As the strategic importance of copper continues to grow around the world, it is imperative that the U.S. “friendshores” its international supply chains. Brazil has immense copper resources and the U.S. can benefit from nurturing favorable relationships with the South American country in order to tap this resource in a mutually beneficial way. The Center for Strategic & International Studies (CSIS) offers a number of policy recommendations through which copper supplies can be obtained from Brazil for decades to come.
First, they recommend strategic exemptions to tariffs. Many of the tariffs the U.S. has imposed on its trading partners around the world are driven by national security considerations. However, when these tariffs aren’t carefully targeted, they risk alienating nations that hold strategic value to the U.S.
For example, the blanket application of import tariffs on copper could allow countries like China to become attractive destinations for critical supplies, and that would hand huge benefits to China. If the U.S. offered exemptions to copper from Brazil, trade ties would be strengthened and America would have a considerable amount of the copper it needs sourced from a friendly nation like Brazil.
Tapping DOD funds to bolster strategic projects can also help the U.S. secure reliable supplies of copper from Brazil. The department of defense’s Strategic Capital Office can leverage its mandate and help in offsetting the huge cost required to get extraction and processing projects off the ground in Brazil. The agreements reached can include provisions setting aside a given volume of feedstock to be used for the benefit of the U.S. In this way, needed supplies can be obtained and hostile nations can be limited from exploiting those resources.
Strategically finance the establishment of vertically-integrated projects. This is important because China has come to dominate the refining and processing of many minerals extracted from around the world. By focusing on vertical integration, the U.S. avoids the shortsighted mistake of looking at just extraction and when those minerals are mined, they end up being shipped to China for processing, which then hands the advantage to the East Asian country. Such a strategic oversight can be avoided by investing strategically to provide vertical integration so that the supply chains remain in the control of friendly players.
These and other recommendations by the CSIS focus on Brazil but they can be applied to other nations regarded as friendly to the U.S. If such measures are arranged with Canada, for example, the resources being explored for by entities like Torr Metals Inc. (CVE: TMET) and other companies would go a long way in meeting the import needs of the U.S. and freeing the country from the supply chains controlled by China and its allies.
NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (CVE: TMET) are available in the company’s newsroom at https://ibn.fm/TMET
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