Are we in a critical mineral bull market?

EPISODE 4. Anthony Milewski and Christian Purefoy talk through #gold #copper #nickel #silver #uranium and #rareearths to figure out of the long-term macro story holds up against all the current market volatility, tariffs and export controls.

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Transcript

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All right, ladies and gentlemen, welcome to Boom, Bust and BS with your, energy, critical minerals and geopolitical gurus, Anthony Milewski and Christian Purefoy Hey, Christian, how you doin’ bud I'm doing well. I'm doing well. Volatile times. Oh my gosh. We have tariffs. We don't have tariffs. We have tariffs. I think we got a 90 day reprieve now. It's, it's crazy. Yeah, there's still 10%. And China's got what is it now, 145%. What is it, 54% or 45%, it’s crazy. I mean, and it's going to have a huge impact on — well, we saw — it have a huge impact on the markets. Right. But, I think these commodity markets are really going to be whipped around by this. Yeah. So, you know, obviously word of warning to anyone watching this now, it could be out of date by the time, by lunchtime, it’ll probably be out of date, right. But what we wanted to do, I think, is go through some of the major minerals and just kind of figure out what's happening. You know, there's obviously a lot of volatility. And then does the long term macro trend hold. Yeah. Well I think you got to start with rare earths and minor metals. I mean people are calling them critical minerals. But unfortunately that banner has gotten so big that it kind of includes everything. So if we step back from that, you know, China came out with a list with, you know, 6 or 7 new commodities that they're, you know, putting tariffs on or blocking exports. And I think, you know, what's really interesting is we're going to call them rare earths and minor metals, but these tiny metals, like, no one's heard of, just the impact that we've seen. And look at, bismuth is the latest, right? It was $6 in January. It's like 50 now. Antimony has kind of been the story for a year now. So I think this war, as it escalates with China, they're quietly ratcheting up on these really specific subset of minerals that have a 96 to 99, percent refining global supply refinement in China. So they're controlled by China and properly controlled by China. And they're critical to every single part of your life. And it's the refining, as you said. You know, other places can mine them. But it's the refining. It's the processing that's China has really cornered and like and it's crazy people, people like Mountain Pass, which is a producing rare earth mine in America. Guess where they refine their stuff. Yeah. China. What do you think we're going to see okay, in rare earths. What are we going to see in that market? You know, I mean, there was the other, rare earths shock was it was Japan. I can’t remember the year, when China shut off rare earths supply and then Japan basically said were and then diverted to Australia. It takes obviously years to do all of this. But that began to ease up Chinese dominance. Are we're going to see something like that or I don't I you know, you know, the problem the problem is the amount of time it takes to make a mine build a mine, permit of mine, finance a mine, and, by the way, the refineries because they're very specialized. It's not like copper or nickel where, you know, there's a lot of choice out there really, in the scheme of things. And so I think what's going to happen is these prices are going to go up five, ten fold. But because there's such a small percentage of the price of a widget, like whatever, that whatever the widget is, it's using gallium or germanium, you know, you're not going to really notice. Oh well, my, my widget costs 25% more. Well, your widget is $1 million because it's, some supercomputer. Well guess what? Who cares, right? So I think you're going to see these prices inch up, and then there will be some moment if China really embargoes these things, really says we're not going to sell you germanium and gallium. They say that, you know, then what's going to happen is, kind of 12 to 18 months from now, we're not going to be talking about these things going up ten times. We're going to be talking about them going up 100,000 times, because it will be an issue of not being able to actually get the underlying commodity. And so that's the danger I don't see, you know, unlike copper, you know, where copper is the primary input into this thing. And it drives the price of the widget. Or a nickel can be driving the price of the widget. For rare earths and a lot of these minor metals, it just isn't the price driver, largely because it's such a small percentage of the overall widget. And I think, I think when the rubber hits the road is when the actual supply side is completely demolished and people just can't get it and they need it, you know, antimony is on fire retardant and so on, right? Yeah. And of course it's the military. The US military is going to is already pumping money and investment to try and get this supply side domestic. Yeah. And once the prices hit that kind of scale, then obviously mining, refining, I doubt that would be a problem that at those prices in the US. Let's pretend it's 14 months from now and you just simply can't find germanium. Well, like that's fine and it's fine and to say we're going to go build a mine, but okay, it's five years but we're going to build a refining operation. It's multiple years. So, you know, I think from the mines themselves, if we use antimony as a case, like, like there's plenty of antimony. Look at Perpetua Resources There's plenty of antimony out there. It really becomes a question then, of extracting that antimony from the concentrate or whatever it is exactly that you're doing and being able to process it into something that can be used. All right. The next big one, copper. That’s seen some spikes. Obviously, I think there's been a lot of expectations we're going to have I mean, what is it Trump put an executive order to have the Commerce, Commerce secretary look into tariffs, market dumping, all that kind of stuff. So there was a bit of a spike for that. And then in the last, I don't know, last week or something that's gone down, it's just going to put but it is still going up. If you look at the trend, copper still going up, you call me copper as a proxy for GDP growth. Right. And so if people think there's going to be a global recession, then copper, even though there is kind of a looming copper supply issue as well, you know. You had this huge wave of global investment in mining kind of leading up to the, you know, the industrialization of China, really. But now we are sitting here without having had meaningful investment in a lot of these commodities in a decade. or longer, and you are going to run into supply side issues with copper, I just don't know when. And I think that that volatility that you're seeing is really, it's a function of people's view on the global economy. And if they decide, if America decides, yes, we are going to put tariffs up, most likely due to the price. if you look at the US, we used to be one of the largest copper producers in the world. And by used to I mean, 100 years ago, there are copper projects that could be built. They take time, they take years. So, you know, I expect some more production to happen in the States, but copper, you know, but copper is different than where it's because there are plenty of copper mining. Copper comes out of the Congo, comes out of South America. You know, there's all these different places that copper comes from. So I think it's a different kind of problem than the rare earth problem and the minor metal problem. It's more a function of under underinvestment into supply. And when does that hit? I think that so I think there's separate problems, even though all these problems are kind of getting rolled into like single talking points. Right. All right. One that is not, following the same trend. Okay. It's got a big macro story. Uranium. We got massive rollout, historic rollout, really, of, nuclear power stations. Nuclear power is going to reach record levels. Nuclear power production rates are going to reach record levels in 2025. And yet uranium basically has just not stopped falling. Yeah. I mean, look, uranium had a really great kind of 18 month run. It's sort of taken a little bit of a breather here. I think it's because the timeline on the build outs is years or decade. I mean, it just takes a long time to build a nuclear reactor, obviously. And so when you're faced with things which are that long of a time horizon, you just have ups and downs in the market. But I mean, that trend is growing. I mean, when you commit to a nuclear reactor like you're building it and, and obviously, inside of the US in particular, but the West in general, there's this acceptance that it's a form of green energy. So I don't see that trend going away. I mean, I think the most interesting thing to talk about is gold is like, you know, I know we have an op ed coming out, and I think we're going to have a CEO on here, we won't say who, in the next week or two, talking about $30,000 gold. You know, I mean, I don't I don't know if I believe that, but, I can tell you it is spectacular. The rise in gold. And I think gold equities are going to be a really interesting investment. I mean, they're just performing so well, right? I think they're beginning to earn the trust back that they lost in the last bull cycle. People are now beginning to hold on and reinvesting back into the companies. They're not divesting too much into all the strange critical minerals. And I mean, the price difference between gold and where these equities are for the companies is just crazy. No, I mean I've been I've, I bought this one called Skeena. You know it's in British Columbia. High grade huge big company and it's going to get taken out. They just have to get permitted it, right. If they actually get their permits then the thing is going double the next day I bought the GDX The GDXJ, because it's easy, right. So I, I'm definitely long all things gold for the moment. they, I think that they've got doubles like, you know, I think the big cap stocks even can double from here, right, or triple, I mean things you know I think this is the moment for gold right. This is going to be a great 12-24 months for gold equities. Yeah I mean is the volatility going to go away. That would be the only reason. And do we think that that’s going to happen in the next, you know, how long Trump got left. You know there's a lot of yeah you know you probably you probably start to sell this stuff like into the next election when you know. Well I mean who knows exactly. That might just mean more volatility. We’ve got some other ones here. Well, silver has not yet caught up with gold. I mean, that is another precious metal with massive industrial use. I mean, that is another one just waiting to go I mean, like, we're entering a bull market, like, this is a bull market, and, I think people should be in tune to that. Like, to make money, like it's really happening. And, silver is not caught up with gold, but I think that's kind of inevitable, too, you know, as people look at gold goes first the big caps gold you know, mid cap, small caps. Right. Okay. So the next bull market is it boom, bust or BS? We're in a bull market. This is a precious metal mega bull market. with a lot of volatility to keep you on your toes. Oh yeah like don't put your retirement in. Thanks very much for watching everyone. Don't forget to click subscribe. Thanks.