The US administration is reportedly pondering to take equity stakes in Australia’s largest miners according to a report in efforts to minimize the influence of its most prominent rival, China, and remain competitive in the race for global superiority.
Washington noted that the move aims to create alternative supply chains, after China, the top producer of critical minerals, restricted exports of rare earths and permanent magnets in response to U.S. tariffs, but analysts question whether these are retaliatory measures on China’s retaliation and are rather convinced that the US is simply playing catch-up on the Chinese, who have incrementally solidified their supply chain relationships with other nations over the past decade.
The recognition of how important critical minerals, such as cobalt, lithium and rare earths are for, not only the sustenance, but also the expansion of technological advancements on the clean energy, semiconductors and defence sectors in the foreseeable future, has dawned on the US and now serves as their wake-up call, but also a call to action.
Nevertheless, the initiative by the US administration aims to provide packages (debt financing, equity models, and offtake agreements) designed to supercharge and fast-track the completion of the project by 2027, with US companies being expected to establish controlling interests in the Australian mines to protect US national security and interests, in compliance with existing US regulations.
At the end of the day, the move is also seen as another strategic move of the US to broaden its geopolitical influence and economic efforts by strengthening ties of the so-called AUKUS defence alliance and restore trust, whereas deleverage and intercept at the same time the growing dominance of China.
Technical Analysis
Copper Chart – Copper futures recapture half of last month’s tarnish losses as market participants weigh supply concerns
Resistance: 5.00 (R1), 5.20 (R2), 5.40 (R3)
Support: 4.75 (S1), 4.60 (S2), 4.40 (S3)
