Accelerationist Click-Bait Title | Bear Brief 11FEB26
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BEAR INDEPENDENT
BRIEF
Date: 11FEB26
Analyst: Dance Monkey #3
Distribution: unlimited
Attribution: Bear Independent
Washington just hosted fifty-five countries to discuss breaking China's stranglehold on materials crucial for everything from smartphones to weapons systems. In Vice President Vance’s words, "We want to eliminate that problem of people flooding into our markets with cheap critical minerals to undercut our domestic manufacturers." The plan? Something called FORGE—Forum on Resource Geostrategic Engagement—which Vance describes as "a preferential trade zone for critical minerals protected from external disruptions through enforceable price floors." Thomas Scurfield from NRGI recently said, "We're already seeing US engagement reshape mineral flows out of Africa," but added that "it remains to be seen whether it can compete with China's scale and speed." Unsurprisingly, to keep mineral prices from dropping too low, the administration is willing to use tariffs.
Last year, Beijing demonstrated exactly how much leverage it has when it rattled markets by withholding rare earths, leading to production delays and shutdowns at auto manufacturers in Europe and the US. The response was Project Vault, a strategic stockpile backed by ten billion from the Export-Import Bank and two billion in private funding. The administration announced over thirty billion in direct funding commitments for critical minerals in six months, with the government taking equity stakes in private companies. Vincent Rouget from Control Risks calls it "deploying financial firepower rather than industrial presence." The US is using offtake deals, where rights to a mine's output are secured in exchange for financing, instead of putting American operators in high-risk countries. This method basically amounts to state capitalism, leaving the taxpayer on the hook if these investments go south.
The Democratic Republic of Congo is ground zero. Seventy percent of global cobalt comes from there, plus 3.3 million metric tons of copper in 2024. China already controlled almost fifty percent of DRC cobalt production by 2021, with eight of the fourteen largest miners described as Chinese-owned. But Gécamines, the Congolese state miner, is preparing to ship around 100,000 tons of copper to US buyers this year after renegotiating marketing rights with China's CMOC.
Then there's the contrast in how companies operate. US-based KoBold Metals has staked over 3,000 square kilometers in the lithium and copper belt but won't advance projects entangled in disputes, stressing governance standards. Chinese operators have just proceeded on contested ground. At Manono, one of the world's largest undeveloped lithium deposits, KoBold says it won't move until ownership issues are resolved, even as Zijin advances infrastructure. In Guinea, the China-backed Winning Consortium Simandou pushed ahead with rail and port construction despite ownership disputes, effectively forcing Rio Tinto to fall in line.
Whether this FORGE strategy works also depends on allies staying committed. Fifty-five countries showed up to the Washington meeting, which suggests that for now, reducing dependence on China matters enough. The US, EU, and Japan announced they'd pursue measures including price supports, market standards, subsidies, and guaranteed purchases, while Argentina separately agreed on a framework to boost copper and lithium exports.
China's embassy in Washington offered the standard response about playing "an important and constructive role in keeping the global industrial and supply chains of critical minerals safe and stable." Of course, this is the same country that expanded export controls on rare earths, causing those production delays and shutdowns, and the same country that generated a lithium glut that stalled US expansion plans.
Ahead of the ongoing Indaba mining event in South Africa, Scott Kennedy from the Center for Strategic and International Studies said, "This is a recognition by the United States that it must act in concert with others to reduce its vulnerability in areas where China has supply dominance." The question isn't whether China controls critical minerals. It does. The question is whether throwing tens of billions of taxpayer dollars at the problem by taking equity stakes, guaranteeing prices, and building strategic reserves can actually change that.
Relevant Links
Fun tool (note aspects like “smelter” vs “mine production”):
apps.usgs.gov/critical-miner…
English
