Canada’s only cobalt refinery has become an unexpected casualty of US sanctions on Cuba, exposing a critical weakness in Western mineral supply chains that extends well beyond geology…The shutdown of Sherritt International’s refinery in Fort Saskatchewan, Alberta, illustrates how political and regulatory risks can disrupt strategic mineral processing even when facilities are located in allied countries, Patricio Faúndez of GEM Mining Consulting wrote in a recent research note…The refinery depends on mixed sulphide precipitate produced at the Moa nickel-cobalt operation in eastern Cuba. Following a US executive order issued in May that broadened sanctions affecting Cuba’s metals and mining sectors, the refinery lost access to feedstock and will remain idle until production resumes at Moa…“The case sends a warning signal to the West: mineral security does not depend only on having plants, technology or political allies, but also on having supply chains that are traceable, financeable and legally viable,” Faúndez wrote…The broader lesson extends beyond one refinery, the analyst said. Governments across North America and Europe have invested heavily in processing capacity to reduce dependence on China for critical minerals, yet refining plants remain vulnerable if they cannot secure legally compliant sources of raw materials…The Fort Saskatchewan case, according to Faúndez, suggests that building refineries alone is insufficient unless governments also ensure stable, diversified and politically secure feedstock supplies…The report argues that cobalt presents a two-tier supply chain challenge. Mining remains heavily concentrated in the Democratic Republic of Congo and Indonesia, which together accounted for nearly 90% of global mine production in 2025. Refining, however, is even more concentrated. China produced almost 79% of the world’s refined cobalt last year, while Canada accounted for only about 3%...That imbalance leaves Western governments with limited room to manoeuvre…Building new refineries and processing plants will not, on their own, secure critical mineral supply chains. Governments must also ensure access to diversified, legally secure sources of feedstock that can withstand geopolitical shocks and regulatory changes.

The global race to secure critical minerals has opened up a world of opportunity for developing countries with the good fortune to have the right deposits of the right metals…The trick is to capture as much value as possible from the metallic riches in the ground…Processing ​is an obvious answer. Building smelters to transform ore into metal not only captures more value but offers a pathway to broader industrial and economic development…For Western policymakers, it's ‌also a way of loosening China's grip on midstream capacity across much of the critical metals spectrum…It also really helps, of course, if you ​have the minerals in the first place…Integrating processing with domestic mining helps build price resilience…With fewer smelters built in the West in the last decade or so, the number of equipment suppliers has dwindled and prices have risen accordingly.

The Department of War's Office of Strategic Capital (OSC) is pleased to announce the introduction of the National Security Fund Finance (NSFF) program, which aims to provide capital support to credit funds addressing shortages, gaps, and vulnerabilities in critical minerals vital to United States national security.  OSC's mission is to advance these strategic interests by providing direct loans and deploying other financial tools, with the NSFF program acting as the fund-level financing solution to accomplish that goal…The One Big Beautiful Bill Act, signed into law by President Donald J. Trump, provided funding for OSC to support critical minerals and materials. The NSFF program will provide loans to qualified investment fund managers, who will combine OSC loans with private capital to invest in portfolio companies focused on addressing U.S. national security shortages related to critical minerals and materials…The NSFF program clearly advances OSC's goal of crowding-in private capital to address shortages that are vital to U.S. national security. Paired with private capital, NSFF will drive significant investment to address gaps and vulnerabilities in our U.S. critical minerals industry. OSC is taking decisive action to restore our domestic critical minerals supply chain, revive our industrial base, and rebuild our military to achieve President Trump's goal of peace through strength," said David A. Lorch, Director of the Office of Strategic Capital and Senior Advisor to Deputy Secretary of War Steve Feinberg.

Critical minerals have moved to the forefront of energy, economic and national security agendas in recent years. This reflects growing concerns about supply chain concentration and the expanding use of trade restrictions. Although the adequacy of supply remains a major concern, notably for copper, governments are now placing greater attention on resilience, diversification and the security of supply in an increasingly complex geopolitical environment…Supply concentration in refining continued to edge higher for most minerals in 2025, with rare earths the notable exception…Gaps between projected demand and anticipated supply over the next decade have narrowed for copper and lithium, but new risks have emerged for cobalt due to policy shifts in major producers…2025 marked the year when the economic risks of highly concentrated supply chains materialised at scale…Strategic stockpiles can provide an important short-term buffer against supply disruptions…The conflict in the Middle East has provided another stark reminder of the vulnerabilities affecting mineral supply chains…Critical mineral investment declined by 9% in 2025, ending several years of growth…Exploration spending also declined by more than 10%...Public finance is increasingly being deployed to accelerate critical mineral investment…Analysis of project pipelines reveals a structural imbalance in efforts to promote supply chain diversification, with refining and downstream capacity lagging behind mining…There is a strong case for greater policy attention to strategic minor minerals…New projects in geographically diverse regions often face higher costs than incumbent suppliers, complicating investment decisions…Diversification requires well-designed policy tools to reduce investment risks…Countries can combine supply-side support with demand-side measures to strengthen the commercial viability of diversified supply chains…Critical minerals generally account for a small share of final product prices, although their cost contribution varies significantly across value chains, with important implications for policy design…The additional cost of supply diversification can be viewed as a mineral security premium – a form of economic insurance against major supply risks.