Podcast Summary: "Humanoids’ Insatiable Hunger for Minerals"

Thoughts on the Market
Host: Morgan Stanley
Release Date: June 25, 2025

Introduction to Critical Minerals and Humanoid Robotics

In the June 25, 2025 episode of Thoughts on the Market, Rahul Anant, Head of Morgan Stanley's Australia Materials Research Team, delves into the essential role of critical minerals in the burgeoning field of humanoid robotics. Highlighting the projected integration of humanoid robots into daily life, Anant emphasizes the significant demand these advanced machines will place on specific minerals.

"Humanoid robots will soon become an integral part of our daily lives," Anant states at [00:45], setting the stage for a comprehensive analysis of the mineral requirements essential for their development.

Projected Market Growth and Mineral Demand

Anant references discussions from colleagues Adam Jonas and Sheng Zhong, outlining Morgan Stanley Research's forecast that the humanoid robot market will exceed a billion units by 2050, generating nearly $5 trillion in annual revenue. This explosive growth is set to dramatically increase the demand for critical minerals, particularly rare earths, lithium, copper, nickel, graphite, and cobalt.

Key Mineral Requirements per Humanoid Robot:

• Rare Earths: ~1 kilogram
• Lithium: ~2 kilograms
• Copper: ~6.5 kilograms
• Nickel: ~1.5 kilograms
• Graphite: ~3 kilograms
• Cobalt: ~200 grams

"The market, from a cumulative standpoint by the year 2050, could be to the tune of about US$800 billion," Anant notes at [02:30], underscoring the extensive financial and material investment required.

Supply Chain Dominance and Geopolitical Concerns

A significant portion of the episode addresses the current dominance of China in the supply of critical minerals. Anant outlines China's control over:

• Rare Earths: 88%
• Graphite Supply: 93%
• Refined Lithium Supply: 75%

This concentration poses substantial risks for the Western world, especially in light of recent geopolitical tensions.

"China recently placed controls on seven heavy railroads and permanent magnet exports in response to tariff announcements made by the US," Anant explains at [03:15], highlighting the fragility of the existing supply chain.

Challenges in Diversifying Mineral Supply

The episode further explores the challenges in diversifying the supply of critical minerals. Anant points out the lengthy and complex process of developing new mining operations in the Western world, citing an average of 18 years to bring a new mine online—a figure that has increased by nearly 50% over the past decade due to stringent approval processes and extensive exploration requirements.

"The supply chain now takes circa 18 years to get a new mine online," he states at [03:45], emphasizing the urgency of addressing these bottlenecks to meet future demand.

Projected Supply Deficits by 2040

Looking ahead to 2040, Anant projects significant supply deficits in critical minerals:

• Rare Earths: 26% deficit
• Lithium: Approximately 80% deficit

These shortages underscore the imperative for immediate action to secure mineral supplies and mitigate potential economic and technological setbacks.

"By 2040, we're expecting that the rare earth market would be in a 26% deficit and lithium could be in a deficit close to 80%," Anant warns at [04:00], stressing the critical nature of proactive measures.

Strategic Recommendations and Future Outlook

In response to these challenges, Anant and the Global Materials Team, led by the Australian Materials Team, have identified 34 global stocks poised to capitalize on the rare earths, lithium, and rare earth magnet sectors. Additionally, he discusses the ongoing negotiations between the US and China, noting the lack of agreement on critical military-use rare earth magnets and exports—a key leverage point in future trade deals.

"This remains an evolving situation, and this is something that we're going to continue monitoring," Anant concludes at [04:10], indicating Morgan Stanley's commitment to providing up-to-date analyses as the geopolitical landscape evolves.

Conclusion

Rahul Anant's in-depth analysis in this episode of Thoughts on the Market highlights the crucial intersection between technological advancement in humanoid robotics and the availability of critical minerals. With China's dominance in the mineral supply chain and the significant projected deficits looming by 2040, the need for strategic diversification and expedited mining processes in the Western world is more pressing than ever.

For investors and stakeholders, understanding these dynamics is essential for navigating the future of both robotics and the global materials market.

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