MINEX Forum

Tag: GDP

  • China’s Mineral Export Curbs Could Shave Over $1 Billion from US GDP — Macquarie

    China’s Mineral Export Curbs Could Shave Over $1 Billion from US GDP — Macquarie

    China’s export restrictions on a handful of critical minerals could cost the United States more than $1 billion annually in GDP losses, according to new research by Macquarie Group.

    The analysis, led by chief economist Ric Deverell, modeled the potential impact of Beijing’s export controls on four rare earth elements — samarium, lutetium, terbium, and dysprosium — along with gallium, all of which appear on the US government’s updated list of 60 critical minerals, which now also includes copper and silver.

    While the direct trade exposure may appear limited, Macquarie’s study highlights how supply disruptions to these small but indispensable materials could ripple through the defense, semiconductor, and clean-tech sectors, amplifying the economic impact far beyond their raw import value.

    The Numbers Behind the Risk

    In 2024, the US mined $17.5 billion worth of minerals domestically but imported $65 billion, Macquarie reported. Although China accounted for just $2 billion, or 3% of total US mineral imports, the concentration of value-added processing and material specialization in China means even a limited export ban could have disproportionate effects.

    Macquarie found that the US was:

    • 100% import reliant on 12 critical minerals, and

    • over 50% dependent on imports for another 33.

    For rare earths, the dependency is especially acute. The US relies on imports for around 80% of its rare earth compounds and metals, and about 70% of that supply originates from China.

    While the nominal import value of these materials is small — around $170 million in 2024, with $120 million sourced from China — the knock-on effects of an export halt could dent US GDP by over $1 billion in a single year, Macquarie estimated.

    The report also flagged gallium — a key input in semiconductors, LEDs, and defense electronics — as another potential choke point.

    Strategic, Not Just Economic, Damage

    Beyond direct losses, Macquarie warned that the strategic cost of supply disruption would be significant. Rare earths and gallium underpin advanced manufacturing, defense systems, and energy technologies, sectors that are difficult to substitute or reshore quickly.

    “Even a temporary interruption in these supply chains would carry lasting industrial and strategic repercussions,” the report noted.

    Australia’s Emerging Role

    Macquarie analysts also pointed to Australia as a potential replacement source for US critical mineral imports currently coming from China.

    Australia, which recently signed a Critical Minerals Framework agreement with the US, holds over 15% of the world’s critical mineral reserves and already produces nearly half of the minerals on Washington’s critical list.

    Although Australian exports currently account for just 2% of US critical mineral imports, investment in the sector is accelerating. As of October 2024, more than $50 billion in new projects were in the pipeline, positioning Australia to play a much larger role in diversifying Western supply chains.

    “Over time, Australia could feasibly replace all Chinese-origin critical minerals in the US import mix,” Macquarie said.

  • Audit Findings on Kazakhstan’s Geological Exploration and Subsoil Use Sector Reviewed by the Higher Audit Chamber

    Audit Findings on Kazakhstan’s Geological Exploration and Subsoil Use Sector Reviewed by the Higher Audit Chamber

    At a session of the Higher Audit Chamber of the Republic of Kazakhstan, the outcomes of a state audit on the utilisation of national resources in the fields of geological exploration and subsoil use were presented.

    📊 Currently, subsoil use contributes over 20% to the nation’s GDP. Kazakhstan possesses substantial reserves of mineral resources, including chrome, iron ore, lead, zinc, copper, uranium, gold, silver and others.

    📌 However, the audit identified several systemic shortcomings in the governance of the mineral resource sector.

    Among these is the high proportion of so-called “paper” resources—estimated but unconfirmed reserves not yet integrated into the economic cycle—particularly concerning as confirmed reserves become depleted. One key factor behind the slowdown in new reserve development is the lack of adequate funding for geological research. Despite the introduction of a licensing framework for exploration rights, investment activity among subsoil users remains low.

    Auditors observed that the Ministry of Industry and Construction had failed to implement initiatives involving the digitalisation of geological data, the creation of a digital database, updating of archives and promotion of private sector engagement. A lack of modern storage facilities poses risks of damage or loss of valuable geological records.

    Due to insufficient oversight by the Committee on Geology and poor compliance by contractors, the government paid 68.2 million tenge for incomplete works related to the digitalisation of geological materials.

    The Ministry of Industry permits amendments to subsoil users’ operational programmes without requiring tax expert review, allowing companies to interpret tax rules in their own favour—potentially avoiding budgetary contributions.

    Amid growing interest in Kazakhstan’s natural resources, demand is increasing for reliable laboratories that meet international standards. The lack of sufficient accredited laboratories weakens the quality control of precious metal and raw material exports.

    Auditors documented 81 procedural violations and 16 systemic flaws.

    As a result of the review, the Higher Audit Chamber issued a set of recommendations and directives aimed at developing the country’s geological exploration and subsoil use sector. Follow-up on these measures has been placed under active monitoring.