With growing intensity, critical minerals have become a global geopolitical battleground, particularly for the United States and China. US President Donald Trump signed a presidential determination on July 30, authorising export restrictions on recoverable critical minerals under the Defense Production Act. However, the more binding constraint on supply is operational and that is the layer brokers sit on.
For example, just a few days ago, Codelco, the Chilean state miner, halted development at the world’s largest underground copper mine. The Andes Norte project inside the colossal El Teniente operation was stopped after a six month study identified “an emerging seismic phenomenon” linked to the greater depth of the works. A union leader has put the pause at as long as two years. The suspension landed days after Chile posted second-quarter output of 1.27 million tonnes, down by nearly 8% year on year and its weakest April-to-June result in two decades.
So this is what critical minerals supply insecurity often looks like. Not a policy document - a geotechnical problem, a storm, an ore grade, a plant that cannot run.
Michael Beaumont (pictured), account engineering group manager and senior advisor at global commercial property insurer FM in Australia, has spent more than three decades in mining risk engineering.
“The one question I’d encourage brokers to ask is: ‘If this critical asset was unavailable for an extended period, what would it do to the business?’” Beaumont said.
Not a week of lost production, he said, but a month or a year - and what that does to project economics, cash flow, customer commitments and shareholder expectations. How much of it is insurable and how much the business simply absorbs.
Two features of this cycle make the question harder than in previous booms. The first is who the insured now is: governments are taking equity. Canada’s C$2 billion Critical Minerals Sovereign Fund makes direct equity investments and issues loan guarantees, while the United States and Australia had committed a combined US$3.5 billion by April 2026 under their October 2025 framework. Sovereign co-investment changes the disclosure environment, the political consequence of a loss and the pressure to restart. The second is that much of the buildout is midstream. The UK targets 20% of demand from recycling by 2035 and New Zealand has named 37 critical minerals against a goal of doubling exports. Recycling plants, separation circuits and refineries are process risk – chemical, thermal, combustible - not open-pit risk.
Beaumont is deliberately careful about the geopolitics, which sits outside his engineering remit. What he will say is that the strategic weight attached to these materials changes the consequences of a physical loss.
“In many cases, the geopolitical importance of critical minerals actually increases the importance of operational resilience because prolonged interruptions can have consequences far beyond the individual operation," he said.
The data supports him. The International Energy Agency (IEA) found the top three refining nations’ average market share across copper, lithium, nickel, cobalt, graphite and rare earths is about 86% according to 2024 figures. The IEA's Global Critical Minerals Outlook 2026 estimated full implementation of China’s October 2025 export controls could put roughly US$6.5 trillion a year of downstream production at risk. In a chain that concentrated, one plant outage is a market event.
“The risk profile becomes less about tonnes produced and more about supply-chain dependency, speed to market, capital deployment and the consequences of prolonged disruption," said Beaumont.
The loss data is unglamorous and that is the point. Beaumont’s team analysed more than US$2 billion of mining losses over two decades.
“One of the strongest findings from our mining loss work is that fire continues to be the largest single source of loss value in the industry - currently sitting at 32% of the total gross loss," he said.
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Most of the decisions setting that severity are made before commissioning. Transformer siting, separation between high-value assets, combustible loading, battery and charging protection and firefighting access are cheap on a drawing and expensive once concrete is poured. Loss work spanning a decade by another FM Aussie, account engineering group manager Matt Pilgrim, found only about 25% of gross loss value came from physical damage or equipment failure. The other 75% was business interruption.
That split points at specific products and they are not the ones on a standard property renewal. Delay in start-up (DSU) cover - also written as advance loss of profits (ALOP) - responds to revenue lost when a construction incident pushes back commissioning. It has to be structured before the build, with an indemnity period long enough to cover procurement of a transformer or mill component that may take a year to replace. Contingent business interruption, which covers loss caused by damage at a supplier’s or customer’s premises rather than the insured’s own, is the other gap where one refinery serves many buyers.
The market is inviting the conversation. Gallagher’s Global Mining Market Review 2026 reported new capacity, broader coverage and higher limits, while noting aggregate mining loss ratios have been poor for three years. Willis has made a parallel argument in digital infrastructure: Clients are over-insuring data centres and resilience built in early cuts real exposure more than extra limit does. The same logic applies to a refinery. A soft market is the cheapest moment to buy limit. It is also the easiest moment for a broker to stop asking what recovery looks like.
