A Trump administration is good news for miners, with support expected for sectors including nuclear and critical minerals.
Donald Trump took victory in this week’s US presidential election in a landslide win with nearly 300 votes so far to Kamala Harris’ 226 votes.
The New York Times forecasts Trump, who will become the country’s 47th President and is the oldest at 78, will take 312 votes in total.
The Republican Party has also taken control of the US Senate, while the House remains undecided.
Trump labelled the unprecedented win “the greatest political movement of all time”.
“There’s never been anything like this in this country, and now it’s going to reach a new level of importance because we’re going to help our country heal,” he said in his victory speech.
Australian Prime Minister Anthony Albanese congratulated Trump on the victory, saying the election of the President of the United States is always an important moment for the world, for the Indo-Pacific region and for Australia.
“Our government will work closely with the new Trump administration to realise the benefits of our strong economic partnership,” he said.
“The United States has long played a leadership role in the stability and security of the Indo-Pacific. Australia will strive to strengthen the co-operation between our two nations in the region.”
In terms of impact on equity markets, Saxo chief macro strategist John Hardy says it is critical to continue to track the US treasury market, and whether bond yields continue to ratchet higher.
“At some point, higher yields could begin to act as a headwind on equity prices, especially if they threaten to rise back to the highest levels seen last year (above 5% in the 10-year treasury yield),” he says.
“Further, how will the US Federal Reserve behave now that the US election outcome is known?”
Hardy says any inflationary resurgence will remove further policy easing expectations.
“The Fed meets tomorrow and is expected to cut the policy rate by 0.25%, but could soften up its commitment to further easing, even without directly referring to Trump and his administration’s likely agenda,” he says.
US markets rallied following the early call on the election, however, Australia’s S&P/ASX 200 was down 32.20 points, or 0.39%, at 8,167.30 points at 12.44pm AEDT on Thursday (7 November).
Eight of the 11 sectors, including materials, were in the red. However, energy and industrials advanced 1.11% and 0.32%, respectively.
On the mining front, Paul Harbidge, CEO of copper explorer Faraday Copper (TSX:FDY), says a Trump-led US government is good news for the mining sector.
“I think it’s going to be very interesting, as we’ve seen on the back of the US elections over the last 24 hours that the Trump administration is going to come in,” he tells Mining.com.au.
“I know some of his comments have been ‘drill, baby, drill’. So that should be good for the extractive industry. He’s talking about reducing the bureaucracy.”
Faraday is advancing the 73km2 Copper Creek Project in Arizona, which has combined open pit and underground measured and indicated resources totalling 421.9 million tonnes @ 0.45% for 4.2 billion pounds of contained copper.
One beneficiary of a Trump win will be copper, which is not currently on the US Critical Minerals List.
“There’s a bill due to go through Congress that would look to bring copper onto the critical metals list,” Harbidge explains.
“Because as far as the US Geological Survey (USGS), copper wasn’t on there, because the US still supplies an adequate percentage of copper in country. That’s based on today’s needs. It’s not forward-looking.
“So there’s a bill to bring copper in, and that could unlock significant funding as well as bringing in permitting reform.
“I think more recently, Biden was very much about environmental and not wanting mining, but due to all the geopolitical risk we’ve seen around the world I think you’ve seen both parties coming together on critical metals and supply chains.
“But I think with the Trump administration, there should be improved catalysts and energy into that.”
In 2020 during his previous term as President, Trump issued an executive order declaring a national emergency in the mining industry aimed at cutting the country’s dependence on China and strengthening the US supply chain.
According to a review in the USGS Mineral Commodity Summaries 2024, the US was 100% net import reliant for 12 of the 50 critical minerals on the 2022 Critical Minerals List and more than 50% net import reliant for an additional 29.
Meanwhile, on the nuclear front there has been support from both sides for growing the industry.
S&P Global says there has been support during two administrations now for federal funding for advanced nuclear reactor demonstration projects, a more independent nuclear fuel cycle free from Russian dominance, and regulatory streamlining.
“The Inflation Reduction Act included significant credits for existing and new nuclear units, and congressional support for them remains relatively strong,” S&P says.
“Republicans in Congress are among the biggest supporters of a ban on Russian-enriched uranium passed this year that takes effect fully in 2028.”
Write to Angela East at Mining.com.au
Images: iStock
