For decades, Washington talked about supply chain resilience. But talk is cheap, and there was little done to achieve it.
Critical minerals strategies gathered dust. Manufacturing know-how drifted offshore. And with respect to copper — the backbone of every military system, data center, and power grid in America — China quietly built the vast majority of the world’s modern smelting capacity. The United States, meanwhile, sat back and watched, relying on just two aging facilities, with one dating back to 1910.
That era of strategic neglect may finally be ending. And the vehicle for change is as much diplomatic as it is industrial.
MICK MULVANEY — THE COPPER CRISIS: OVERCAPACITY IN CHINA AND UNDERINVESTMENT IN AMERICA
Last October in Tokyo, President Donald Trump and Japanese Prime Minister Sanae Takaichi signed a landmark agreement formalizing Japan’s $550 billion investment commitment to the U.S. It targeted critical minerals, energy infrastructure, semiconductors, and artificial intelligence. Among the first designated projects: an American-built copper smelter in Arizona, built by Falcon Copper.
Engineered with Japanese expertise, financed with Japanese capital, and designed to produce the copper cathode the U.S. urgently needs, it is the first new primary copper smelter to be developed in America in a generation.
The copper situation in America is not an abstraction. Since 2000, China has accounted for 75% of all global smelter capacity growth — not through market competition, but through deliberate industrial policy. Beijing oversupplied global smelting capacity, driving treatment and refining costs below sustainability thresholds for Western operators. That effectively compelled every copper concentrate producer in the world to ship to China. Today, Chinese smelters account for over 50% of global refined copper production, a share that continues to grow.
The result is that China now controls the copper cathode market. And copper cathode is not a luxury good. It takes roughly 45,000 tons of it to build a single data center. AI requires it, and every tank, ship, aircraft, ammunition round, and communications system depends on it. Ceding dominance in this space to an adversary means allowing China to prevail in the next great-power conflict.
The West no longer needs to speculate about China’s willingness to weaponize its position. Beginning in 2023, Beijing imposed sweeping export controls on gallium, germanium, graphite, and antimony — minerals critical to semiconductors, defense systems, and advanced manufacturing — as a direct retaliation for U.S. technology export restrictions. Those controls have since escalated to outright bans. There is no strategic reason to believe copper cathode would be treated differently in a moment of confrontation.
What’s compelling about the investment framework for the Arizona smelter, beyond the engineering and the scale, is the Japan dimension, and what it reveals about the maturity of the alliance.
Tokyo did not commit to this framework out of charity. Japan itself depends heavily on China for refined copper and critical minerals, and learned the hard way that supply chain dependence can be weaponized overnight. A U.S.-based smelting capacity built with Japanese engineering and capital solves Japan’s diversification problem while solving America’s industrial gap. That is the definition of a durable alliance: mutual interest expressed through mutual investment.
This is also how foreign direct investment should work. Rather than just passive capital flows seeking yield, the $550 billion framework represents strategic capital, deployed in alignment with shared geopolitical objectives, anchored in allied relationships, and structured to reshore industrial capability that both nations need.
Critics of industrial policy sometimes frame reshoring as economic misallocation. The copper case shows how this need not be true.
Projections show global copper demand could surge 75% by 2050, reaching 56 million tons annually. AI infrastructure and the data center buildout are accelerating that curve, not flattening it. Unlike rare earths, copper cannot be easily substituted nor produced as a stand-alone product. Copper is almost always a coproduct of large-scale base metal mining, meaning supply cannot simply be switched on in response to a crisis.
There is also a broader point Washington has been slow to absorb. Most rare earths and strategic byproducts — germanium, gallium, and others that policymakers have fixated on — are extracted as coproducts of base metal mining. Without the copper infrastructure to justify the capital expenditure, the byproducts cannot be economically recovered.
We have, at long last, an administration that is genuinely pro-mining, a diplomatic framework that has attracted serious allied capital, and a private-sector team with the credibility to execute. The engineering partners have built the last two copper smelters on Earth. The upstream mining portfolio spans Alaska, Nevada, Arizona, and Montana.
OPINION — THE CHINA FACTOR: TRUMP’S IRAN STRIKES THREATEN TO RESHAPE GLOBAL ORDER
The conditions for success are present. What remains to be seen is whether the U.S. has the will to go the distance in policy, in permitting, and in the sustained attention of a foreign policy community that must recognize copper for the strategic asset it is.
The West has the engineering, the allies, the capital framework, and, now, the urgency to reestablish our own copper independence. We need to make the most of it.
Mick Mulvaney is the former White House chief of staff and a former congressman from South Carolina.