- Carnegie modeling shows that even if all projects succeed, the U.S. can meet 2035 demand domestically only for zinc and molybdenum, leaving major import dependence for copper and other critical minerals.
- A 50% tariff on semi-finished copper aimed to boost U.S. processing, but exemptions for refined copper and other raw inputs spurred stockpiling and sharp COMEX-LME price distortions.
- U.S. supply expansion is constrained by higher mining costs and inadequate smelting capacity, limiting what tariffs and streamlined permitting can achieve.
- The analysis argues for pairing targeted incentives and demand-side tools with investment in processing and trusted foreign partnerships to secure supply without broad downstream cost spikes.
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The Carnegie Endowment analysis provides a quantitative model projecting U.S. critical minerals supply and demand out to 2035 under best-case scenarios for domestic production. It finds that only zinc and molybdenum can be fully supplied domestically, while copper, lithium, silver, nickel, manganese, and graphite remain severely deficient even if all pipeline projects succeed. These findings match recent reports showing that existing and planned mines globally may meet only about 70% of projected copper demand by 2035, driven in part by rapid build-out of AI data centers and grid infrastructure.
Recent trade policy—most notably the 50% tariff on semi-finished copper products announced in July 2025—was designed to shift value to domestic processing. However, exemptions for raw materials (ex. copper ore, concentrates, cathodes) up to 2027–2028 undermined initial expectations. Markets had front-run anticipated tariffs, leading to sharp price drops and oversupply once key exemptions were revealed. This underscores the delicate balance between protectionist policy and real cost impacts.
Furthermore, the U.S. faces cost disadvantages: its copper mining operations typically compete above the 50th percentile in the global cost curve, with many sitting above the 90th percentile; a price of ~$12,000/tonne may be needed to attract new investment. Meanwhile, domestic smelting capacity (~558,000 tonnes/year) is insufficient for projected demand, especially with planned expansions. These structural constraints limit the effectiveness of tariff-led onshoring strategies without cost compression across the supply chain.
Strategically, continuation of tariff-only policies may impose serious downstream costs—on manufacturers, infrastructure programs, and clean energy deployment—given material cost increases and supply volatility. Hence, supplementing tariffs with industrial strategy—streamlined permitting, investment in processing, public-private demand-side tools (such as contracts for difference)—and aligning with trusted foreign producers to diversify sources becomes critical. Open questions remain about environmental/regulatory bottlenecks, land/tribal disputes (e.g. Resolution in AZ), and timing of overseas projects.
Supporting Notes
- Under Carnegie’s modeling, even in optimistic pipeline scenarios, only zinc and molybdenum can meet U.S. demand by 2035; copper and many others will require imports.
- Carnegie reports U.S. copper mining costs around 8% higher than global average; many U.S. mines fall in expensive percentiles. BlackRock estimates ~$12,000/tonne needed to unlock U.S. supply.
- The U.S. has two primary smelters plus one secondary, totaling ~558,000 tonnes capacity; still, this is too little to process future domestic output.
- July 30, 2025: President Trump signed a 50% tariff on semi-finished copper and copper-intensive products, effective August 1; exempted raw inputs such as refined copper, cathodes, and concentrates.
- Refined copper imports surged before the tariff, accounting for nearly 70% of volumes, leading to massive stockpiling; futures spread COMEX vs LME jumped, then collapsed after clarified exemptions.
- Tom’s Hardware and others warn that only about 70% of projected 2035 copper demand globally will be met under current paths. U.S. already facing shortfalls (e.g., ~304,000 tonnes) in 2025.
- USGS data show 12–15 critical minerals are 100% net import reliant; for 46 nonfuel mineral commodities, imports make up over half of consumption.
- Permitting delays average 7–10 years in the U.S., compared to 2–3 years globally, worsening competitiveness.