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Bear Market
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Please read important information at the end of this program. Recorded on 4/3/2025.
[Ariana Chiu speaking throughout]
What's the key to U.S. energy security?
For generations, an automatic, two-word answer might have been: oil production.
Lower third:
Ariana Chiu
Wealth Management Analyst
Chief Investment Office
Merrill and Bank of America Private Bank
Yet while much of the world still runs on oil, "energy security" now also means reliable supplies of metals and minerals needed for the next great boom in U.S. infrastructure, meeting the growing resource demands of artificial intelligence data centers, military technologies, electric vehicles and more.
On-Screen Copy:
[Half-screen Bullets]
Minerals for batteries providing backup power:
- Cobalt
- Lithium
- Nickel
- And others
Minerals for advanced U.S. defense systems:
- Gallium
- Titanium
- Tungsten
- And others
Lower third:
Data center construction is now four times higher than in 2020.
Source: Census Bureau. Data through 2024 as of February 3, 2025.
As one example: data center construction is now more than four times higher than in 2020,Footnote 1 and requires vast amounts of already-tight copper supplies; not to mention cobalt, lithium, nickel and other materials for batteries providing backup power. Meanwhile, advanced U.S. defense systems require minerals such as gallium, titanium, and tungsten. The list goes on.
A looming question is: who's going to supply these crucial commodities? Despite vast natural resources, the U.S. — the world's largest oil producerFootnote 2 — does little mining.
Governmental regulatory challenges and environmental concerns have historically led to the offshoring of mineral supply chains.
Lower third:
U.S. imports all or a majority of its critical mineral commodities.
For 40 of the 50 mineral commodities that are considered critical by the government, the U.S. imports all or a majority of what it consumes. Meanwhile, China not only leads in producing 30 critical minerals;Footnote 3 it also refines more than 90% of the world's graphite and rare earths, 77% of cobalt and 65% of lithium, to name a few.Footnote 4
Amid rising U.S.-China tensions, securing critical minerals will likely require diversifying supply chains and a greater commitment to expanding mining and refining capabilities at home.
What does all this mean for investors?
Lower third:
Demand for commodities could offer potential long-term growth for investors.
The coming buildout of U.S. infrastructure seems unstoppable. Resilient infrastructure remains a key CIO theme, and investors may explore exposure to growth in electrical equipment, power generation, and transmission and distribution. Demand for the commodities critical to data centers, the national grid, semiconductors, and more appears positioned for long-term growth.
Thanks for watching, and that's the Market Decode.
On-screen disclaimers:
Important Disclosures
Sources: From CIO Investment Insights, March 2025
Footnote 1 Census Bureau. Data through 2024 as of February 3, 2025.
Footnote 2 U.S. Energy Information Administration, March 2024.
Footnote 3 International Energy Agency, as of October 2024.
Footnote 4 International Energy Agency. Data refers to 2023. As of February 2025.
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[End of transcript]
Energy security today depends on much more than oil. Everything from military technologies and green energy solutions to batteries, semiconductors and the sophisticated data centers required to power artificial intelligence relies on having a plentiful supply of critical minerals and metals. Think copper, cobalt, lithium, nickel and more. While the U.S. has some of these natural resources in abundance, it hasn't prioritized mining them, due in part to governmental regulation and environmental concerns.
"For 40 of the 50 mineral commodities that are considered critical by the government, the U.S. imports all or a majority of what it consumes," says Ariana Chiu, wealth management analyst in the Chief Investment Office (CIO) for Merrill and Bank of America Private Bank. "Rising geopolitical tensions may lead to a rethinking of supply chains and a greater commitment to expanding mining and refining capabilities at home," she adds.
In the video above, Chiu looks at what the growing importance of minerals, metals and other commodities might mean for long-term investors as infrastructure needs expand.