Eben@CANSLIM ResearchUS reliance on imported critical minerals has hit a 30-year high while domestic mining investment has collapsed to roughly 0.5% of GDP, and Morgan Stanley argues this combination creates the conditions for a US mining boom. The bank’s Metals & Mining team says permitting reform and national security imperatives are pushing policymakers on both sides of the aisle toward reshoring mineral supply chains. Among covered names, Freeport-McMoRan (FCX.N), Teck Resources (TECK.N) and MP Materials (MP.N) are flagged as potential beneficiaries, though the near-term impact of reform is described as somewhat limited.
Key Takeaways
- Morgan Stanley reports that US net import reliance for nonfuel minerals reached a record high in 2022, with imports exceeding 50% of consumption for 51 minerals and full import dependence for 15 minerals, up from 27 and 9 respectively in 1990.
- Domestic investment in mining and exploration has fallen to about 0.5% of GDP in 2022, down roughly 4.0x from ~2.0% in 1960 and a peak of ~3.1% in 1981.
- China refines 68% of nickel, 40% of copper, 59% of lithium, 73% of cobalt and 85% of rare earths, giving it decisive influence over global mineral markets, per the report.
- Mining permitting in the US takes on average 7-10 years versus 2-3 years in Canada and Australia, despite similarly strict environmental regulation.
- Morgan Stanley names Freeport-McMoRan (FCX.N), Teck Resources (TECK.N) and MP Materials (MP.N) as potential beneficiaries of mining reform, with junior miners and explorers the most likely winners overall.
What Morgan Stanley’s US Mining Report Says
In a report titled “We See Potential for a US Mining Boom After Decades of Underinvestment,” published 7 September 2023, Morgan Stanley & Co. LLC equity analyst Carlos De Alba and colleagues argue that after decades of declining investment and record import dependence, the US must act to reshore and secure its mineral supply chain. The report’s central claim is that the country’s reliance on imports for critical minerals has reached a 30-year high just as investment in the industry sits near multi-decade lows.
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