Listen ST Podcast on Where is the Money in Natural Resources ?
Transcript
(0:00 – 0:16)
So picture you’re playing a game of Monopoly, right? But like halfway through the game, the bank just decides, you know what, I’m gonna start buying up properties for myself just to make sure nobody else can build hotels. Right, just changing the rules mid-game. Exactly, the rules completely shift.
(0:16 – 0:32)
So the board looks the same, the little metal pieces are the same, but the underlying mechanics of like how you actually win or lose have been totally rewritten. And that is basically what has happened to the global natural resources market here in 2026. Yeah, it’s a massive shift.
(0:32 – 0:58)
I mean, historically, commodities were, you know, they were seen as the ultimate free market, right? Right, supply and demand. Exactly, supply and demand, the invisible hand guiding the pricing. But today, we’re looking at a landscape that is just heavily shaped by geopolitics, really aggressive government intervention, and an energy transition that is moving, well, way faster than the physical supply chains can actually handle.
(0:58 – 1:21)
Which is the core of our deep dive today, because we’re looking at a really fascinating stack of sources primarily anchored by this extensive May 2026 market analysis. It’s titled, Where is the Money in Natural Resources? I think that’s a great report. And it’s not just some narrow snapshot, it synthesizes data from the U.S. Geological Survey, tracking like over 90 individual materials.
(1:21 – 1:49)
We’ve got the Northern Territories Critical Minerals Assessments in Australia, projections from the IEA, and of course, live 2026 commodity pricing. And what really stands out about this collection of data, is how it connects the entire physical economy, you know? It’s mapping out the consequences of a world that is suddenly realizing, well, realizing you can’t build a digital future without digging up an enormous amount of the physical earth first. Right, you need the rocks to make the clouds.
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So our mission today is to take this mountain of data and map out exactly where the money is flowing in this new era of, you know, resource competition. From lithium to lamb. Yes, everything from lithium to lamb.
(1:59 – 2:13)
But more importantly, we want to uncover who’s actually capturing all that wealth, right? But to get there, I feel like we have to start with the foundation, right? The raw materials themselves. Oh, absolutely. You really can’t understand the financial wealth without understanding the physical materials first.
(2:14 – 2:26)
And right now, the epicenter of all of this is copper. Copper. Yeah, the International Energy Agency projections in our sources show copper demand potentially outstripping supply by like 30% by 2035.
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Wait, 30%. That is a massive shortfall for a commodity that goes into, well, practically everything, right? It is, it’s huge. Why is the gap projected to be that wide? So it comes down to two parallel mega trends, basically.
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Global electrification and artificial intelligence. AI, of course. Right.
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If you’re building out green energy grids, you need thousands of miles of new copper wiring. And if you’re building massive data centers to train these AI models, those facilities require just like astonishing amounts of power. Which means more copper.
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Exactly. Incredible density of copper infrastructure. The digital cloud is essentially anchored to the ground by copper wire.
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That’s a wild way to think about it. And the data points to a massive bottleneck here too, because China currently controls over half of the global refined copper production. Right, over 50%.
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So Western nations aren’t just dealing with a shortage, they’re dealing with a supply chain that runs almost entirely through a geopolitical rival. Which, I mean, totally explains why they’re scrambling. Yeah, it’s a huge vulnerability.
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But it isn’t just copper though, because I was looking at the numbers for lithium in this report, and they are wild. Yeah, by April of 2026, we saw lithium prices jump 155% year on year. 155%.
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I mean, that kind of spike usually means something has just completely broken down in the supply chain. In this case, it’s really just raw insatiable demand for battery chemistry. You literally cannot scale up electric vehicles or grid level renewable energy storage without lithium ion technology.
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Right, the flour and eggs of the tech cake. Exactly. And the physical extraction just simply cannot keep pace with the manufacturing targets these companies have.
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And lithium is just one piece of the puzzle, right? The sources list a whole strategic roster of essential materials facing similar risks. We’re talking graphite, cobalt, nickel, rare earth elements. Yeah, where China’s near monopoly is really triggering a lot of Western panic.
(4:26 – 4:37)
Totally. And then there’s the broader industrial list, like the Northern Territories tracked metals in Australia. Manganese, vanadium, magnesium, tungsten, bauxite, zinc, zirconium.
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Right, these are the unsung heroes of advanced manufacturing. You know, you need it for aerospace alloys, specialized steel making, defense technologies. They don’t make the flashy headlines like lithium does, but the modern economy just grinds to a halt without them.
(4:51 – 4:58)
Okay, let’s unpack this though. There was one metal on that list that genuinely surprised me, antimony. Ah, yes, antimony.
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It’s emerged as this massive priority mineral. And the Pentagon is actually using Cold War era authorities like the Defense Production Act to directly fund the domestic extraction and processing of antimony. Yeah, it’s a really interesting case study because it’s heavily used in munitions, military grade flame retardants, specialized batteries.
(5:18 – 5:33)
Wow, okay. So when a government realizes its defense supply chain, you know, relies on importing that specific material from a rival nation, it becomes a national security issue very quickly. Right, you can’t be buying your bullet materials from your rival.
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Oh wait, I have to push back a little here. Aren’t these just rocks in the ground? Like we have been mining for centuries. Humanity knows how to dig holes.
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Why is there a sudden panic right now? That is the big question. It’s really a structural timeline mismatch. Timeline mismatch.
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Yeah, think about the tech industry. If a software company needs to scale up, they can, you know, deploy new code, spin up servers in a matter of weeks. Right, very fast.
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But the physical world doesn’t move at the speed of software. The demand for EVs, AI data centers, renewable grids, that’s exponential and happening immediately. But opening a new copper or lithium mine, that can take a decade.
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A decade, just to start digging. Yes. You have to find the deposit, secure the permits, pass environmental reviews.
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Which take forever. Raise billions of dollars. And physically build the infrastructure.
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So the tech world is demanding like 20, 35 levels of supply today, but the mining world is still trying to get permits for 2026. Exactly. And honestly, it’s not just digging the rock out of the ground.
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The real bottleneck is the refinement process. Turning the dirty ore into the actual usable material. Right, making battery grade chemicals requires highly complex, often toxic processing facilities.
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And Western nations basically spent the last few decades offshoring all of that dirty processing to places like China. Out of sight, out of mind. Exactly.
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So now trying to rebuild that domestic refinement capacity from scratch is incredibly slow and expensive. Well, that perfectly explains the paradigm shift we’re seeing then. Because the free market alone isn’t solving a 10 year delay.
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The panic has forced governments to step in, which brings us to the death of the pure free market in commodities. Yeah, the scale of the intervention is really unprecedented. I mean, the IEA data indicates that critical mineral demand needs to grow by up 600% by 2040, just to hit global net zero targets.
(7:30 – 7:40)
600%, that is wild. Right, a 600% increase isn’t a natural market evolution, it requires a brute force approach. And the data shows governments are definitely bringing the brute force.
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The U.S. Department of Energy expanding its critical materials list to include things like silicon carbide, platinum, nickel. Trying to cover supply risks through 2035, yeah. But the most staggering example to me is Project Vault.
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Oh, Project Vault is fascinating. It’s a $10 billion initiative by EXIM, the Export-Import Bank of the U.S., to establish a U.S. Strategic Critical Minerals Reserve. $10 billion.
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And you know what’s fascinating here is, regardless of whether you agree with these defense policies or government interventions, right, the market doesn’t care about politics, it only cares about capital slows. Right. And right now, billions of government dollars are fundamentally altering how these markets behave.
(8:21 – 8:46)
So what does this all mean mechanically? Like, if I’m a mining CEO, what does Project Vault actually do for me? It sounds like the government is basically acting like a massive Silicon Valley angel investor and a guaranteed customer rolled into one. That is exactly it. They are de-risking the projects, they remove the ultimate fear for these miners, which is price crashes.
(8:46 – 9:00)
Right, because prices fluctuate constantly. Exactly. Historically, if a mining company spent $5 billion in eight years opening a new mine, they lived in terror that by the time they finally started producing, the global price of that matter might have crashed.
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Bankrupting the company before they even sell anything. Right. So what the government is doing now is creating artificial demand floors.
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They’re stepping in as an equity partner or a guaranteed buyer of last resort. Going back to our monopoly analogy, the government is essentially saying, hey, go ahead and build the hotel, and if nobody lands on it to pay rent, we’ll just buy the hotel from you so you don’t go bankrupt. Perfectly said.
(9:21 – 9:32)
They’re completely de-risking the project because it’s now considered a matter of national security. The government is no longer just a regulator handing out permits, they are a direct participant. Wow.
(9:33 – 9:53)
Okay, but while governments are aggressively stockpiling these industrial minerals for tech security, the sources show they are simultaneously stockpiling something much older for financial security. Right, we’re talking about the massive movements in the precious metals market. Yes, by late April 2026, gold surged to approximately $4,600 per ounce.
(9:54 – 10:01)
That’s like a 40% increase compared to the previous year. It’s a historic run. And the report makes it very clear.
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This isn’t just retail investors buying gold coins for a rainy day. Sovereign states and central banks are the primary beneficiaries here. They’re hoarding gold amid these global de-dollarization trends.
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Yeah, that’s the key driver. Break that down for me, actually. How does de-dollarization mechanically force gold prices up? Okay, so for decades, the U.S. dollar has been the undisputed global reserve currency.
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Right, right. The world runs on dollars. Exactly.
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If Brazil wanted to trade with India, they often priced and settled that trade in dollars. But recently, coalitions at the BRICS nations have been aggressively setting up systems to trade in their own local currencies. Bypassing the U.S. financial system entirely.
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Precisely. Because they want to hedge their sovereign risk. They don’t want to be vulnerable to U.S. sanctions or dollar inflation.
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Makes sense. But if you’re a central bank and you’re suddenly holding fewer U.S. dollar reserves, you still need a universally trusted asset to balance your books and stabilize your currency. And that asset is gold.
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Yes. So central banks are buying gold by the ton, which creates this immense upward price pressure. And silver is catching a massive tailwind from this too, right? Because the data has silver nearing $74 an ounce.
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Silver is really unique because it has this dual identity. It acts as a monetary asset, so it moves somewhat in tandem with gold as a financial hedge. Right.
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But it’s also a highly critical industrial metal. It’s the most conductive metal on earth, which makes it absolutely irreplaceable in solar panel manufacturing. Oh, wow.
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So it’s getting squeezed from both sides. Exactly. Central banks want it for financial security and energy companies want it for solar panels.
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Okay, here is what threw me though. We just said gold is up 40%, hitting record highs. But the 2026 pricing for platinum is actually down over 5%.
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It’s trading around $1,950 an ounce. Yeah, it’s an interesting divergence. It totally breaks the assumption I had that all precious metals just sort of rise and fall together.
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It’s like gold is the VIP at the club getting bottle service. Yeah. And platinum is stuck in traffic because nobody’s buying diesel cars anymore.
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I love that analogy. And it’s so true. People group precious metals together, but their market mechanics are entirely different.
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How so? Well, gold and silver are supported by monetary policy in central bank vaults. Platinum and palladium, on the other hand, are almost entirely captive to the automotive industry. Because they’re used in catalytic converters.
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Yes. Palladium is primarily used in gasoline catalytic converters and platinum is heavily tied to diesel engines. And central banks definitely don’t hoard platinum.
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No, they don’t. So when global regulations shift against diesel engines or EV adoption rises, the industrial demand for platinum drops. It really doesn’t matter what gold is doing.
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Platinum’s price takes a direct hit based on auto manufacturing trends. That makes a lot of sense. So we’re watching energy transitions in geopolitics completely rewire the metals markets.
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But, you know, you can’t eat lithium or gold. Definitely cannot. And the exact same energy crunch making it expensive to pull copper out of the ground is quietly wreaking havoc on something much more immediate, our food supplies.
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The agricultural bedrock. It’s a completely different asset class, obviously, but it’s governed by the exact same macro pressures. The numbers in the report for early 2026 are striking.
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Wheat is holding at $335 a ton. Sugar is up over 3%. Canola and chickpeas are posting solid gains.
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Supported by export demand, yeah. And the livestock markets are running incredibly hot. Australia’s cattle herd is forecast to exceed 30 million head.
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And lamb prices are sitting 81% above their five-year average. 81% is a massive jump. Yeah.
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So what is the mechanism driving food prices up alongside these industrial metals? It really just comes down to the cost of inputs. Specifically, energy. Modern farming is essentially the process of turning fossil fuels into food.
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Right. You need diesel to run the tractors. Exactly.
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Diesel for the combine harvesters. You need massive logistical networks to ship the grain globally. But most importantly, you need natural gas to produce synthetic nitrogen fertilizers.
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Ah, the fertilizer. So when energy markets get volatile or expensive due to geopolitical tensions, the cost to grow a ton of wheat naturally skyrockets. The demand for high quality protein and stable grains is always extremely robust.
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Yeah. People have to eat. But the margins for actually producing them are being squeezed by the sheer cost of energy.
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Here’s where it gets really interesting, though. There’s a specific detail in the report that blew my mind regarding this energy connection. Yeah.
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Cotton prices saw a 3.6% weekly increase. And the catalyst wasn’t like a bad harvest or a drought. The report explicitly ties the cotton price increase to higher crude oil prices.
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Yes, the synthetic substitution effect. How direct is that correlation? It’s surprisingly direct. The clothing industry is constantly choosing between natural fibers, like cotton, and synthetic fibers, like polyester.
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And polyester is a plastic, which means it is a direct derivative of petroleum. When the global price of crude oil surges, the cost to manufacture synthetic polyester goes right up with it. Wait, so clothing brands suddenly pivot away from expensive synthetics and start buying up natural cotton instead.
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Exactly, which spikes the demand and therefore the price for cotton. That is wild. Buying a basic cotton T-shirt is indirectly tied to the global price of Brent crude oil.
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It really is. Yeah. If we connect this to the bigger picture, it’s a perfect example of how interconnected the physical economy is.
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And it raises this interesting dynamic in agriculture. You might look at record high wheat or cotton prices and assume the farmers are getting incredibly wealthy. Right, because the prices are so high.
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But because their input costs the fertilizer, the fuel, are also surging, their actual profit margins remain very, very tight. The governments of importing nations, though, they reap the political benefits of keeping food prices stable for their citizens. Which actually brings us to the ultimate question of this entire deep dive.
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We’ve mapped out the surging commodities from copper to chickpeas, but who is actually capturing the wealth generated by all this turbulence? The source analysis provides a really elegant five-tier breakdown of who benefits, and it’s fundamentally a hierarchy of risk versus reward. Okay, let’s talk about the risk first, because my immediate assumption was that the miners, the companies physically digging the lithium or gold out of the earth, would be the biggest winners in a commodities boom. They certainly capture extraordinary upside during a policy-driven bull market.
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The data notes some gold miners are up over 100% in this cycle. But they sit at tier four in the analysis, because they also hold the most profound risk. Tier four, so they’re near the bottom.
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Right, geological risk is brutal. A company can spend billions building a mine only to discover the ore grade is lower than expected. Or a government suddenly revokes their environmental permit, they take the maximum physical risk.
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And below them at tier five are the local communities and trusts. Yes. They bear the environmental impact, but usually only capture a tiny fraction of the wealth.
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The report says typically just two to 5% through fixed extraction commodities. So if the miners are taking all the risk at tier four, who is sitting at tier one, taking all the profit. Tier one belongs to the processors and refiners.
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Refiners. Yeah, these are the companies that take the raw dirty ore from the miners and use highly specialized proprietary chemical technologies to turn it into battery grade lithium or high purity rare earths. Ah, so they hold the intellectual property.
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Exactly. They don’t take the geological risk of digging the hole. They just buy the raw material and apply their proprietary tech.
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That technological moat allows them to command the absolute widest profit margins in the entire supply chain. And right alongside them at tier three are the trading houses and logistics companies. The massive global shipping operations, right? They don’t care if the price of zinc or wheat goes up or down.
(18:07 – 18:29)
They make their money on the spread and the physical volume of moving the material from point A to point B. They are the ultimate middlemen. As long as the global economy requires physical materials to function, the logistics providers guarantee themselves a cut of the action without bearing the underlying commodity price risk. It’s basically the 2026 version of the classic gold rush rule.
(18:30 – 18:44)
Oh, absolutely. During a gold rush, don’t mine for gold, sell the shovels, except today it’s don’t mine for lithium, be the processor with the proprietary chemical tech or own the cargo ships moving it across the ocean. That’s spot on.
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The guaranteed money is in the middlemen. And then bridging the gap at tier two, we have the governments themselves. Acting as equity partners and securing strategic reserves.
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Right, but they are playing a different game entirely. They aren’t optimizing for quarterly corporate profits. They are optimizing for sovereign security and currency stability.
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So bringing all this back down to earth for you listening, why does tracking all these supply chains and price surges actually matter? It affects everything. It really does. Whether you’re managing an investment portfolio, prepping for a business meeting, or just trying to figure out why your grocery bill looks the way it does this market is the hidden architecture of the modern world.
(19:25 – 19:33)
Definitely. These critical minerals literally build the smartphone you’re using right now. The agricultural shifts dictate the price of the cotton shirt on your back.
(19:34 – 19:47)
Understanding how governments are manipulating these physical resources is basically a master key for understanding global geopolitics today. It does leave us with a rather profound question to consider though. Well, this raises an important question.
(19:47 – 20:21)
If we are entering an era where governments act as the ultimate buyers, equity partners, and market makers, putting massive financial floors, undermining projects to ensure national security, have we witnessed the quiet death of the free market in commodities? Oh, wow. And if financial failure in the resource sector is literally subsidized by the state, what happens to the drive for global innovation and efficiency? That is a fascinating thread to pull on. When the invisible hand gets replaced by a government checkbook, the whole concept of market efficiency gets thrown out the window.
(20:22 – 20:29)
Well, thank you for joining us as we unpack these sources today on this deep dive. Keep questioning the physical systems built around you, and we’ll catch you next time.
