Critical minerals drive resources sector growth

What happened: U.S. Senators Bill Cassidy and Cynthia Lummis introduced the 'Mined In America Act' on Monday, aiming to reshore Bitcoin mining and establish a U.S. Bitcoin strategic reserve. Meanwhile, Ecora Royalties reported that critical minerals now generate the majority of its portfolio income, with CEO Marc Bishop Lafleche noting 2025 as a landmark year. USA Rare Earth CEO Barbara Humpton revealed the company is actively pursuing global acquisition opportunities across the critical minerals supply chain. The West is uniting to secure and supply critical minerals, with the EU and U.S. nearing an agreement to coordinate efforts, excluding China. Australia's iron ore sector, a global steel supply backbone, is entering a more constrained phase due to maturing assets and evolving demand.

Market impact: The resources sector is growing, driven by increased demand for critical minerals. The 'Mined In America Act' could boost U.S. Bitcoin mining and related investments. Ecora Royalties' shift towards critical minerals indicates potential sector-wide trends. USA Rare Earth's acquisition pursuits signal increased M&A activity in the critical minerals space. The West's coordinated effort to secure critical minerals could lead to geopolitical tensions and supply chain disruptions, affecting companies like China's rare earth producers. Australia's iron ore sector may face valuation repricing as demand shifts and margins tighten.

What to watch next: On May 15, USA Rare Earth is expected to provide an update on its acquisition pursuits. By Q2 2023, the EU and U.S. are anticipated to finalize their critical minerals agreement. Australia's iron ore producers will report their quarterly production figures, with Fortescue Metals Group and BHP Group slated for May and June respectively. These catalysts will shape the narrative around critical minerals, geopolitical tensions, and the resources sector's growth.