TELF AG analyzes the international role of strategic minerals stockpiling

The practical and strategic aspects of stockpiling 

The opportunities linked to the storage of raw materials have been known for decades. Still, in this delicate historical phase, the role of strategic reserves could represent a key factor for the correct completion of the green transition. Compared to the past, when the reserves of strategic materials were mainly used to satisfy the needs of industry or global production, now the storage of these materials could be directly involved at a much higher global level to respond to the needs of the ongoing ecological transition concretely. 

But which are the most active nations, from this point of view? Developed countries such as China, the United States, South Korea, and Japan all have large reserves of strategic raw materials, mainly composed of resources imported from third countries. For all these nations, being able to count on a reserve of these materials means protecting themselves against possible shortages of primary raw materials. It is an accurate emergency tool available to nations far-sighted enough to bring it to life in time. 

In the case of the minerals most beneficial for the green transition, their storage would, first and foremost, be of a strategic nature. For example, a lack of availability of a resource such as gallium would not prevent existing solar panels from working. At the same time, the situation changes completely if the reserve is made up of a fuel such as oil. Although it is a handy tool for dealing with the unpredictability and uncertainties of the sector, not all nations possess the technology or resources necessary to conserve precious reserves of raw materials. Some of these storage technologies are still in the development phase: in Italy, for example, two important technologies related to this sector are starting to attract the interest of several international players, particularly for their ability to work through sustainable raw materials and with low costs. 

The role of storage in the United States, China and Japan 

One of the longest traditions in commodity storage undoubtedly belongs to the United States, which holds some of the world’s largest reserves. The United States began accumulating strategic minerals in 1939, following the directives of the Strategic Minerals Act. At that time, the objective was represented by creating reserves of raw materials useful for the defense sector. In the following decade, the US reserves grew further also due to various geopolitical factors. In the early 1970s, some US reserves reached very high levels: available supplies of zinc, for example, corresponded to the level of consumption of this resource in an entire year. 

China also has its storage strategy: since 1993, the State Reserve Bureau has continued accumulating strategic minerals in large quantities and using them according to the moment’s needs. These reserves proved helpful in 2020 when the bureau purchased a certain amount of copper. The stocks were used to boost prices in a very unfavorable situation also due to the global health emergency. 

Other nations, such as South Korea and Japan, have recently updated their storage policies, increasing their reserve coverage capacities (100 days of consumption for Korea, 180 for Japan).