"Initial Milestones Reached"
In the realm of global energy transition and mineral production, the landscape is undergoing significant changes, particularly in the US and Europe.
Over the past decade, the average timeline for bringing a project through the permitting and land processes in the domestic US has stretched beyond ten years. This lengthy process has been a hurdle for many projects, but recent developments suggest a shift towards more expedient approaches.
The Trump administration's policies, for instance, have led to an increase in LNG and fossil fuel projects, as restrictions on oil & gas production have been eased and approvals for LNG exports resumed. This trend, however, may be subject to change as the new administration takes office.
Clients in the mineral sector are advised to prepare for continued volatility in energy policies and be ready to act swiftly based on these policies as they are rolled out. The key, according to experts, is to have access to good information quickly and to be nimble in adopting strategies to react to these policy changes.
Across the Atlantic, Europe has been focusing on critical minerals primarily from an energy transition perspective. However, the conversation has expanded to encompass national security and defense, making these mineral security discussions all the more important.
In response, the EU has approved its own list of critical mineral projects to foster European domestic production. The executive order includes rapid-fire actions directed towards federal government agencies to identify and support projects requiring immediate support, clear permitting backlogs, make federal land available, and put in place financing tools to support the development of projects.
The major purpose of a recent deal between the US and Ukraine appears to be to collect mineral-related revenues of Ukraine into a US-Ukraine controlled fund, which will support postwar reconstruction and economic development in Ukraine.
Looking beyond hydrocarbons, the US's self-sufficiency compared to its dependence on other countries for critical minerals is a point of distinction. The Trump administration's executive order on critical minerals, which positions these minerals as a national security imperative, adds uranium, potash, gold, and copper to the list of critical minerals.
The conversation also extends to the rest of the world, with China dominating the global minerals supply chain due to its about 60 percent of the world's global processing capacity across all minerals. There may be a roll-up of junior and mid-cap mining companies in the coming years to gain more efficiencies in terms of the development of mining and processing.
The podcast "The First 100 Days" discusses the regulatory, legal, and policy implications of the new administration on businesses across various industries, including the mineral sector. The general direction of travel, according to experts, is that the US is going to be more of an opportunity for investment in the mineral sector over the course of the administration.
However, the impacts of tariffs on the hydrocarbon sector and the mining and metals sector are also a concern. The costs of imported equipment needed for these industries will increase, potentially resulting in higher energy prices for consumers, and there's a risk of reciprocal tariffs affecting US exports.
For most of White & Case's clients, the changes occurring during this administration are more about adopting a wait-and-see approach, not being too reactionary. The critical thing, as always, is to stay informed and be prepared to adapt.
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