Geopolitics add to metal market insecurities
- 27 November 2025
A London law firm asked us at the start of the year to consider the global mining and metals business in 2025 as a chess game with fast-changing rules and it’s fair to say the game has only become more chaotic as the year has unfolded. Former US assistant secretary of state for energy resources Geoffrey Pyatt will be one prominent observer asked to weigh upcoming moves at this week’s Resourcing Tomorrow 2025.
He said pre-event, “geopolitics is now a core part of how the mining industry must plan, invest and operate”.
The recasting of many minerals as “strategic assets” rather than “just commodities” – with said assets the focus of almost continuous attention now in Washington and other world centres of power – was “something new for all of us”.
Though not so new for China, which has built strategic positions in key mineral-based supply chains over the past three or four decades.
Pyatt, who became US-based McLarty Associates’ senior managing director Energy & Critical Minerals earlier this year, joined SAFE Centre for Critical Minerals Strategy executive director Abigail Hunter and deputy director of the European Institute for Energy Security, Isabelle Dupraz, on a Resourcing Tomorrow preview call.
All three are participating in key conference sessions and Pyatt will talk specifically about “Geopolitics, Fragmentation and the Future of Global Mining” with Washington-based Centre for Strategic and International Studies (CSIS) director, Dr Gracelin Baskaran, Vale chief sustainability officer Emily Olson and Greenland government adviser, Thomas Lauridsen.
The pre-event call involving Pyatt, Hunter and Dupraz heard significant acceleration of US efforts, in particular, to address vulnerabilities in its supply chains under the Trump administration had ratcheted up the rate at which new government policies and measures were being broadcast and authorised, which looked like bringing some strategic mineral and metal supply on-line sooner than it otherwise would be available.
The webcast heard China’s increasing dominance of global metal refining and value chains over several decades had brought a “really tectonic change in the marketplace”. Pyatt said it was the same marketplace “that historically viewed China's products as so cheap and so easily available that it made no sense to invest in alternative supply chains”.
“We all got ourselves in a collective situation where we were almost completely dependent on Chinese extraction and Chinese processing of certain products,” he said.
Apart from China’s aggressive efforts to leverage this market ascendancy through export restrictions, raising red flags for dependent essential industries in the US and elsewhere, the dominant supply lines were also no longer seen as environmentally or socially acceptable. The world wanted “ESG” friendly or compliant new supply of so-called critical metals and materials, the webcast heard.
Or did it?
“It’s challenging because we don’t necessarily reward good behaviour in the current minerals regime,” SAFE’s Hunter said.
“A good example is the comparison of nickel mining in Indonesia and Australia. That shows weak enforcement of environmental standards can give one country an advantage over another despite having similar or even in some cases superior mineral reserves.
“Some miners in Indonesia produce nickel at lower cost by cheaply and illegally dumping their tailings into the ocean ... versus in Australia [where] tailings are dealt with on land at a higher cost.
“Ultimately that higher cost isn’t priced in and you have about half the world’s nickel coming from Indonesia while Australia had to shutter Nickel West’s operations due to oversupply from Indonesia for nickel.
“I raise this point because we’re all contemplating how we can do a better job sourcing for security but we don’t necessarily take into consideration where we’re getting our minerals today.”
White & Case partners Rebecca Campbell, John Tivey and Gary Felthun wrote saliently at the start of this year about decarbonisation and ESG slipping down the priority lists of miners and their investors and being replaced with “much thornier questions” about how to effectively operate in markets experiencing sustained gluts and invest in business regeneration.
Chinese sponsors and partners were meanwhile sustaining supply-side investments into mines, smelting, refining and manufacturing, aided by China’s dominant share of end-demand, while Western competitors faced major hurdles executing large investments without trade protections and support measures protecting returns.
“The lower-price environment impedes attracting non-specialist institutional capital to the sector. Returns are increasingly dictated by politics and policy,” Campbell, Tivey and Felthun wrote.
Hunter warned again ahead of Resourcing Tomorrow about the increasing risk of bringing an “incredible amount of new supply online, saturating an already saturated market, without people buying those materials or ... [producing] the quality spec we need for our advanced manufacturing-based economies”.
This could result from poor alignment of policy initiatives, demand and supply responses.
Hunter and Pyatt said they liked the recently announced US government backing of Alcoa’s plans to produce gallium from alumina waste in Western Australia, a proposal that also has support from a Japanese public-private partnership, Japan Australia Gallium Associates, pairing Japan’s government and Sojitz Corporation. Alcoa had the gallium, Japan was already refining the product, and the US had a need and the money.
“It only works when the three governments are working together – Japan, Australia and the United States,” said Pyatt.
Hunter said offtake was key. “Cracking the nuts sooner rather than later requires all of those diverse stakeholders to come together quickly, share the risk, win together, lose together, so that we can ultimately get secure access to supply in a much shorter time horizon,” she said.
Gallium, naturally present in bauxite used to make alumina, is a mineral essential to the semiconductor industry and defence sector.
Alcoa is working with the Western Australian government, not the Australian government, to progress the project under a state agreement and approvals framework. It hopes to make a final investment decision and progress to production next year.
China produces and refines about 600 tonnes of gallium per annum – 98% of the world market – worth less than US$1 billion a year at the moment. Alcoa wants to produce 100 tonnes a year in WA. The US currently uses about 20tpa.
Alcoa has shut down some of its long-standing alumina production in WA and is facing cost pressures elsewhere. Australia’s alumina export earnings declined by A$500 million between 2022 and 2024 and they face ongoing pressure from rising Indonesian production fuelled by Chinese investment.
The total value of Australian bauxite, alumina and aluminium exports could decline from circa-A$20 billion this year to $19 billion in fiscal 2027, according to S&P Global.
An analyst with the research firm, April Kaye Soriano, said recently: “The anticipated increase in supply from Indonesia will exert considerable pressure not only on Australian producers but also on the global market. This trend is a crucial factor in our projections of a rising surplus in the near to medium term, which will likely weigh on prices.”
Cheaper metals? Secure supplies? Check.
