Critical metals fight with China heats up

In the past week, China has once again decided to leverage its global influence on the rare earth space by outlining a lengthy set of regulations that aims to control more of its rare earth supply, how it’s mined, and who gets the valuable metals and chemicals that go into the production of everything from eclectic vehicles to missiles to satellites.

Reuters reported that the regulations, issued by the State Council or cabinet this past Saturday, say that rare earth resources belong to the state and that the government will oversee the development of the industry around rare earths — a group of 17 minerals that China, in recent years, has become the world's dominant producer accounting for nearly 90% of global refined output.

I’m sure it’ll all be okay! 

Joking aside, China has every right to flex its critical metals muscle as it has adopted and executed its vision of being the dominant force in the space while the West has been busy doing what the West has done for decades — kicking the problem down the road.

Debt, infrastructure, privacy, education. By every one of those metrics, we are materially worse than we were decades ago. 

With all that being said, I believe we are still the cleanest dirty shirt in the laundry basket but it’ll take innovation, unity, and discipline to work our way out of many of the self-inflicted problems we’ve gotten ourselves into.

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On the critical materials side, whether it's rare earths or lithium, we are finally starting to allocate real capital to real solutions to some of these issues.

In both the US and Canada, there is real quality work going into helping to alleviate some of these supply bottlenecks. It won’t be a quick solution but it will be one that, over time, can help establish independent critical metals supply chain solutions.

I just watched a presentation from Patriot Battery Metals (TSX: PMET) CEO Ken Brinsden who did an incredible job outlining the many challenges and opportunities in the lithium space and how Patriot plans to play a big part in those solutions.

Earlier-stage companies like Q2 Metals (TSX-V: QTWO) are doing excellent earlier-stage work in James Bay as highlighted by today’s news release on its flagship Cisco property.

We are going to need a lot more IRA (Inflation Reduction Act)-compliant lithium if we are to establish our own critical metals supply chain.

We did very well in the previous two lithium bull cycles… and we’re positioned perfectly to capture disproportionate gains once again.

Let’s get it! 

Gerardo Del Real

Gerardo Del Real
Editor, Daily Profit Cycle