Can you start with an introduction and a bit about your experience in the industry?
I’ve been in the industry for about 20 years, looking at the macroeconomic and geopolitics side of energy and mining as part of my work on emerging economies, on macro and geopolitical risks of the energy sector, and also on commodity markets. So that means a lot of time looking at the ways in which governments are trying to reshape markets, either to restrict access to certain commodities or to try to build new supply chains. So, it’s been a busy and interesting time with lots of new tools in the toolkit and lots of ways in which I think investors are struggling to adjust and take advantage of this new reality.
Your work is focused on this intersection of politics, economics, and energy. Can we look at some of the biggest trends you see happening globally with regards to both the mining and energy industries?
The big thing I’m watching is how the US and other countries are navigating China’s key role in mining. In the energy space, oil and gas, it’s a different story. But if we think about lithium and the other battery metals, or if we think about the rare earths used in the defence industrial base, this is really a story where the raw materials may be scattered around the world, but China controls the processing capabilities. We are seeing a dynamic where there is both a willingness from China to weaponize these supply chains and then real fits and starts from the US and countries around Europe to try to develop new supply chains. There’s a recognition of how important these metal and mineral supply chains are all the way through to end users, but we have some inconsistencies there.
The other important trend is that a lot of countries that have the raw materials want to move up the value chain and get more value from processing. They don’t want to just be a place where the raw material is extracted, they want to build out processing and manufacturing. That’s a natural thing that economists would have recommended to them.
So, I think two things are happening at the same time, which is this demand for technology transfer and building out these supply chains, but also a recognition from the US, Europe, and other countries that they would also like to bring this production back home. This is a dynamic where there’s a lot of scope for government involvement, but at the same time there’s a challenge in attracting persistent capital. So, there’s the inherent need to build up the supply chain, but it’s a little more difficult to actually do it in practice.
We see new regulations coming out of the US as well as a big drive across places like Africa to build full metals value chains. What are some of the global impacts that you see coming out of these regionalized supply chains and do you think this will create bottlenecks in metals supply? How do we mitigate those impacts?
We’re in a space, particularly with commodities like lithium, where there is a supply demand mismatch. That’s a current challenge to understanding what future demand might look like as we know that in mining these things work in long cycles. Decisions to build a mine and start processing take years, not months. In countries like Canada and the United States, the average time of bringing a mine to fruition tends to be around a decade. It really depends on the mineral and the mineral supply chain, but that’s an issue. All of this is happening while we have more creative trade tools being used. As we speak, there is constant news about trade tariffs and rules. Historically, a lot of mining and processed commodities were not subject to extensive tariffs. But we now live in a reality where they are part of trade taxes.
In Africa, there are a lot of players vying to build out technology and infrastructure along the Lobito corridor, for example. We’re seeing both China and the US courting the DRC.
At this point, this regionalization trend has been focused on the two ends of the mining supply chains, one on the mining side and getting access to the raw materials and the other on trying to develop and build out battery manufacturing or the end user point. That middle point, which has to be tailored to what the end users need, is where the gaps are outside of China.
The other thing I’ll be watching on a regionalization perspective, both in the Middle East and Africa, is what happens on the recycling side. We’ve seen China become an active player in recycling critical minerals. We see African countries, like Nigeria, being a hub for recycling of base metals, etc. And so the question is whether that can be that can be levered in that way.
The intention is there in terms of regionalizing supply chains in the Middle East and Africa. The UAE has been an active investor first on the mining side and now on the processing side. And then in Asia, we’ve seen more development and regionalization, but that’s where Chinese firms have probably been in the lead.
We’re seeing this growing cohort of investors coming out of the Middle East who are looking to get into the metals and mining industry and diversify away from oil and gas. Do you see this as a growing trend? Where do you see these investors placing their money right now?
This is definitely a key area of focus. I think in Saudi Arabia’s context, it’s more about diversifying domestic production. You have Ma’aden looking at investments and partnerships abroad, but their focus is much more domestic. So, if they’re investing abroad, they’re looking for techniques, they’re looking for technology transfer, but the goal seems to be to discover whether the geological resources in Saudi Arabia could allow them to be a more general commodity superpower. They also have an interest in building out their electric vehicle supply chains. This is a domestic economic growth story, and it mirrors what groups like Saudi Arabia’s Sovereign Wealth Fund, Public Investment Fund, is involved with in other sectors. They are using the capital, using the assets on the balance sheet, leveraging them, and trying to develop. So, that’s something where there’s clearly interest, but remains to be seen how economic some of those projects are.
The UAE has strong government linked investors and investment bodies that are tied to the royal family. They have funds whose goals are linked to public wealth and those belonging to those who rule. We’ve also seen private investors interested in metals and mining, especially in Africa. And that mirrors what we’re seeing in some of the countries where the UAE was signing trade and investment partnership agreements, where there were close state-to-state links. More recently, we’ve seen them moving more into processing opportunities rather than just buying into mines that are looking for new investments.
Another thing that I see are plans and potential joint ventures with the US. We’ve seen investments that Emirates Global Aluminium (EGA) has been making in in Oklahoma, looking on the critical mineral and processing side. This ties in with Oklahoma trying to become a critical mineral player, not just an oil and gas player.
There was also an agreement signed during President Trump’s recent visit to the region to develop supply chains for some of the critical minerals that China’s been restricting. We’re still at the idea phase here and we’ll see how that goes, but the intention and interest is there.
From the Washington perspective, I know there’s been a lot of hope that these GCC investors could be actors that the US government and US industry could partner with. In Africa, I think there’s still some tensions there, including the fact that from the UAE perspective, they’re less concerned about Chinese dominance than the US is. The US even has some choices about which parts of the supply chain can be built in different areas. So, this is definitely a growing area and I would see it as part of not just diversifying from energy, but within energy.
At the same time, I think we see companies like ADNOC investing in natural gas, of which they’re not a major producer abroad. So, it’s partly about building out a vertically integrated supply chain and trying to look at what are going to be the energy commodities of the future and positioning themselves well.
And especially for the populous countries in the region, this push for job creation and quality jobs is very much key and it also ties into the interest in AI and the power sources and power storage needs that are embedded in most goals now. We might get more and more efficient in how data centres work over time, but for now these are very power intensive storage facilities. So, there’s a lot of critical minerals needed for battery storage facilities that are important parts of an energy mix.
It does really seem like a lot of the focus is really on future proofing companies in the industry and kind of future energy overall?
I think that’s right. I’ve been tracking the Middle East from a macroeconomic perspective for quite a while now. And for most of that time there’s been a lot of talk about diversifying from oil and gas. This is still very much a focus, and some countries are further along than others. But the thing that I hear more and more when I’m in Dubai, Abu Dhabi, Doha, or elsewhere is not just a diversifying into jobs that are currently active, but trying to future proof, look for the opportunities that are going to be coming down the pipeline in ways that we might not know yet. But that’s where technology literacy and other dynamics are important.
Some of it is also a quality of jobs point. In countries in the region where the per capita income tends to be higher than in a number of developing African or Asian economies, low value-add manufacturing is not the core goal because it would be very hard to compete on price.
Overall, I think in the region we’re also seeing this interest that we see elsewhere using technology to better assess old geological information, and globally, we’re trying to use and leverage brownfield sites and to sort of get more using technology to extract better.
Can we close this off by looking at some of the key trends that you foresee arising in the coming years? What should we be on the lookout for?
I think we should be on the lookout for new joint investment structures. I’m particularly watching to see what opportunities might come out of the G7 action plan on critical minerals, including the development of more standards-based financial markets for critical minerals. This could be beneficial across the industry as new financial liquidity financial markets for trading and hedging are developed, as producers might be trying to hedge their offtake exposure.
I’m also interested in new partnerships that we’re seeing planning for joint stockpiling and other dynamics. Now stockpiling alone might solve problems for the for the short term if you have the right metals and the right components on hand, but it would be more beneficial if there is a consistent commitment to building out and supporting these new long-term supply chains. The challenge is that production cycles are often longer than political cycles. So, one of the benefits that some investors might look for when they’re looking for partnerships would be to say that some of the countries in the Middle East with somewhat longer planning cycles and less of the short-term political cycles might be more committed for the longer term. That is still an open question given that these countries also need to show financial and economic returns. So that’s something I’d be watching.
The other one will be to see where the US government lands on both the incentive and the tariff obstacle side of the critical mineral sectoral tariffs and similar spaces there that could create some opportunities for foreign investors in the United States.
The implementation of that will be complicated by how these investors are linked to China, so there may be distortions in the market but also opportunities that come from that.
