The prospect of another US-China trade war on Donald Trump’s return to the White House is largely viewed through the prism of what pain the US can inflict on Beijing, its long-term threat to world supremacy.

Trump’s pre-election proposal for 10-20% baseline tariffs on all imports but a 60% tariff for China might well have been bluff and bluster by a guy who fancies himself as a dealmaker on the world stage.

Bluff and bluster is suggested there because it is simply not possible for the US to get by without a full suite of critical materials in which China dominates the supply, some to the extent that a simple “no more for you” order from Beijing in retaliation for 60% tariffs would have devastating economic and defence implications for the US.

The Biden administration put America on a pathway to building its own critical materials supply chain through the Inflation Reduction Act and other executive orders. But the day when the US is not dependent on China for critical materials is decades off, at the very least.

China has shown a willingness in the past to use its critical materials dominance as a geopolitical weapon. In 2010 it shut off supplies of rare earths to Japan over a territorial dispute in the east China Sea.

If push comes to shove on the arrival of tariff man Trump in the White House, Beijing could well make life hard for the US in terms of supplies of rare earths. Last year it lent that way by banning the export of its rare earths processing and equipment IP.

China also found reason last year to put export controls in place over the critical chipmaking ingredients of gallium and germanium. They are another two where a complete ban on exports to the US would hurt the US more than the Chinese economy.

It can be said that export restrictions already in place across critical materials is simply a case of China putting the supply to its own industries first and foremost. There is some truth in that, just as there is some truth that Beijing saw the return of Trump coming.

Antimony:

The most recent example of China placing export controls on a critical material was on August 14 when it decided to place antimony in its processed form under the measure, ostensibly due to national security concerns no less.

The US has not mined let alone processed antimony since the closure of the Stibnite gold/antimony mine in Idaho in the mid-1990s. A bit perilous really given antimony’s many applications, including in military hardware and in high-efficiency solar panels.

It should be no surprise then that both the US Department of Defence and the export credit agency bank EXIM have extended grants and loan support of more than $US1 billion for the Stibnite mine to be brought back in to production in a hurry.

But the mine will only be a small part of the solution to the US’s problem of over-reliance on China for supplies, and first production is years away.

So if Beijing doesn’t hit back at proposed 60% tariffs on its exports by banning rare earths, gallium and/or geranium exports to the US in retaliation, it could be that antimony could become the initial weapon of choice.

That’s if Trump does in fact take China on in a trade war that will make the previous one in 2018 look like a sideshow.

Larvotto:

What is more certain is that the August 14 export controls announcement by Beijing has put a rocket under antinomy prices.

Trading around $US12,000/t towards the back end of last year, prices have taken off, reaching a record $US37,750/t this week.

A bunch of ASX juniors with existing antimony exposure – or a newly adopted focus on the metal because of the surging  price – have been enjoying something of a boomlet as a result.

Larvotto (ASX:LRV) has been leading the way after what has proved to have been the incredibly fortuitous acquisition of the historic Hillgrove antimony-gold project near Armidale in northern NSW from the administrator of Red River Resources for a knockdown price in December last year.

It was a 14c stock when Beijing announced the export controls on antimony. The stock has since powered up to 47.5c for a market cap of $160 million.

Before its collapse due to issues at its Queensland zinc operation, Red River had spent $20m doing the early work on returning Hillgrove, with its historic $200m of sunk capital, back into production.

Larvotto released a pre-feasibility study a couple of weeks ago in to the return which envisaged first ore early in 2026 after capex of $73m for 80,000oz per annum of gold equivalent (5,500tpa of antimony or 7% of world production).

Net present value using $US2,000oz gold and $US15,000/t antimony prices was put at $157m post-tax. Plug in $US2,700/oz gold and $US30,500/t antimony and the NPV takes off to $383m, and likely more than $500m if the current spot antinomy price is used.

Juniors:

Ever fleet of foot micro-cap juniors have been joining the antimony charge by taking up ground positions around Hillgrove and elsewhere in the New England orogen where there is a long but broken history of antimony mining.

George Bauk’s Thunderbird Resources (ASX:THB) has just added its name to the list of juniors moving in to the region when it took up a big ground position to the north of the Hillgrove tenements.

Bauk said the company remained committed to uranium exploration in Canada and to copper in both Canada and Peru through its stake in ASX-listed Firetail (ASX:FTL).

Apart from anything else, the antimony pick-up means that the gap in newsflow from the uranium hunt in Canada during the northern hemisphere winter can be filled by newsflow from exploration work on the new antimony ground.

Bauk said the structures that host Hillgrove’s deposits potentially extend north-west in to Thunderbird’s newly acquired tenements which host historical prospects with high-grade antimony hits, as well as gold.

Thunderbird last traded at 1.8c for a market cap of less than $6m so leverage is extreme to antimony exploration success, or uranium/copper exploration success.

The former WA potash hopeful Trigg (ASX:TMG) was an early mover on the emerging antimony thematic and has picked up a bunch of high-grade historic prospects to the north and west of Hillgrove, and elsewhere in the New England orogen.

It last traded at 3.7c for a $23.7m market cap. Back on August 14 when the news on Beijing’s export control intention was announced it was a 0.9c stock.

Don’t forget Victoria:

Victoria is home to Australia’s only antimony production at the Costerfield gold-antimony operation, owned by Canada’s Mandalay (MND).

Costerfield sits in the Melbourne geological structural zone where high-grade gold and antimony coexist geologically at a number of locations.

One of those is Nagambie’s (ASX:NAG) namesake mine, 45km to the east of Costerfield. Early the week the company announced an upgraded resource in response to the elevated gold price and bumper antimony.

On a gold equivalent basis , the resource estimate was upgraded to 322,000oz at a grade of 18.6g/t gold equivalent (82% attributable to antimony). Nagambie traded at 1.9c on Thursday. On August 14 it was a 1c stock.

Meanwhile, antimony also figures prominently at Southern Cross Gold’s (ASX:SXG) Sunday Creek project about 70km to the south and just off the Hume Highway on Melbourne’s doorstep.

The stock has been a big performer this year initially in response to record gold prices. But antimony looks to have given the stock a second wind despite gold’s recent weakness, carrying its market cap to $600m.

The company announced an exploration target in January of 1.28M oz of gold and 62,800t of antimony at the high end. More increases and an eventual maiden resource estimate of serious scale are expected given ongoing drilling results.