Reshoring minerals is a processing problem, not a mining one: lawyer
New mines won't break China's grip as Western refining, customer qualification, and revenue certainty lag, says Rebecca Seidl-Englesby.
Western governments face challenges in reshoring critical-mineral supply chains, according to Rebecca Seidl-Englesby, a mining lawyer at Baker Botts. The main obstacle is not finding ore, but processing it into usable materials for manufacturers. The timing mismatch between ore discovery and demand is significant - copper mines take about 17 years from discovery to first production, while permitting can take up to 30 years in the US.
Meanwhile, industrial demand moves much faster. China currently refines half the world's copper and 90% of its rare earths, meaning US-mined ore may still travel to Chinese facilities before becoming usable. Building Western separation and refining capacity is costly, slow, and environmentally challenging. Even after starting operation, manufacturers may need another 18 months to two years to qualify the output before buying.
This lag explains why new production can remain dependent on existing downstream infrastructure. Western governments are increasingly financing projects as commercial counterparts, taking equity positions, guaranteeing offtake, establishing price floors, and building stockpiles. However, such intervention comes with conditions like clawback provisions, domestic-content requirements, and golden-share consent rights.
Stockpiling alone is not a standalone solution, as strategic inventories cannot solve shortages if sufficient processed material is not available. Funding projects most likely to attract strategic capital now prioritize commercial readiness, including a creditworthy offtaker, credible pricing mechanisms, substantially complete permitting, a clear plan for processing and qualification, and a capital structure capable of surviving foreign-investment scrutiny.
Investors and governments want a route connecting the mineral deposit to a refinery and customer, avoiding being stranded assets. As automakers like Stellantis, Volkswagen, General Motors, and Ford take equity and offtake positions in mineral assets, explorers should prepare before approaching them by establishing clear title, preserving unencumbered offtake, cleaning up the capital structure, and identifying the specific part of the supply chain the project can fill.
Written by urgent.news from Mining.com's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
