“Every strike brings me closer to a home run.” — Babe Ruth
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Good morning!
China’s current chokehold on the production of critical materials like lithium and rare-earth minerals has caused plenty of consternation in U.S. and European corridors of power this year. China’s leverage wasn’t exactly a secret before this, but this was the first time China actually used it on a broad scale.
The U.S. responded by acquiring stakes in rare-earth producer MP Materials (MP 2.91% ) and lithium projects like Thacker Pass, while Europe formulated plans to stockpile critical minerals and introduced the Critical Raw Materials Act to boost domestic extraction and processing. A variety of deals and partnerships between the U.S., Europe, and their allies, has arisen to strengthen the supply chain. Yet there’s a growing awareness that those plans might not be quite as necessary as we feared — not that we’re out of the proverbial woods just yet.
Apparently, part of the answer might be coal.
No, we’re not talking about “clean coal.” Instead, we’re talking about coal that’s already been burnt. Some estimate that the U.S. has produced as much as 81 billion tons of coal ash over the decades, with millions of tons still produced every year. Research from the University of Texas at Austin strongly suggests the possibility that we could extract enough rare-earth elements from the waste product to satisfy as much as 94% of our current annual demand. The geologists estimate that a total of about 1,873 million tons of previously produced coal ash could still be recoverable, yielding up to $8.4 billion (11 million tons) worth of rare earth elements, including neodymium, dysprosium, yttrium, europium, and terbium.
Meanwhile, a growing body of evidence suggests that about 20 to 40 million metric tons of lithium might be sitting in a (dormant) supervolcano sitting on the Nevada-Oregon border. If these estimates prove even somewhat accurate, the so-called McDermitt Caldera would be the largest deposit yet discovered. Dr. Thomas R. Benson, a geologist at Lithium Americas Corporation (LAC 7.41% ), led the research into the potential deposit located in the aforementioned Thacker Pass.
To be clear, neither development represents an instant panacea to the challenges facing the U.S. and its allies. The pilot plant developing rare-earth extraction, newly built at the Wyoming Innovation Center, just began work in the spring, and it remains unclear whether the current proposed extraction process can be sufficiently scaled up in an economically viable manner. Meanwhile, the process of mining and refining lithium deposits remains infamously complex and time-consuming. Nevertheless, one simply never knows when an existing paradigm will be disrupted.
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📧✍️Here’s what a reader commented📧✍️
Q: Are you planning to keep holding your Nvidia after last week?
A: Surely AI is prominent. But recalling the deadwood of dotcom and reflecting on 25 years of progress as the titans emerged, I believe we are indeed in an epoch the likes of which are unparalleled. The key aspect Tom has pointed to is tech development amid a demographic shift. We have less to worry about our finances than the delicate planet we inhabit. To be sure the gamification of everything will create a point when you better grab a chair. You will know when the time comes. The hints will be unmistakable. Enjoy the ride.
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Equity markets continued to climb higher, after the grinding selloff since the Oct highs. In our view, the rally into YE remains intact.
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- Nvidia takes $2 billion stake in Synopsys with expanded computing power partnership CNBC
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- Trump says he has made his choice to lead the Federal Reserve BBG
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- Congress opens inquiries after report that U.S. targeted boat-strike survivors WSJ
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Overseas
- Indonesia floods death toll passes 500 BBC
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Of Interest
- Tom Stoppard, playwright, 1937-2025 FT
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| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 12/1 | 9:45 AM | Nov F Oct S&P Manu PMI | 51.9 | 51.9 |
| 12/3 | 8:30 AM | Sep Import Price m/m | 0 | 0.3 |
| 12/3 | 9:45 AM | Nov F Sep F S&P Srvcs PMI | 55 | 55 |
| 12/3 | 10:00 AM | Nov Sep ISM Srvcs PMI | 52 | 52.4 |
| 12/5 | 10:00 AM | Dec P Oct P UMich 1yr Inf Exp | n/a | 4.5 |
| 12/5 | 10:00 AM | Dec P Oct P UMich Sentiment | 52 | 51 |
| 12/5 | 10:00 AM | Sep PCE m/m | 0.3 | 0.3 |
| 12/5 | 10:00 AM | Sep Core PCE m/m | 0.2 | 0.23 |
| 12/5 | 10:00 AM | Sep PCE y/y | 2.8 | 2.7 |
| 12/5 | 10:00 AM | Sep Core PCE y/y | 2.8215 | 2.90511 |
