Can Trump's critical minerals drive pass the copper test?: Andy Home

Zawya

27-03-2025

LONDON - U.S. President Donald Trump's executive order on boosting domestic minerals production is intended to blast a path through the thicket of mine permitting in the United States.
It takes an average of nearly 29 years for a new mine to go from discovery to production in the United States, the second-longest lead time in the world after Zambia, according to S&P Global.
Permitting on Federal Land in particular is a big problem and one that the U.S. government is uniquely qualified to solve.
The Joe Biden administration struggled to reconcile its ambition to produce more "green" metals for the energy transition with its environmental and social credentials.
Trump has no such qualms.
The Secretary of the Interior is instructed to "prioritize mineral production activities over other types of activities on Federal lands".
But there is a danger that the political pendulum will swing too far the other way. There is also the problem that new mines still take many years to build and the U.S. lacks the processing capacity to convert raw materials to metal.
Copper is a case in point.
STALLED COPPER PROJECTS
Copper is not on the U.S. critical minerals list but gets a special mention in Trump's executive order, along with gold, uranium, potash and, if the chair of the National Energy Dominance Council so determines, any other element "such as coal".
Copper has come to epitomise the problem of getting new mines up and running in the United States.
Big copper projects such as Resolution in Arizona, Pebble in Alaska and Twin Metals in Minnesota have been stalled for years at the federal permitting stage.
All three could benefit from the change of political wind in Washington.
But opposition from Native Americans and environmental protection groups is not going to magically disappear at the stroke of a presidential pen. Indeed, it might well become more entrenched.
Big mining companies such as Rio Tinto, which owns a majority stake in Resolution, have learnt the hard way that mining without community consent is highly problematic.
The company has buy-in from both Serbian and European Union policy-makers for its giant Jadar lithium mine but progress has ground to a halt due to mass protests.
EXTENDED TIME-LINE
The Resolution mine has the potential to become the biggest copper producer in North America, capable of meeting up to 25% of the United States' annual copper demand.
The copper will come with by-products such as bismuth, indium and tellurium, all of which are on the critical minerals list.
But even assuming accelerated permitting, the mine will still take around 10 years to construct, meaning the first copper concentrates would be produced only around the middle of the next decade.
Resolution is located in Arizona, which has a long history of mining and associated infrastructure.
The Pebble and Twin Metals projects face extra challenges in the form of physical remoteness and potential impact on salmon spawning grounds and the Boundary Waters Wilderness respectively.
Fast-tracking permitting for such projects doesn't mean they'll be ready to generate copper any time soon.
PROCESSING GAP
Rio's Resolution mine could be integrated into the company's existing Kennecott smelting and refining operations in Utah.
Kennecott, however, is only one of two active primary copper smelters in the United States. The other one is Miami in Arizona operated by Freeport-McMoRan. There has been speculation but so far no confirmation that Grupo Mexico might re-open its Hayden smelter in the same state.
The United States is already a net exporter of copper concentrates for want of sufficient processing capacity. Some 320,000 tons of contained metal in concentrates were shipped overseas last year, according to the U.S. Geological Survey.
The three main destinations were Mexico, China and Canada. Clearly there is enough North American smelting capacity to absorb extra U.S. mine production but the Biden administration's policy of "friend-shoring" has been replaced with Trump's tariff threats against the United States' two neighbours.
Moreover, every copper smelter is currently competing with China, where smelting and refining capacity is huge and still growing.
Smelter margins are being squeezed in the form of historically low treatment charges for converting raw material into metal at historic lows.
Building sufficient domestic capacity to process extra U.S. mine production could be a thornier problem than building the new mines in the first place.
URBAN SOLUTION
The fixation on headline-grabbing mega mine projects to reduce U.S. import dependency misses a far easier and lower-cost solution.
U.S. processing capacity for recycling copper is growing.
Germany's Aurubis AG has invested $800 million in a new smelter in Georgia for treating up to 180,000 metric tons of complex recyclables such as circuit-boards.
The United States is the world's largest exporter of copper scrap to the tune of almost a million tons each year. Much of it is sent to China for processing.
Recycling all that lost metal at domestic facilities wouldn't eliminate U.S. copper import dependency but it would significantly close the gap.
Recycling comes with the benefits of an existing resource, low capital expenditure relative to new mines, shorter lead-times to production and lower carbon footprint.
The Trump administration's rush to ditch anything associated with Biden's green agenda risks overlooking the one part of the domestic copper supply chain that is already attracting investment and increasing capacity.
If "mine baby mine" is the mantra, channelling more federal funds into "urban mining" is going to reap faster rewards than any big new conventional mine.
The opinions expressed here are those of the author, a columnist for Reuters (Editing by David Evans)