of price elasticity based on significant curtailments of global supplies has never been modelled, because it has never happened before. Importantly, these studies generally examine demand responses to higher prices and relatively modest reductions in nutrient application. They are not stress tests of simultaneous disruptions affecting multiple fertiliser components across large parts of the world.

In terms of the effect on yields that we do know, a European modelling study found:

• A 5% reduction in nitrogen application reduced yields by roughly 2.1%

• A 15% reduction reduced yields by approximately 6.4%

• A 25% reduction reduced yields by roughly 11.2%

Those findings make intuitive sense. Less nitrogen generally means lower yields.

The problem is that few models have explored what happens when disruptions become substantially larger, particularly across multiple nutrients simultaneously.

Phosphorus shortages are often even more complicated.

Nitrogen reductions tend to produce immediate yield impacts. Phosphorus deficiencies can take longer to manifest and tend to produce a smaller reduction in yields, unless the reduction is in already phosphorus-poor soils, the consequences can be severe and immediate. Research suggests that failure to apply phosphorus in nutrient-constrained systems can reduce yields by approximately 10-20%, with even larger losses possible in chronically deficient soils.

In other words, we have reasonable estimates for moderate fertiliser reductions, in the order of 5-15%.

We have far less understanding of what happens when fertiliser availability becomes genuinely constrained across large regions of the world.

Now Add El Niño

El Niño is a naturally occurring climate pattern that effectively redistributes weather across the planet. It tends to make some agricultural regions hotter and drier, others wetter and flood-prone, and can significantly affect crop yields, food production, energy demand, and commodity markets worldwide.

El Niño typically occurs every 2 to 7 years, although the timing is irregular. Most events last 9–12 months, while particularly strong events can persist for 18 months or longer.

If fertiliser disruption were the only risk factor, the situation would already deserve attention.

Unfortunately, it is not.

Climate forecasters (NOAA and ENSO) currently place a high probability on El Niño conditions emerging during the second half of 2026 and persisting into 2027.

Historically, El Niño years have reduced global average crop yields by approximately 1-4%, depending on the crop and the strength of the event.

At first glance, those numbers may not sound alarming.

But averages hide a great deal.

A strong El Niño does not affect the world evenly.

Some regions experience relatively little impact. Others experience severe drought, flooding, heat stress or wildfire risk.

Drier conditions often emerge across parts of Southeast Asia, India, Central America, northern Brazil and sections of Africa.

At the same time, excessive rainfall and flooding risks can increase in parts of South America, East Africa and other agricultural regions.

What matters is not the global average.

What matters is what happens in individual breadbaskets.

And increasingly, forecasters are discussing the possibility that this could become a strong El Niño event, with a non-trivial chance of reaching “super El Niño” status.

That outcome is far from certain.

But it is no longer something that can simply be dismissed.

How Fertiliser And Weather Interact

The most important point is that fertiliser shortages and weather shocks are not independent risks.

They reinforce one another.

A well-fertilised crop has greater resilience to environmental stress.

A nutrient-deficient crop enters periods of drought, heat stress or excessive rainfall with significantly less physiological margin for error.

That means the effects become multiplicative rather than additive.

A crop already weakened by reduced nitrogen and phosphorus application is more vulnerable to whatever weather conditions arrive later.

The agricultural system loses resilience precisely when it needs it most.

One Small Bright Spot

Interestingly, soybeans often perform relatively well during El Niño years compared with many other major crops.

That does not eliminate broader food system risks, but it does provide a reminder that agricultural impacts are rarely uniform.

Some crops and some regions may benefit even as others suffer.

The challenge is that global food systems depend upon the aggregate result.

The Modern Food Equation

Perhaps I am missing something.

If so, I would genuinely welcome correction from agronomists, farmers and fertiliser specialists who understand these systems better than I do.

But from where I sit, the numbers deserve more scrutiny than they are receiving.

Natural Productivity of Arable Land
+
Synthetic Fertilisers
+
Modern Seed Genetics
+
Mechanisation
+
Reliable Climate Patterns
+
Functioning Global Supply Chains
=
Food for Eight Billion People

Now lets modify

Minus 40-50% of N and P

Add El Nino

Minus functioning global supply chains

Add higher fertiliser costs

Add higher fuel costs for tractors trucks and ships that keep the entire global food supply moving.

One of the objections to this argument is that the maths is not exact. Critics will point out that fertiliser markets adjust, that farmers substitute nutrients, and that weather shocks are unevenly distributed. All of this is true.

But modern agriculture is not a system built with enormous spare capacity. Roughly half of global food production depends on synthetic fertilisers. The same handful of nutrients must arrive in the right place, at the right time, every growing season. Add a major disruption to sulfur and ammonia flows, constraints on potash availability, and a forecast El Niño-related reduction in yields, and the burden of proof should shift. The question is no longer whether each individual shock can be explained away in isolation. It is whether a food system designed to operate with minimal slack can absorb all of them simultaneously.

The maths may not be exact. But neither is the assumption that food inflation is the only outcome.

None of this guarantees a food crisis.

But it does suggest that the agricultural system is entering 2026-27 with multiple risks aligned simultaneously.

But when I look at the mathematics of fertiliser dependency, nutrient constraints and weather risk, I struggle to reconcile them with the relative lack of concern for anything other than food price inflation.

We will begin finding out the answer when the first major harvests start coming in during August and September.

By then, the decisions that matter will already have been made.