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1. Role of Critical Minerals

Critical minerals are essential for advancing the energy transition, defense, and medical sectors, with securing reliable supply chains emerging as a global priority. The panel emphasized that investors increasingly recognize the strategic importance of these resources, drawing parallels to China’s steel supply chain development in the early 2000s. Surging demand for minerals like lithium, vital for batteries, EVs and semiconductors, is driven by decarbonization efforts, trade conflicts, and supply chain vulnerabilities exposed during COVID-19. China’s dominance in rare earth processing highlights the urgent need to diversify supply sources to ensure security across multiple industries.

2. Financing Challenges

Financing critical mineral projects faces significant hurdles due to limited capital availability, price volatility, and stringent investor requirements. The panel highlighted a shrinking pool of general equity capital, intensified by the closure of specialized funds, which heightens competition for funding. Lithium’s price fluctuations over the past two years discourage investors, who must anticipate future demand recovery. Maintaining affordability for mass-market applications like semiconductors and storage adds further complexity. ESG criteria, jurisdictional risks such as nationalization in the DRC and Mali, and liquidity issues in mutual funds during market downturns create additional barriers. Private equity’s long-term focus was identified as a more suitable funding mechanism compared to mutual funds, which face redemption pressures.