Donald Trump’s victory in the 2024 presidential election, and the Republican control of both the Senate and the House, means a ‘united government.’
A Republican-majority Congress will support Trump’s more extreme protectionist and anti-climate policies such as attempts to roll back the Inflation Reduction Act (IRA) and eliminating curbs on emissions, according to analysts from GlobalData TS Lombard.
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However, a united government also increases risks and opportunities for business due to faster and more coordinated legislative and executive action.
Trump 2.0 is expected to focus on four policy priorities: tax cuts/financial deregulation; protectionist tariffs on imports from China (especially) and other trade partners designed to reverse the harms of globalisation for American workers; combatting illegal immigration; and promoting abundant and cheap energy. “This package spells pain before (any) gain, contains many internal contradictions, and entails persistent disruption and uncertainty,” says TS Lombard.
So, what could Trump 2.0 mean for the mining industry?
Bolstering of domestic minerals production
On the campaign trail both Trump and Democratic presidential candidate Kamala Harris asserted their support for mining, with policy proposals looking to address reliance on foreign supply chains for critical minerals.
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By GlobalDataHowever, while the Democrat’s approach put “nearshoring and friendshoring” at the centre, Trump is expected to prioritise reshoring.
Critical minerals partnerships/alliances are still expected to move forward under Trump 2.0, but “possibly with less progress” than they would have under Harris, according to Grace Fan, global director of policy and disruptive research at TS Lombard.
Gregory Wischer, founder of critical minerals consultancy Dei Gratia Minerals, also predicts a Trump administration will continue and accelerate bipartisan policies strengthening US mineral supply chains.
“In particular, I think you can expect the [Trump] administration to focus heavily on domestic onshoring of all parts of the mineral supply chain, especially mineral extraction,” Wischer tells Mining Technology.
While the Biden administration’s mineral policy “heavily features international cooperation”, an incoming Trump administration is likely to “significantly prioritise” building more mines, processing facilities and refineries in the US, he adds.
He therefore expects the next administration “to pursue policies streamlining permitting and imposing tariffs – as President-elect Trump has noted repeatedly in his speeches – in an effort to incentivise domestic mineral production.”
When it comes to international partnerships, Frank Fannon, former US Assistant Secretary of State for Energy Resources under the first Trump administration, says we can expect “a bit of a different approach” compared with Biden.
“I think we will seek a degree of continuity with some of the international forums and some of the partnerships, but it is going to have to be with clear, clearly articulable objectives in terms of development,” Fannon stated at Resourcing Tomorrow in London in early December.
Mining permitting reform
Trump’s more relaxed approach to environmental regulation is likely to benefit both the fossil fuel and mining sectors.
The former president has already pledged to overturn a 20-year moratorium on mining in northern Minnesota. During Trump’s previous term in 2020, a report commissioned by the Nuclear Fuel Working Group looking at how to restore US nuclear energy leadership included objectives to streamline regulatory reform and “expand access to uranium deposits on federal lands”.
“A Trump administration is likely to be pro-mining, which means more mines could be permitted and put into production faster,” says Hugues Jacquemin, CEO of Northern Graphite, the only producer of natural graphite in North America.
In a poll run on Mining Technology prior to the US election, 56% of respondents said a Republican administration would most accelerate the speed of mine licensing and permitting in the US if elected to government, compared to just 15% for Harris’s Democrats.
However, despite bipartisan support for accelerating permitting, the time taken for a new US mine to be developed currently averages 29 years ─ the second longest lead time in the world after Zambia.
Tariffs and US-China decoupling
Trump has been vocal about his plans to impose stricter tariffs, and decoupling from China is expected to continue under his second non-consecutive term.
“Regarding mining, the ongoing US-China decoupling will likely continue along its current trajectory under a Trump presidency, given the sharp increase in tariffs already implemented under the Biden administration,” says Clarice Brambilla, energy transition analyst at GlobalData.
Biden has already raised tariffs on Chinese exports in sectors such as semiconductors (from 25% to 50%), solar cells (from 25% to 50%), electric vehicle (EV) batteries (from 7.5% to 25%) and EVs (from 25% to 100%).
“It is expected that a Trump administration would maintain these high tariffs to further reduce reliance on Chinese imports,” Brambilla notes.
“However, the US remains comparatively weak in the raw materials aspect of key technology value chains, which will hamper its ability to scale the manufacturing of these technologies domestically.”
Jacquemin expects Trump’s stance on China to be stronger than it is today.
“It was the Trump administration that first placed tariffs on graphite from China and if anything, he is seen using tariffs even more to protect US industry,” Jacquemin tells Mining Technology.
“Tariffs help to level the playing field and we can only benefit from a stricter regime on imports of Chinese graphite,” he adds.
Graphite is a crucial component of lithium-ion batteries. Global supply is dominated by China, with the country accounting for 77% of all graphite production last year.
Will Trump repeal the IRA?
Although a Trump White House is likely to be more supportive to the fossil fuel industry, that does not necessarily mean it will withdraw support for the EV sector. However, Trump may try to roll back the 2022 IRA.
The Biden administration championed regulations and incentive-based programmes that prioritise a clean manufacturing agenda and climate protection. This saw nearly $400bn in federal funding directed towards clean energy through the Infrastructure Investment and Jobs Act (2021) and the IRA.
In December, the Biden Administration surpassed the milestone of awarding $100bn in clean energy grants through the IRA. The administration is also on track to exceed its objective of disbursing more than 80% of available IRA grant funding by the end of Biden’s presidential term in January 2025.
However, the president-elect has “a responsibility” to review the IRA, given that no Republican voted for the legislation and the party now has control of the Senate and Congress.
According to Fannon, when it comes to the IRA, we can expect to see some areas that are permissive on China being tightened under the Trump administration.
“In the context of EV credits… if it comes from China, then it should not benefit from US taxpayer subsidy,” Fannon said in December.
He added: “With the Biden administration [we go] back to the competing interests of security versus climate change. They said up to 25% can be Chinese content [in EVs].
I think permissive provisions like that – which send a mixed signal to the investment community – are likely to be scrapped.”
Section 45X of the IRA provides a tax credit for the production and sale of certain components in the US, including critical minerals such as graphite, cobalt, lithium and nickel. However, this only extends to producers who also refine materials, something the National Mining Association says needs to change.
According to Brambilla: “Under a Trump administration, while the IRA may not be fully repealed, a Republican-controlled Congress could push to scrap certain provisions such as the $7,500 tax credit for EVs.”
However, Jacquemin says that if Trump does repeal the IRA “he will put something in its place to protect American industry”.
He also points out that “under the IRA, billions and billions of dollars have already flowed into the EV sector, with much of that occurring in Republican states”.
Any changes to incentives would, therefore, be sensitive to what has already been achieved to advance electrification and the energy transition.
Power Technology reported earlier this year that despite the fact that no Republican voted for the legislation, nearly 60% of the announced projects are based in Republican congressional districts.
Impact of Trump 2.0 on commodity markets
When it comes to the commodity markets, a Trump win is likely to mean some short-term turbulence, says John Sisay, CEO of Consolidated Copper.
Sisay also believes that energy transition metals will remain a priority. He tells Mining Technology: “As a crucial element in everything from electric grids to battery production, America’s demand for copper will remain healthy, and the world is shifting towards renewable energy and EVs.
“Harris may have offered a steadier hand, with a clear green agenda that could have boosted copper demand, though the inflation risks in her spending plans could have held us back.”
This article was originally published on 7 November, 2024 and was last updated on 10 December 2024 with industry analysis and comments from Frank Fannon (former US Assistant Secretary of State for Energy Resources).
