Summary
The U.S. domestic supply chain secured a major development milestone as Perpetua Resources broke ground on its Stibnite mine in Idaho, positioning it as the sole American source of Antimony—a defense-critical metal. Simultaneously, major miner South32 reported strong progress, boosting its manganese volumes significantly as it advances the critical battery-grade manganese deposit in Arizona. These domestic milestones occur against a backdrop of complex global market dynamics: South Korea is now urgently pressured to join the new U.S.-Australia-Japan Rare Earth alliance to secure its auto and tech industries against China's resource weaponization.
Key Points
Perpetua Resources Breaks Ground on Stibnite Antimony Mine
Perpetua Resources has officially begun early works construction at its $1.3 billion Stibnite gold-antimony project in central Idaho. The project, which was fast-tracked by the U.S. government, is set to be the only domestic source of Antimony—a mineral essential for defense systems, energy storage, and semiconductors. The mine's development directly counters the supply vulnerability created by China's recent export controls on antimony.
South32 Boosts Manganese Output and Advances U.S. Deposit
South32 Limited reported a $\mathbf{33\%}$ increase in its manganese volumes following a successful recovery plan at its Australia Manganese operation. Critically, the company confirmed that the exploration decline for the Clark battery-grade manganese deposit within its U.S. Hermosa project in Arizona is on schedule for completion in the December 2025 quarter. This progress advances the U.S. goal of securing a domestic source of battery-grade manganese.
South Korea Urged to Join U.S.-Japan-Australia Rare Earth Alliance
Commentary in South Korea is strongly advocating for Seoul to immediately join the new U.S.-Japan-Australia framework for rare earth supply chain security. The urgency follows China's expanded export controls, which threaten South Korea's highly competitive auto and defense sectors. South Korea’s government has already activated a Rare Earth Supply Chain Response Task Force to address its $\sim 80\%$ reliance on Chinese rare earths.
Critical Mineral Market Function & Volatility
Critical mineral markets are inherently volatile due to structural differences from traditional, liquid metal markets. The International Energy Agency (IEA) highlights that supply chain fragility is the primary obstacle to the energy transition.
1. The Concentration and Opacity Problem
Geographic Concentration: Supply chains are highly concentrated. The average market share of the top three refining nations for key battery minerals (lithium, cobalt, nickel) is around $86\%$, with China dominating in REEs, refining roughly $90\%$ of global supply.
Inelastic Supply: Mines take $7$ to $15$ years to bring online. This time lag means that when demand surges (driven by EV mandates), supply cannot respond quickly, leading to massive price spikes (the "boom" phase).
Opaque Pricing: Most transactions for battery materials occur via private, long-term offtake agreements rather than liquid futures exchanges. This opacity leads to poor price discovery and extreme swings when actual supply hits the market, creating the "bust" phase that deters necessary long-term capital.
2. The Volatility Engine: Boom-Bust Cycles
The combination of limited producers and high demand creates structural price instability. When prices crash (e.g., lithium and cobalt in 2023), investors are scared off, leading to delays or cancellations of the next generation of necessary projects. This perpetuates the cycle: today's low price signals future shortages, and tomorrow's high prices signal future oversupply. To counter this, financial instruments like cash-settled futures are attempting to provide hedging tools.
Why It Matters
Defense Secures Its Own Supply
Groundbreaking on the Antimony project confirms that the U.S. strategy of vertical integration and domestic sourcing for defense-critical materials is now moving into the execution phase. This provides guaranteed geopolitical security for a metal essential to defense applications, minimizing exposure to foreign export controls.
Manganese is the Quiet Cornerstone
South32's strong progress on the Hermosa Clark deposit highlights the crucial but often overlooked role of Manganese in the battery transition. As manufacturers look for ways to reduce high-cost cobalt (DRC risk) and nickel (oversupply risk), battery chemistries utilizing more manganese (like high-manganese cathodes) are gaining traction. Establishing a domestic supply is a key structural de-risking event for the U.S. battery industry.
Geopolitical Alignment is Key to Survival
South Korea's urgent response to China's export controls demonstrates that technological supremacy is now inseparable from resource security. For manufacturing-heavy economies, strategic alliances (U.S., Australia, Japan) are no longer optional diplomacy, but a prerequisite for maintaining industrial competitiveness and avoiding direct resource extortion.
Watchlist Companies
Company / Entity | Context | Homepage / Link |
Perpetua Resources (PPTA) | Developing the sole U.S. Antimony mine in Idaho; direct beneficiary of U.S. defense focus. | |
South32 (S32) | Major Manganese producer; advancing the Hermosa battery-grade manganese deposit in the U.S. | |
Volta Metals Ltd. (VLTA) | Canadian exploration company focused on rare earths and gallium; active in the Ontario critical minerals district. | |
Lynas Rare Earths (LYC) | World's largest ex-China REE producer; key player in the U.S.-Australia alliance. | |
Alcoa (AA) | Partner in the new Gallium Recovery Project in Western Australia with U.S. and Australian government backing. | |
Sojitz (2768.T) | Japanese trading company; tri-party partner in the newly funded Gallium recovery project in Australia. |
Critical Minerals Spotlight
Antimony — Defense Security: Groundbreaking on the Stibnite mine assures the U.S. of a domestic supply source, reducing reliance on foreign, unstable imports.
Manganese — Battery Grade: South32's progress on the Hermosa Clark deposit provides a clear timeline for the U.S. to secure a domestic source of battery-grade manganese for cathodes.
Rare Earths — Geopolitical Alignment: South Korea's strategic need to join the U.S.-Australia alliance underscores the success of the strategy to isolate China by creating parallel, allied supply chains.
Action Points
Monitor Antimony Project Funding: Track Perpetua Resources' progress and potential access to U.S. government funding programs (DOD, EXIM) as the project moves from early works to full construction.
Evaluate Manganese Offtake Opportunities: Battery manufacturers should explore long-term offtake agreements with South32’s Hermosa project to guarantee access to stable, domestically-sourced manganese supply for their U.S. facilities.
Track Korean Alliances: Closely observe which Australian or U.S. rare earth producers South Korean companies (auto, battery, semi) partner with, as this industrial demand will be a major catalyst for those junior miners.
This briefing is for informational purposes only and is not legal, investment, or policy advice. Information is believed accurate at time of publication. Sources are publicly available.