The unexpected knock-on effect of Trump’s minerals deal

Donald Trump’s return to the White House is “a major setback for global climate action”. So said that Christiana Figuresh said after being elected in November, the former Climate head of the United Nations.

Whatever is considered to be an important global climate agreement as the most important global climate agreement of the Paris Climate Agreement has been withdrawn to the US since assuming office. He allegedly prevented American scientists from participating in international climate research and removed the national electric vehicle goals.

In addition, he achieved his predecessor efforts to develop new green technology “Green New Scam”.

And yet despite his history on the climate issue, Trump has been eager to make a deal with the Ukrainian President on important minerals. He has also taken a strong interest in Greenland and Canada – both nations are rich in important minerals.

Ever since he took over, the purchase of important minerals for Trump has been a major focus for Trump. These minerals are important in industries including aerospace and defense, but appreciating, they also have another major use – to manufacture green technology.

So, can Trump’s focus on obtaining these minerals can be a knock-on effect and can help unlock the US capacity in the green technology sector?

Trump’s right -handed men understand the most importance of important minerals in green transition. Space X and Tesla – Companies lead the alone musk – graphite (in electric vehicles), lithium (in batteries) and nickel (in rockets) greatly rely on important minerals.

Associate Professor of Mining Engineering at Colorado School of Mines. Elizabeth Holi states that each nation has its own list of important minerals, but they are usually made of rare earth and other metals such as lithium.

She says the demand is booming – in 2023, the demand for lithium increased by 30%. It is mostly induced by rapid growth in clean energy and electric vehicle sectors.

According to the International Energy Agency, within two decades they will demand about 90% of the demand for lithium, 70% of the demand for cobalt and 40% for the rare Earth.

With some of these minerals catching, such a musk worries that he tweeted three years ago: “The price of lithium has gone to crazy levels! Tesla may really have to enter mining and directly refine, until the cost improves.”

He wrote that there is no shortage of element, but the speed of extraction is slow.

In December 2023, a report published by the selection committee of an US government addressed the weakness of the US status in rare earth and important minerals (eg cobalt and nickel). It has been stated: “The United States should reconsider its policy approach to important minerals and rare earth elements supply chains because due to the risks given by our current dependence on the Republic of the people of China.”

Failure to do so, warned, “preventing defense production and preventing and chokeing the manufacture of other advanced technologies”.

China’s dominance in the market comes from the early recognition of economic opportunities that provide green technology.

The London School of Economics (LSE) Grand Research Institute says Bob Ward, Director of Policy on Climate Change and Environment, “China took a decision about 10 years ago, where the trend was going on and strategically stretched the development of electric vehicles not only for renewal but also dominated the market.”

Daisy Jennings-Gre, Price Reporting Agency Heads of Prices in Benchmark Mineral Intelligence states that they are important minerals as they are geologically restricted. “You cannot guarantee that you will have financially recovered reserves in every country.”

Some minerals such as lithium are abundant on Earth, but often they are located in difficulty in reaching places, so the logistics of the mining project can be very expensive. In other cases, there is dependence on a country that produces a large part of the global supply – such as cobalt from the Democratic Republic of Congo. This means that if there is a natural disaster or political unrest then it has an effect on the value, Ms. Jennings-Gre.

China has managed to increase supply by investing heavily in Africa and South America, but where there is actually a stronghold on the market, is in processing (or separation of minerals from other elements in the rock).

Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies at Washington, DC, says, “China is 60 percent of the global rare earth production, but processes about 90 percent – (IT) is prominent at this level.”

She says that the country understands how important it is in economic trade – a few days after Trump introduced the tariff on China, its government returned to control over 20 important minerals, including graphite and tungsten.

There is a fear of being in a disadvantage to inspire Trump, the argument of Christopher Nital, Professor of Applied Economics at Massachusetts Institute of Technology (MIT).

“I think what is going on because China is the leading player of the processing side,” he says. “This is that the processing phase, which is the high margin phase of the business, so China is earning a lot of money.”

As he says, it is a “happy coincidence” that it can support green technology.

However, the important question is whether it is too late for America to completely capitalize on the region?

According to the Bob Ward of LSE, in the early days, green transition was “implicated as a burden” for countries.

The Biden administration was highly supported by green technology industries through the introduction of inflation reduction (IRA) in August 2022, which provides tax credit, loans and other incentives to technologies that reduce greenhouse gas emissions, from battery technologies to electric vehicles to solar panels.

According to the Think Tank Clean Investment Monitor, an $ 493BN (£ 382BN) investment was estimated in the US Green Industry by August 2024.

Ms. Gray from benchmark intelligence says that there was still little work to support upstream processes such as obtaining important minerals. Instead, the biden administration focused a lot on downstream manufacturing – the process of obtaining products from manufacturer to final consumer.

But Trump’s recent steps to buy these important minerals show that the upstream process can be focused on.

“IRA put a lot of laws in places to limit trade and supply only from friendly countries.

“Trump tact is changing and looking at the agreements of important minerals that are some outstanding for the US.”

Can move further by coming down the line from Trump. Those working in the sector say that whispering in the White House corridors suggests that they may be “important mineral executive orders”, who may invest further in this purpose.

Accurate details involved in the executive order are unclear, but experts in the issue have said that it may include measures to accelerate mining in the US, including rapid tracking permits and investment for the construction of processing plants.

Although work can now be done to secure these minerals, Professor Willy Shih, a Harvard Business School, feels that the US administration lacks an understanding of the technical complexity of the establishment of mineral supply chains, and emphasizes the commitment of the required time. “If you want to create a new mine and processing facility then you may take 10 years.”

As a policy of his predecessor and one which is clearly climate-supportive action, Trump has opposed to maintaining Ira. But its success in the Red States means that many Republican senators are trying to celebrate them in their proposed “large, beautiful bills” – plans to stack all the main policy goals of Trump in a mega -bail – due to appearing at the end of this month.

In the last 18 months, the Republican-Ageonous states analyzed by the Clean Investment Monitor Show received 77% investment.

Dr. of MIT NITAL says for states such as Georgia, which is now known as “battery belt”, which is known after the bounce in battery production after IRA support, these tax credit are important for these industries to survive.

He says that failure to do so is a real political threat to American representatives who are ready for re -election in less than two years.

If Trump loses just one seat for the democrats in the middle -term of 2026, he loses the majority of the House – limiting its ability to pass the major pieces of law.

Carl Fleming was a advisor to former President Biden’s renewable energy and energy efficiency advisory committee and is a partner in the law firm McDermot, Will and Emery recommend customers at Clean Tech and Energy Space. He says that investors remain confident despite uncertainty. “My practice in last month has been more busy than ever, and it has been since being quadrupled after IRA last year.”

He also believes that the need to maintain some parts of IRA is recognized – although it may occur with some fossil fuel expansion. “If you are really trying to be America first and energy safe, then you want to pull all your liver. Keep solar and continue battery storage and add more natural gas to release America’s energy skills.”

LSE’s Bob Ward says the uncertainty of American status is rarely comfortable for its absence on the International Climate Forum. “When on the US ball, it helps people move in the right direction and similarly we got the Paris Climate Agreement.”

Trump is definitely not an environmentalist for those in climate space. It is clear that he is not worried about making his legacy environmental, but an economic one – although he can achieve the former if he may be convinced that it will promote the economy.

Top Picture Credit: Getty Images

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