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Critical Metals & Minerals: Policy & Economic Reality

Companies and Markets

By Matthew Dolowy-Busch  |  July 11, 2023

Concern for the metals and minerals supply chain has substantially heightened as geopolitical tensions, pandemic fallout, and inflation have highlighted the frailty of access to critical resources.

A number of government policy initiatives have attempted to address supply security for domestic and strategic demand—particularly for metals needed in the energy transition to decarbonize the economy. In tandem, usage of the term “critical” among metals and minerals projects has grown substantially among market participants as companies seek to capitalize on potential policy windfalls and funding (see Figure 1).

In this article, we will highlight the:

  • History of ‘criticality’ in metals and mining

  • Difficulty of finding consensus in categorizing metals as critical

  • Need for a policy response

  • Economic realities of companies developing critical metal mines

Figure 1: Mentions of “Critical Metals” OR “Critical Minerals” within Company Related Materials Over the Last 10 Years


Source: FactSet

History of ‘Criticality’

Within the FactSet Document Database, we can see one of the earliest references to critical metals coming from a technical review of the operations of Boliden AB (BOL-SE or “Boliden”) filed in May 1997 as part of a global public offering of approximately 50% stake in the company.

Figure 2: Early Mention of ‘Critical Metal’ from ‘Due Diligence Review of Smelter/Refinery Operations of Boliden AB (May 1997)


Source: FactSet, Company Reports

Speaking to the history of their Laisvall mine, we see a nascent reference to “strategically critical metal,” intended to secure the lead supply for World War II. The orebody was discovered in 1938. Boliden and the state signed an agreement in 1941 to secure supply, and the mine began operating by 1943. It produced lead (and later zinc) until its closure in 2001.

Historically, concerns about access to goods and services tend to be most prevalent during times of rapid economic growth or economic renewal —such as after the Industrial revolution or rebuilding after World War II. More recently, the COVID pandemic and the Russian invasion of Ukraine have renewed nations’ efforts to identify vulnerabilities in the mining supply chain and mitigate risk.

Consensus is Difficult

Criticality is often assessed along a few dimensions. The two most common:

  • Likelihood of supply disruptions (supply risk)

  • A commodity’s importance to an economy

Other key criteria may include whether:

  • A metal is critical for national defense or security (e.g., lead in 1940s Sweden)

  • A country has significant reserves or geological potential to supply a commodity vital to the national or global economy

  • There is concentration risk among the suppliers, and the supply chain needs producer diversification

Given each nation’s unique circumstance (politically, economically, and geologically), the definition of criticality is fluid from country to country—in other words, there’s no universal approach. Additionally, the lists of critical minerals are not static as they can change to reflect a nation’s shifting priorities.

For the purpose of this article, we focused on the Critical Minerals lists of a subset of nations, including the United States, Canada, Australia, United Kingdom, and the European Union. In Table 1, we highlighted in blue unanimous consensus on the criticality of certain metals.

Table 1: Selection of “Critical Minerals” as Designated by Certain Governments, With Consensus for Critical Minerals Highlighted Blue


Source: Government Reports

The Need for a Policy Response

While the designation of critical is fluid, there is growing consensus amongst nations that policies are needed to manage their supply risks. We highlight in Figure 3 the IEA’s (International Energy Agency) policies database on the subject, where we can see the number of policies addressing this topic has accelerated rapidly over the last five years, particularly as geopolitical tensions have risen (Figure 3).

Figure 3: Number of Critical Metals Policies Released (Including Those from States and Provinces)

d-number of critcal-metals-policies

Source: IEA

From a policy standpoint, a major effort is underway to prepare critical mineral supply chains to maintain present consumption and anticipate future demand for decarbonization and energy transition.

Within the context of a broader national strategic plan, governments may establish a variety of policy options to reduce or minimize critical metal risks. They may establish strategic stockpiles (as was done during WWII and the Cold War) or focus on coordination among allied nations to stem supply shocks.

They may also deploy public funding to develop domestic supply via state-owned enterprises, equity investment in companies, government procurement programs, or government lending. The endeavours are often co-mingled with initiatives focused on downstream value additions to the extraction and use of these commodities (such as incentives for electric vehicle manufacturing in addition to metal supply incentives).

Nations with critical minerals also have newfound leverage to re-negotiate their standing within the global supply chain, and they can respond with protectionist policies to maximize their national benefit. For example, a country may ban or control the export of raw critical metals to coerce investment into further processing on domestic soil. Or countries may consider economic stakes in existing projects and re-negotiate the windfalls of commodity profits.

The future of critical minerals will be deeply dependent on the strategic positioning of key jurisdictions with geological endowments (Figure 4) of economic grade, existing processing infrastructure, and the technical capabilities necessary to build out mines and downstream processing.

Figure 4: Count of Critical Mineral Properties by Primary Metal per Continent (Using the US Critical Minerals List)


Source: Prospector, FactSet

Critical Does Not Equal Profitable

Despite renewed legislative activity, a disconnect remains between policy intentions and the realities of developing mines and processing critical minerals. While some nations may deem a metal critical due to supply risks or future demand, the spot metal pricing often doesn’t reflect those assumptions. Metal pricing remains vulnerable to the whims of the global market.

Figure 5 highlights the normalized change in pricing for select critical metals since just before the start of the pandemic, which wrought havoc on global supply chains.

Figure 5: Normalized Change in Select Critical Metal Prices (Jan 2020 = 100%)


Source: FactSet

While some metals designated as critical have seen astounding leaps in their relative pricing, other metal prices have stayed the course or fallen as their particular supply and demand fundamentals have superseded the perceived risks of criticality.

Being designated as a critical metal isn’t the panacea to the pricing risk that mine developers face as they look to build new supply. As highlighted in our previous Insight article, exploring and developing a new mine is difficult and capital-intensive with a myriad of risks. From remote locations and supply-chain implications to unique geopolitical considerations, building a mine on time, on budget, and without hiccups is rare and has become even more difficult amid persistent global inflation. This reality remains true for critical mineral mines, despite the newfound political focus.

Unfortunately for policy setters, critical is not synonymous with profitable. For example, despite receiving a visit from the prime minister of Canada in January 2023, the critical REE (Rare Earth Elements) processing plant under development by Vital Metals Ltd. (VML-AU or “Vital Metals”) was placed under strategic review by April 2023. According to a media announcement, “Subsequent review of the economic viability of mining and beneficiating ore at North T has indicated that the scale of operations and associated unit operating costs will not achieve positive cashflow from the project.”

Another example: Despite cobalt being a widely designated strategic/critical mineral, the construction of Jervois Global Limited’s (JRV-CA or “Jervois”) Cobalt Operations in Idaho were suspended this March “due to continuing low cobalt prices and United States (the “U.S.”) inflationary impacts on construction costs.”


Reinvigorated interest and policies are welcome starts in developing and de-risking the supply of critical minerals. However, a policy is simply the first step of many toward a sustainable and intentional critical minerals supply chain. Policy and mine development are beginning to catch up to the historical underinvestment in domestic supply and overreliance on certain jurisdictions for critical minerals.

Investors in the space should continue to remain vigilant and monitor the evolving dynamics of mine development, demand, and policy responses. This is vital as nations deal with the tension between efficiency of supply (through a globalized supply chain) and security of supply (through a de-globalized focus on procuring local and allied suppliers).


This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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Matthew Dolowy-Busch

Senior Manager, Deep Sector Content – Metals & Mining

Mr. Matthew Dolowy-Busch is a Senior Manager for Deep Sector content at FactSet. In this role, he focusses on improving our Deep Sector content offering in the Metals & Mining sector. He joined FactSet in 2023, and prior to that he worked for over five years at a buyside firm that specialized in investing in the natural resource space, specifically in Metals and Mining. Mr. Dolowy-Busch holds a Bachelor of Applied Science in Mineral Engineering from the University of Toronto.


The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.