J2. Fossil Fuel Industry

The multi-year, $5 million software project should help operators better manage, treat and beneficially reuse produced water

Tabbs Bay is east of Houston near Baytown and La Porte. 

State regulators came under intense scrutiny in 2021 when it was discovered that one-third of its leadership lived out of state.

More than half of the U.S. population lives within 50 miles of a coast, so offshore wind sites are close to electricity demand centers.

We are able to track who actually builds and owns a large portion of the nation’s renewable energy.

Colorless and odorless, methane is a potent greenhouse gas that traps 83 times more heat in the atmosphere over a 20-year period than an equivalent amount of carbon dioxide.

Two proposed wind farms off the Texas and Louisiana coasts would join offshore oil drilling rigs in the gulf as the Biden administration tries to boost the country’s clean energy supply.

A Morgan Stanley report updated Monday states that retail energy generation company Vistra could see huge windfalls from ERCOT's new 'reliability-based' business model.  

Researchers are increasingly linking oilfield activity and seismic activity, with a new report from the University of Texas at Austin connecting the two in the Delaware Basin.

The cost of electricity in Texas is tightly tied to the price of natural gas.

A University of Arizona–led, $3.6 million Arbor-funded research initiative is assessing whether Arizona’s historic copper mine tailings—amounting to billions of tonnes—can be economically reprocessed to recover both critical minerals and hazardous elements while reducing environmental risk.

The University Tailings Center initiative, led by Dr. Isabel Barton, Associate Professor of Mining Engineering, is focused on recovering critical minerals such as arsenic, zinc and possibly tungsten from copper mine tailings, using advanced geometallurgy and mineral characterization to turn mine waste into a domestic resource.

The project combines remote sensing, industry data-sharing, field sampling, mineralogical characterization, and techno-economic analysis, with early findings suggesting unexpected mineral occurrences at some sites, according to Barton.

While not a full resource definition, the work aims to de-risk future reprocessing and byproduct recovery, including potential changes to current mining flowsheets to prevent valuable elements from first entering tailings. Finding out how much actual usable metal can be extracted from the tailings is the end goal of the project.

“The Arizona state mine inspector for research’s office was interested in finding out whether Arizona’s billions of tons of copper mine tailings constitute a potential resource of critical elements, which many of them are also hazardous in various ways to the environment,” Barton told MINING.COM in an interview.

“The idea is that if any of them is recoverable, then recovering that would contribute to the US critical metals supply as well as reducing the environmental hazards.”

The project kicked off in Q1 2024 with 17.5 billion tons of mine waste, including copper tailings, and is accumulating at a rate of upwards of 100 million metric tons a year, Barton said.

Re-characterizing tailings

For many years public awareness about tailings was extremely limited, Barton pointed out.

“It was by definition a waste product, and so why waste money characterizing it?” And while many companies have very strong characterization programs now, and they know what they’re putting out in tailings facilities, that wasn’t always the case. I would say for most of the 20th century it was not, and so where we’ve been playing catch-up, on figuring out what’s actually in these, added to which they’ve been active geochemical systems.”

The research team is working on sampling and characterization to start, conducting remote sensing studies to characterize tailings, both at a statewide level and more focused UAV-based mapping of individual tailings facilities, working towards developing new methods.

“We are getting data from partner companies in industry, many of whom have characterized their own tailings and have been kind enough to share that information with us,” Barton said.

“The surface samples from drilling down into the tailings become the basis for extraction studies to look at how much of which critical elements we can get out relatively easily. It ends with a techno-economic analysis to look at under what, if any, market conditions extraction would make sense.”

Historical backlash

There has been significant historical backlash against projects and products that contained arsenic, mainly because of concerns about its toxicity, threats to public health and environmental hazards.

The irony is that the US needs arsenic — its classified as a critical mineral by the US Geological Survey (USGS) and other nations because it’s crucial for gallium arsenide (GaAs) semiconductors used in LED lights, lasers, integrated circuits, solar panels, and telecommunications. It also hardens lead and copper alloys, used in ammunition.

“We’re 100% import reliant on arsenic, as well as most of these other semi-metallic elements,” Barton said. Being able to produce even a small amount of those domestically would significantly help US critical metals supply.”

This year, the team is starting the techno-economic analysis using standard extraction methods, such as magnetic separation and basic leaching, and is beginning to feed data to that team.

“We have found a few exciting things,” Barton said. “Minerals that we didn’t expect in a few places have been turning up, and that actually makes me somewhat optimistic that we’ll continue to find results that we didn’t think we were going to that might lead to viable tailings reprocessing.”

“I promise you, if you put me in a fully equipped lab, I can extract anything out of any source material,” Barton said. “The difficulty is doing it cheaply enough that you don’t break the bank with the materials and labor cost of the extraction. That’s one of the things we’re trying to find out in this project…[so] we can point the way for future work.”

Career momentum

Barton noted there has been a growing recognition that the US has outsourced most of its mineral production, and that it is problematic in a geopolitical context.

“For a long time, I think people were either unaware of the drawbacks or ignored them, but recently they’ve become too obvious to ignore.”

What bodes well is that the shift could potentially attract a new generation of talent.

“The workforce is rapidly decaying, and capacity to meet the material demands of a technological future is seriously in doubt. What we’re seeing is a scramble to make up some of that ground,” she said.

“It’s an industry with a stable and bright future, and I realize that calling the mining industry stable is going to raise a few eyebrows, but the fact is we always need metals. We always need industrial minerals – the demand for them isn’t going away. It’s only increasing.”

“The other thing I would point to is a workforce retiring en masse. We’re going to need more mining engineers in 10 years than we have now, more economic geologists, more metallurgists, more of everybody related to mining.”

US President Donald Trump and Congress are moving to overturn a Biden-era mining ban on public lands in northern Minnesota, leading to the revival of one of the nation’s biggest mining projects, Reuters reported, citing official government documents.

According to the news outlet, the move has been in the offing for much of the past year and involves “a complex series of legislative steps.” The plan, set to be introduced this week, came together after efforts failed to include the measure in Trump’s “One Big Beautiful Bill,” signed into law last July, congressional staffers told Reuters.

It highlights the Trump administration’s intensified push to bolster the US supply of critical minerals. Minnesota, in particular the Duluth region in the north, is known for its vast endowment of copper, nickel and cobalt, which are essential materials in electric vehicles, AI data centers, wind turbines, weaponry and a myriad of other devices. These resources have mostly been untapped to this day.

20-year ban

Development of mineral projects in the region has long faced obstacles. In 2023, then-president Joe Biden issued a 20-year mining ban on more than 225,000 acres of the Superior National Forest near the US-Canadian border, citing environmental concerns and the economic value of outdoor recreation.

However, Interior Department officials argue that the ban was not properly filed in the Congressional Record, as required under a federal lands law introduced in 1976, and are now submitting the paperwork to Congress. If lawmakers reject the ban within 60 days, it would be nullified and future administrations barred from issuing similar orders under the Congressional Review Act.

Republican Representative Pete Stauber, whose district covers northern Minnesota, plans to introduce legislation this week to formally reject the ban.

“We have industries here in our country that need these critical minerals. We must never rely on foreign adversaries like China for supply,” Stauber, who is also chair of the US House Subcommittee on Energy and Mineral Resources, told Reuters.

Twin Metals boost

If the mining ban is lifted, the Trump administration would then be free to reissue mining leases to projects in the area. The biggest beneficiary would arguably be Chile’s Antofagasta, whose Twin Metals unit has been trying to develop a massive copper-nickel mine on public land for decades.

The project’s mining leases have become a political hot potato since their issuance in 1966. The Obama administration had taken steps to block the project, before Trump renewed them in his first term, only to have Biden cancel them.

Antofagasta loses bid to revive Minnesota copper-nickel project

Twin Metals representatives told Reuters that it expects to get the leases back in the near future and that it is “very appreciative of Congress for their efforts to overturn an unnecessary and detrimental action that locked out a significant domestic source of critical minerals.”

The company’s project sits on one of the world’s largest polymetallic deposits and would be the first underground mine in Minnesota since 1967. It would also be the next major nickel mine in the US, as its only existing one is set to close near the end of the decade.

Stauber also confirmed to Reuters that he’s been told the government is already working on reissuing the leases, though he did not have additional details.

London-based La Mancha Resource Capital is reducing its stake in West Africa-focused gold producer Endeavour Mining (LSE, TSX: EDV) after its shares nearly tripled in value in a year.

The finance firm’s Luxembourg-based fund sold 3.5% of Endeavour in a bought deal at C$71.25 per share worth about C$605 million ($437 million), trimming its holding while remaining a major shareholder. The shares closed at C$77.61 apiece on Thursday, a 191% gain from a year earlier. The stock fell 6.1% on Friday morning to C$72.91, valuing the company at C$17.5 billion ($12.6 billion).

Shares in most major gold companies have more than doubled over the past 12 months as geopolitical tensions and central bank bullion buying has powered the yellow metal about 65% to successive record highs. The La Mancha fund, which had about $1.7 billion under management in November, held 35.3 million shares, or about 15% of Endeavour on a non-diluted basis before the sale. Now its stake stands at about 11%.

“This transaction forms part of La Mancha’s ongoing capital management strategy,” Vincent Benoit, CEO and managing partner of La Mancha, said in a statement. It’s “aimed at reducing leverage and rebalancing the portfolio following a significant increase in the fund’s exposure to Endeavour due to the strong performance of its share price,” he said.

Endeavour’s portfolio in West Africa includes main operations such as the Houndé mine in Burkina Faso and the Ity and Agbaou mines in Côte d’Ivoire with total annual attributable output from around the mid- to high-900,000-oz. range. It sold the non-core Boungou and Wahgnion properties in Burkina Faso in 2023.

‘Cornerstone’

“The La Mancha group has been a cornerstone shareholder of Endeavour for over a decade and this transaction does not reflect any change in our conviction in the company’s long-term potential,” Benoit said. “We remain a committed long-term shareholder, intend to retain a significant stake in excess of 10% of shares outstanding, together with board representation, and continue to fully support Endeavour’s strategy and management team.”

La Mancha said Egyptian businessman Naguib Sawiris will continue to represent the fund on Endeavour’s board of directors.

The group has been a key shareholder in Endeavour since 2015, when it sold its interest in Ity to the company in exchange for a significant position.

Government stakes

In Burkina Faso, the Ibrahim Traoré government has taken control of Endeavour’s former Boungou and Wahgnion gold mines following the collapse of their sale to Lilium Mining, a transaction that had been billed at more than $300 million including deferred payments and royalties. After a dispute over payments and ownership, the state moved in August 2024 to nationalize the assets and pay Endeavour about $80 million in cash and royalties.

Endeavour’s former Boungou and Wahgnion mines are now fully under state control, with the company no longer operating them but retaining a residual economic interest through the royalty structure. It’s a prime example of Burkina Faso’s recent push to expand state ownership in the gold sector.

Military governments across the Sahel region are pushing for greater stakes in mines operated by foreign majors as they seek revenue to counter Islamic extremists in the north and support some of the world’s poorest populations. Barrick Mining (TSX: ABX; NYSE: B) only recently settled a dispute with Mali for some $430 million, while 7th-largest uranium producer Niger is advancing projects with Global Atomic (TSX: GLO) and GoviEx Uranium (TSXV: GXU).

Rising geopolitical risks could push gold above $5,000 an ounce during the first half of the year, though a steep correction may follow in the second half, according to analysts at HSBC.

In a note published this week, the bank said it sees gold prices rising to a high of $5,050 an ounce within the first six months — up from its $5,000 target previously.

However, for the entire year, it expects gold to trade within a wide range that could go as low as $3,950 per ounce following a correction later in the year. This correction, its analysts said, could be significant should geopolitical risks subside or if the US Federal Reserve stops cutting interest rates.

Banks bullish on gold price as Morgan Stanley sets $4,800 target

As a result, the bank has slightly trimmed its average 2026 price forecast for gold to $4,587 an ounce from $4,600.

“We see a wide range of $5,050-$3,950/oz. for 2026 and an end-of-year price of $4,450/oz.,” HSBC analysts said, adding that trade is likely to feature high volatility.

“We believe that gold will continue to benefit from strong central bank demand, ongoing concerns over a weaker US dollar, and sustained interest in gold-backed ETFs,” HSBC wrote in its 2026 forecast note.

Beyond 2026, the analysts expect gold prices to rise further, averaging $4,625 per ounce in 2027 and $4,700 in 2028. Its previous average price forecasts for the two years were $3,950 and $3,630 respectively. In the note, they also introduced a 2029 average price forecast of $4,775.

Click on chart for live prices.

As of Friday morning, gold was trading above $4,500 an ounce, nearly $50 off its record high. The metal is coming off its best year since 1979 with an annual gain of 65%.

(With files from Reuters)

Rio Tinto (ASX, LON: RIO) is said to be open to temporarily owning Glencore’s (LON: GLEN) coal business to clear a key hurdle in merger talks that could create the world’s largest mining company, with a market value of nearly $207 billion.

The shift, according to media reports including Bloomberg‘s, would mark a sharp reversal for Rio, which exited coal in 2018 under investor pressure. Retaining the assets could be key to removing one of the biggest obstacles to a deal with Glencore, one of the world’s largest coal producers, after doubling down on the fuel with its 2023 acquisition of Teck Resources’ coal business.

People familiar with the talks told Bloomberg News that one scenario under discussion involves Rio acquiring all of Glencore, including coal, with the option to divest the business later. No final decisions have been made.

Beyond coal, Rio is also keen to keep Glencore’s powerful trading division and expand it into a more formidable platform for selling commodities, according to sources cited by Reuters. The interest goes beyond copper, with Rio looking to draw on Glencore’s marketing and trading expertise as part of any transaction.

Goldman Sachs estimates Glencore’s marketing business could be worth about $4 billion by 2030. The unit generated $1.4 billion in adjusted earnings before interest and tax in the first half of last year, highlighting its contribution to Glencore’s valuation.

Rio Tinto and Glencore hold buyout talks to create $207 billion mega-miner

Rio and Glencore confirmed late Thursday they were in early-stage buyout talks that could value the combined group at nearly $207 billion. Rio, the larger company with an enterprise value of about A$200 billion ($134 billion), would likely be the acquirer under the structure currently envisaged, the people said. Negotiators are also weighing valuation, deal structure and who would run a combined company.

Under UK takeover rules, Rio has until Feb. 5 to make a formal offer for Glencore or walk away.

Analysts weigh in

The talks underscore a renewed wave of consolidation sweeping the mining industry as companies scramble to secure copper growth amid soaring prices and constrained supply. Last year, Anglo American (LON: AAL) and Canada’s Teck Resources (TSX: TECK.A TECK.B)(NYSE: TECK) agreed to merge, raising the pressure on rivals to scale up.

Market observers say a potential Rio-Glencore combination would also sharpen the spotlight on BHP, which made two failed bids for Anglo American in recent years and now risks being sidelined as competitors pursue a transformative deal. Glencore’s copper assets are widely viewed as attractive, while its coal business has long been seen as a stumbling block for potential buyers.

Courtesy of Benchmark’s Copper Service.

BMO analysts said the companies have limited overlap beyond a shared appetite for copper growth, with few obvious synergies outside marketing and corporate functions.

“If they were to merge as-is, it would create the largest listed mining company by a long way, but realistically we’d expect significant reshuffling of the portfolio, including spin or divestiture of coal,” analyst Alexander Pearce wrote. He added the talks could also lead to asset-level combinations focused on copper.

For Benchmark Minerals experts, the merger would be beneficial for both companies but wouldn’t necessarily alleviate supply concerns, as it would be consolidating production rather than creating new production. The consultancy says their combined 2026 output would be over 1.6 million tonnes of production, higher than any other company globally.

Courtesy of Benchmark’s Copper Service.

Richard Hatch, an analyst at Berenberg, said the rationale echoed recent successful mergers driven by access to copper. Rio needs more of the metal as investors increasingly view iron ore as facing long-term price pressure, he said, adding that buying producing assets is preferable to waiting years to build new mines.

George Cheveley, natural resources portfolio manager at Ninety One, and a Glencore shareholder, also pointed to copper as the key driver. He said Rio’s investor day last month “struggled to articulate copper growth beyond 2030,” while Glencore has a deeper project pipeline. One uncertainty, he added, is whether BHP might feel compelled to get involved.

A decade in the making

The renewed talks mark a striking change from 2014, when Rio swiftly rejected Glencore’s proposal for what would have been the largest mining deal on record, triggering a public feud that exposed deep cultural differences. Glencore’s then-chief Ivan Glasenberg accused Rio of misunderstanding iron ore markets, while Rio criticized Glencore’s traders as short-term focused.

Negotiations resumed quietly in the second half of 2024 but collapsed over valuation, according to people familiar with the matter. Since then, copper prices have surged and Glencore has repositioned itself as a company with significant copper growth potential, while Rio continues to derive most of its earnings from iron ore.

Rio Tinto and Glencore spoke for months about deal that was once taboo

Leadership dynamics have also shifted. Glencore previously pushed for chief executive Gary Nagle to lead a combined group. Rio has since replaced former CEO Jakob Stausholm with company veteran Simon Trott, who took over in August and is seen as more closely aligned with chair Dominic Barton, a change analysts say could smooth negotiations.

Rio’s openness to coal reflects a broader change in the political and business climate, including a backlash against green policies championed by US President Donald Trump. Even so, the move could deter some investors.

“It could be difficult for some shareholders, given how many have mandates against holding thermal coal,” said Iain Pyle, senior investment director at Aberdeen Group Plc, which holds about 0.5% of Rio but bars Glencore from its future minerals fund because of coal exposure. Access to Glencore’s copper growth assets, he added, remains the appeal.

Glencore has disappointed investors in recent years by missing production targets, particularly in copper, but sought to reset expectations at an investor day last month by outlining plans to nearly double copper output over the next decade. That coincided with a rally that pushed copper above $13,000 a tonne this week amid mine outages and US stockpiling ahead of possible tariffs.

1. Includes copper demand from construction, cooling, appliances, fossil power generation, machinery and internal combustion engine (ICE) vehicles. 2. Includes copper demand from clean energy technologies, transmission and distribution and EVs. (Courtesy of S&P’s Copper in the Age of AI.)

For Rio, which has limited near-term copper growth after completing a major expansion at its Mongolian mine, the rally adds time pressure as iron ore prices remain subdued by China’s prolonged property slump. Glencore’s coal unit remains a major profit contributor despite weaker prices over the past year.

After acquiring Teck’s coal assets, Glencore scrapped plans to spin them out following shareholder pushback, with Nagle saying the ESG pendulum had swung back in coal’s favour.

(With files from Bloomberg, Reuters)

Canada’s Lundin Mining (TSX: LUN) has applied for environmental approval in Chile for a $150 million project aimed at optimizing infrastructure and extending operating continuity at its Caserones copper-molybdenum mine to 2039.

The company submitted the project for review to Chile’s Environmental Evaluation Service on Jan. 6 through its local unit, SCM Minera Lumina Copper. Lundin said the plan focuses on operational improvements without changing approved production levels or fresh water consumption at the Atacama Region asset.

The decision comes as copper prices hit record highs, touching almost $14,000 a tonne in London earlier this week. The rally has fuelled a recent surge in sector mergers and acquisitions, as miners increasingly favour a “buy over build” strategy amid a looming supply deficit and the rising cost and complexity of developing new mines.

Caserones, located in the Tierra Amarilla commune, is expected to produce between 127,000 tonnes and 133,000 tonnes of copper this year, in line with the company’s guidance.

The proposal keeps the mine’s approved operating life and input and output volumes unchanged from the original 2010 permit. Planned works include new access roads, a fresh water reservoir, and two backup sulphuric acid storage tanks to secure supply, according to the environmental impact study. Lundin also plans to expand leaching capacity by 90 Mt and extend operations at the solvent extraction and electrowinning plant.

The project represents the next phase of the Caserones operational adjustment program, which received regulatory approval last year.

Top-ten ambitions

Lundin aims to rank among the world’s top ten copper producers, targeting annual output of 500,000 tonnes of copper and about 550,000 ounces of gold within three to five years.

The strategy centres on brownfield expansions at Candelaria and Caserones in Chile and Chapada in Brazil, along with new developments in the Vicuña district on the Chile–Argentina border, including the Josemaría and Filo del Sol projects.

AI to boost copper demand 50% by 2040 — S&P

Caserones is owned 70% by Lundin and 30% by Japan’s JX Advanced Metals. The mine processes about 84 Mt/a of ore, has milling capacity of 100,000 t/d, and can produce up to 35,000 t/a of copper cathodes. While the operation forms part of Lundin’s district-scale Vicuña approach, declining ore grades in Chile are expected to reduce output by 2027 to 105,000-115,000 tonnes

To support potential future expansion, Lundin has stepped up exploration around Caserones, completing 18 km of drilling in 2025.

Fortitude Gold now has a second producing asset in Nevada after announcing the start of mining operations at its exploration-stage County Line project.

Fortitude is developing five high-grade gold projects along the historic Walker Lane mineral belt, leveraging the existing facilities at its Isabella Pearl mine, a conventional open-pit heap leach operation that is already producing gold dore.

In a press release Wednesday, the Denver-based gold miner said it has made the first shipment of mineralization from County Line to the Isabella Pearl processing facility, located about 14 miles away.

“We are excited to have begun operations at County Line, marking another Fortitude Gold milestone of placing our second Nevada gold mine into production,” Fortitude Gold’s CEO Jason Reid said in a news release.

The new mine consists of two historic open pits, with mining occurring initially from the bottom of the County Line pit. According to Fortitude, it plans to proceed with a pit layback during the second half of 2026 and extend into the second half of 2027.

In the meantime, the company is updating the County Line mineral resource to include exploration drilling from the other East pit, which was not included in the original 2022 resource estimate.

The project has several areas with exploration upside potential that are anticipated to expand the project’s mine life, including a target north of the County Line pit, an area south of the East pit, the Newman Ridge area to the east, as well as an area further to the south at the historic Rex mine, Fortitude said.

Scarlet South

Earlier in the week, Fortitude also received approvals from the Bureau of Land Management and the Nevada Division of Environmental Protection to construct and operate the Scarlet South open-pit gold mine.

The project is located approximately 500 meters northwest of its Isabella Pearl mine and processing facilities. Operations are expected to begin at Scarlet South in the coming weeks, the company said.

“Having recently been granted permits for our Scarlet South open pit, we now target our third operating gold mine at Scarlet South in the very near future,” Reid said. “Once we are granted permits, our synergistic hub and spoke business plan allows us to place new mines into production much faster and for less capital by leveraging existing infrastructure as opposed to building brand new processing facilities at every new mine.”

“We plan to deliver gold to our Isabella Pearl processing facility from three different sources, Isabella Pearl deep, County Line and Scarlet South, in 2026,” he added.

Greenland miner Amaroq’s (AIM, TSXV: AMRQ) shares surged on Thursday after reports came out that the company had held talks with the US government about investing in its mining projects in the Arctic island.

In an interview with CNBC, Amaroq chief executive Eldur Olafsson said discussions have been held with US government bodies about potential investment opportunities, which may include “offtake agreements, infrastructure support and credit lines.”

The report comes amid intensified efforts by the Trump administration to “buy” the Danish territory that boasts a vast endowment of untapped resources. According to government data, Greenland holds as many as 40 minerals that the US government considers to be “critical” to its national and economic security.

Toronto-based Amaroq currently operates the Nalunaq gold mine in southern Greenland, a historic site that it brought back into production in late 2024. It also has several other gold and critical minerals assets across the island, such as the Black Angel zinc-lead-silver project in the west, historically one of Greenland’s highest-grade base metal operations.

The company is currently said to hold the largest portfolio of mineral exploration licenses in Greenland. As a result, it has attracted strong demand from investors on both sides of the Atlantic in an oversubscribed funding round, and has also received funding interest from state-backed agencies in the US and Europe. 

With respect to potential investments in these projects, a US State Department spokesperson told CNBC that “the United States is eager to build lasting commercial relationships that benefit Americans and the people of Greenland.”

Greenland urges US, Europe to invest in its critical minerals, or China will

Following the CNBC report, shares of Amaroq rose more than a quarter to a near 52-week high of C$2.61 in Toronto, taking its market capitalization to over C$1.1 billion ($800 million).

On the same day, the Canadian miner also released its annual production results, showing that gold output from Nalunaq amounted to 6,600 oz, which is above the mid-point of its annual guidance range. The gold mine is currently in the production ramp-up phase, having only entered production for over a year after sitting idle for more than a decade.

China’s threats this week to restrict rare earths exports to Japan could harm the Japanese economy and manufacturers, which heavily depend on China for supplies of the critical minerals.

China’s Ministry of Commerce announced Tuesday a ban on the export to Japan of dual-use items that have civilian and military applications, the state-run China Daily reported.

But Beijing is also considering curbs on export permits for some rare earth-related products, according to the Daily.

The move appears to be a reaction by Beijing against comments made in November by Japanese Prime Minister Sanae Takaichi, who suggested Japan could become involved in a military conflict over Taiwan, a sensitive issue for China which regards Taiwan as its own province.

Asian rare earth stocks surge on new China-Japan export curbs Huge economic losses

While details on rare earth export restrictions weren’t yet known, analysts said the economic fallout for Japan could be severe.

The country’s automotive industry, which uses rare earths for magnets, drivetrains and batteries could be forced to cut production or halt manufacturing altogether if rare earths are cut off, Hidetoshi Tashiro, chief economist at Japan’s Infinity LLC told China Daily. Tashiro is also CEO of Terra Nexus Project Management Services.

A ban could easily affect other manufacturers as well, including the wider electronics industry and especially semiconductor producers, he said.

If the rare earths restrictions last three months, Japan could incur losses of about 660 billion yen ($4.2 billion), pulling down nominal and real GDP by an annualized 0.11%, according to analysis from Japan’s Nomura Research Institute. After one year, those losses could reach 2.6 trillion yen, denting GDP by 0.43%.

Japan’s Nikkei stock index fell more than 1% on Thursday, after falling by the same amount on Wednesday and Tuesday.

Billions worth of imports

Japanese trade figures cited by China Daily show that in 2024, electrical machinery and telecommunications equipment imports from China totalled 7.7 trillion yen, personal computers and peripherals came to 2.4 trillion yen, precision optical instruments 400 billion yen, and rare earths 200 billion yen. Those imports totalled about 10.7 trillion yen, comprising around 42% of Japan’s total imports from China that year.

China’s export restrictions echo a similar move by Beijing in 2010, when it sharply cut rare earth shipments to Japan following a territorial dispute over the Senkaku Islands.

Supply chain independence

Though the ban only lasted about two months, it alerted Japan to its reliance on China for the critical minerals and spurred it to seek other suppliers.

In 2011, Japanese conglomerate Sojitz and government mineral agency Jogmec made a $250 million deal with Australia’s Lynas Rare Earths (ASX: LYC) for long-term supply of the 17 elements. Lynas holds the Mount Weld mine in Western Australia and is the largest producer of rare earths outside of China. Lynas processes the elements at a facility in Malaysia.

Lynas becomes first producer of heavy rare earths outside China

The Lynas deal and other supply chain arrangements have helped Japan reduce its reliance on Chinese rare earths to 60-70% today from 90% in 2010, according to Jogmec data cited by The New York Times.

US rare earths deals

Japan’s initiatives to bolster its supply chain resilience came several years before the United States accelerated similar efforts.

In August, the Department of Defense and MP Materials (NYSE: MP) – the only producer of rare earths in North America – signed a 10-year off-take agreement that sets a price floor of $110 per kg for neodymium-praseodymium materials.

That followed a $500 million deal in July between MP and Apple (Nasdaq: AAPL) for domestic supplies of rare earths for smartphones and electric vehicles.

Silver extended its slide on Thursday as investors braced for a commodity index rebalancing and took profits on a metal that has more than doubled in value over the past year.

Spot prices declined as much as 5% to $73.91 an ounce, before paring some losses. It follows a 4% drop from the previous session after surging past $80 per ounce again earlier this week.

Click on chart for live prices.

Meanwhile, gold held steady after erasing a 1% loss from earlier in the session.

Index rebalancing

Investors are positioning themselves for an annual rebalancing of commodity indexes, which would require funds to sell precious metals futures contracts worth billions of dollars in the next few days.

Citigroup estimates that about $6.8 billion in silver futures could be sold, equivalent to about 12% of open interest on Comex, while outflows from gold futures will total roughly the same amount.

Both metals faced a similar index selloff last year, without causing a discernible drag on the market, according to a December note from JPMorgan Chase. The bank, however, said the amount of selling required in silver is more outsized this year.

Compared to gold, silver is more exposed to index rebalancing, and thus is more volatile. Exchange data showed that silver-backed ETFs saw their biggest one-day outflow since October on Wednesday.

“I’ve been running this process for many years, and we haven’t seen any outsized flow like this one,” said Kenny Hu, a strategist at Citi.

Broadly bullish

Despite the two-day slump, analysts remain broadly bullish on precious metals due to heightened geopolitical risks, namely heightened China-Japan trade tensions and the capture by the US of Venezuelan leader Nicolás Maduro.

Banks bullish on gold price as Morgan Stanley sets $4,800 target

Gold is coming off its best annual performance since 1979 after hitting record highs 50 times throughout 2025. The rise was supported by central bank purchases and inflows to ETFs. A sagging US dollar added further fuel to prices, making the metal more affordable for buyers in other currencies.

“The rally is fueled by a potent mix of safe haven and risk-off purchases, spurred in part by USD weakness, and policy uncertainty,” wrote HSBC’s chief precious metals analyst James Steel, who sees gold hitting $5,000 an ounce in the first half of 2026, bolstered by rising geopolitical risks and rising fiscal debts.

Silver was even more spectacular than gold with a gain of 150%, as a historic short squeeze gripped the market last October and helped drive prices to unprecedented levels towards year’s end.

(With files from Bloomberg)

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