U.S. Treasury Secretary Scott Bessent convened an urgent meeting with finance ministers from 11 allied nations and an EU commissioner on Monday to address the escalating global mineral supply crunch, driven by China's overwhelming control over critical resources. The meeting included officials from Australia, Canada, the EU, France, Germany, India, Italy, Japan, Mexico, South Korea, and the United Kingdom, representing 60% of global demand for these strategic minerals.
Secretary Bessent opened the talks by highlighting the vulnerability of concentrated supply chains, stating, "Supply chains are too concentrated. They’re weak. They’re easy to disrupt. We need to fix that now." The U.S. presented plans to build stronger supply lines for rare earths, cobalt, lithium, graphite, and silver. The stated goal was not a complete decoupling from China but a strategic "derisking" of critical supply chains. The urgency was underscored by a recent Chinese ban on dual-use mineral exports to Japan's military, a move that resonated with nations dependent on these materials for energy, defense, and semiconductor manufacturing.
Concurrently, the CME Group announced a significant change to its margin calculation rules for precious metals, including silver, gold, platinum, and palladium. Effective Tuesday night, margins will be tied to a percentage of the notional value rather than a fixed dollar amount. This adjustment follows a 20% surge in silver prices this year, with spot silver rallying an additional 1% post-announcement. The CME stated the change was part of a "normal review of market volatility to ensure adequate collateral coverage," signaling that traders will need more capital to maintain positions amid price swings.
