In a rapidly shifting global economic landscape, investors and policymakers alike are grappling with a series of developments that could redefine the future of critical commodities and strategic resources. From cautious optimism in rare earth investments to China's mixed stimulus effects on steel markets and a groundbreaking discovery of zirconium reserves, these intertwined stories highlight the complexities and opportunities shaping 2025.
Legendary investor Rick Rule, known for his deep understanding of natural resources and credit markets, recently shared his cautious yet forward-looking perspective on the global economy and the critical minerals sector. Speaking candidly, Rule expressed nervousness about the economy, pointing out weak demand signals in energy and industrial commodities. "Before the renewed conflict in the Middle East, we had flat to falling oil supply—and still falling prices. That tells you demand is weak, which tells you the economy is weak," he explained. His unease extends to the political landscape, particularly U.S. tariff policies, which he characterizes as detrimental taxes on the economy.
Despite these concerns, Rule finds bright spots in technological progress, especially artificial intelligence, which he believes will lower production costs and empower creative, tenacious individuals. This optimism extends to his investments in critical minerals, where he is cautiously backing companies like Meteoric Resources in Australia and Aclara Resources operating in Canada and Brazil. "I’m still learning the space," he admits, emphasizing the complexity and the abundance of self-proclaimed experts whose knowledge may be superficial.
Rule's ongoing engagement with the sector is also reflected in his co-founding of Battle Bank, an innovative financial institution tailored for self-directed investors. Battle Bank offers high-yield accounts, multi-currency savings, and gold-backed loans starting at $10,000—a much lower threshold than traditional banks. It also pioneers "checkbook IRAs," allowing Americans to use retirement funds for real estate, franchises, or physical assets. This initiative underscores Rule’s commitment to empowering investors to take control of their financial futures beyond conventional Wall Street products.
Meanwhile, the rare earths market is poised for a boost, as suggested by analysts eyeing ETFs like REMX. Though the author of one such analysis expresses no current holdings, there is an intention to initiate a beneficial long position within 72 hours from July 31, 2025, signaling growing investor interest in this strategic sector.
Turning to China, the world's largest steel and iron ore consumer, its 2025 economic stimulus measures have drawn mixed reviews. While the government has ambitiously expanded a 300-billion-yuan equipment trade-in program aimed at modernizing industrial machinery, the stimulus has failed to reignite the explosive demand for iron ore and steel that marked previous decades. High-tech manufacturing output rose by 9.5% year-on-year in the first quarter of 2025, but the property sector—a crucial driver of steel consumption—continues to falter. Housing starts plunged by 24.27%, and property investments declined by 10.3% in the same period, dragging crude steel output down by 9.2% in June.
Construction steel demand still accounts for 55% of China's total steel usage, but the structural decline in the housing market and the government's firm stance that "housing is for living, not for speculation" have crystallized a long-term shift. Interestingly, despite weak domestic demand, Chinese port inventories of iron ore surged to 146.85 million tons by late 2024, with prices stabilizing between $95 and $100 per ton. This paradox is explained by strategic stockpiling amid fears of oversupply from major exporters like Australia and Brazil.
Looking ahead, China's 15th Five-Year Plan emphasizes a green transition in steel production, targeting 15–20 million tonnes of low-carbon steel annually by 2030 through hydrogen-based direct reduced iron (H2-DRI) and electric arc furnace (EAF) processes. The country aims to increase EAF steel production to 15% by 2025, which favors scrap steel over iron ore, signaling a potential structural decline in traditional iron ore demand. This evolution presents significant risks for commodity investors, highlighting the importance of positioning in resilient companies like Fortescue, Australia's lowest-cost producer with EBITDA margins above 35%, Rio Tinto, which has diversified through lithium acquisitions and automation, and BHP Group, known for disciplined capital allocation and copper ventures that buffer iron ore volatility.
Adding to the strategic resource narrative, China has unveiled a massive zirconium reserve in the northern Tarim Basin, Xinjiang province. This discovery, reportedly four times larger than previous holdings, could have profound implications for global technology and geopolitical dynamics. Zirconium, the 18th most abundant element in the Earth's crust, is challenging to extract because it is chemically bound in minerals like zircon, primarily sourced from coastal sands worldwide.
The Tarim Basin deposit boasts an average grade exceeding 0.2% zircon and can be extracted through less energy-intensive processes, potentially reducing costs and environmental impacts. Zirconium is indispensable in hypersonic and nuclear technologies due to its corrosion resistance, heat tolerance, and minimal neutron absorption, making it ideal for nuclear fuel rod cladding and aerospace components.
China’s newfound reserve enhances its standing in the global hypersonic and missile technology race, especially amid intensifying efforts by the United States and Russia. The discovery also challenges prior assumptions about zirconium's geographical distribution, opening possibilities for exploring similar land-based deposits globally. Strategically, control over such a critical resource could influence international markets and alliances, as countries dependent on zirconium may seek stronger ties with China.
Economically, the reserve could lower zirconium prices if extraction becomes more efficient, benefiting industries reliant on the metal while raising concerns about supply concentration. This development may spur other nations to invest in geological research and mining technologies to diversify global zirconium supplies.
Collectively, these stories underscore a global economy in flux—where technological advances, geopolitical shifts, environmental imperatives, and resource discoveries intersect. Investors and governments must navigate these complexities with prudence and adaptability, recognizing that the future of commodities like rare earths, iron ore, and zirconium will be shaped not just by supply and demand but by innovation, policy, and strategic foresight.
As Rick Rule aptly puts it, "Technology allows individual human beings with creativity, tenacity, and hard work to fund our collective stupidity." In a world where resource control can tilt geopolitical balances and where economic signals remain uncertain, that blend of creativity and tenacity might just be the key to thriving in the years ahead.
