• Resource nationalism investing targets companies controlling critical materials in stable jurisdictions.
• Soaring demand for lithium, rare earths, and water rights boosts the value of strategically positioned companies.
• Investing in domestic resources provides a strategic defense against global supply chain disruptions.
• The portfolio focuses on companies with irreplaceable assets, including critical minerals and strategic water rights.

Why Bringing It All Back Home Could Be a Smart Move

For decades, we were told a rather lovely story. The world was one big, happy marketplace. Need something? Just order it from halfway across the globe, it’ll be cheaper and arrive just in time. It was a beautiful theory, and for a while, it seemed to work. Then, the music stopped. A global pandemic and a few geopolitical squabbles later, we all looked around and realised our supply chains were about as resilient as a chocolate teapot.

Suddenly, relying on potentially unfriendly nations for the materials that power our entire way of life seemed, well, a bit daft. And so, the great unwinding begins. I’m talking about resource nationalism, a rather grand term for a simple idea. Countries are deciding that controlling their own essential resources, right here at home, is more important than saving a few quid on shipping. To me, this isn't just a political shift, it’s a profound change in the investment landscape.

The New Gatekeepers of the Economy

Think about it. If you’re trying to build a secure, domestic supply chain for, say, electric cars, you need lithium. Lots of it. You can’t just magic it out of thin air. You need companies that are already digging it up in politically stable, friendly places. Suddenly, a company like Albemarle, with its vast operations in sensible jurisdictions, doesn't just look like a miner. It looks like a strategic national asset.

The same goes for rare earth elements, the secret sauce in everything from iPhones to fighter jets. For years, China has had a near monopoly on processing them. Now, as the West scrambles to catch up, a company like MP Materials, operating the only integrated rare earth facility in North America, finds itself in an incredibly powerful position. It’s no longer just a company, it’s a cornerstone of American industrial strategy. These businesses control finite, irreplaceable assets in the right postcodes, a combination that I think creates a formidable competitive advantage.

And Don't Forget the Water

Beyond the shiny metals that grab the headlines, there's an even more fundamental resource, water. In places like the American West, where populations are growing but the rain isn't, owning water rights is like owning the ultimate monopoly. You can’t innovate your way out of thirst. Companies that control this lifeblood possess an asset whose value is almost certain to increase as scarcity bites harder. It’s the kind of simple, brutal logic that often makes for a compelling long term case, though nothing is ever guaranteed.

A Necessary Reality Check

Now, let’s not get carried away. Investing in companies that dig things out of the ground comes with its own set of headaches. Commodity prices can swing about wildly, a mine can run into technical problems, and governments, even friendly ones, can change tax laws or environmental rules. These are not "get rich quick" schemes, and anyone who tells you otherwise is selling something. The risks are real and need to be understood.

However, the fundamental trend seems undeniable. The move towards securing domestic supply chains is a powerful, long term tailwind. It’s driven by a hard-won lesson in strategic vulnerability that I don’t think politicians will forget quickly. When you add the soaring demand from the green energy transition, you have a compelling confluence of factors. This collection of strategically positioned companies, the modern gatekeepers of essential materials, is the core idea behind an investment theme like the Resource Sovereignty. It’s a bet not on a single commodity, but on the broader, structural shift towards bringing it all back home.

Deep Dive

Market & Opportunity

• China controls approximately 85% of the global refining capacity for rare earth elements.
• There is rising demand for critical materials such as lithium, rare earths, copper, and water rights.
• The trend of resource nationalism involves countries prioritizing domestic control over resources to defend against international supply disruptions.
• The energy transition, including electric vehicles and renewable infrastructure, requires substantial quantities of critical materials.
• Population growth in water-scarce regions creates sustained demand for water infrastructure and rights.

Key Companies

• MP Materials Corp. (MP): Operates the only integrated rare earth mining and processing facility in North America at the Mountain Pass mine in California, positioning it as a key part of the U.S. strategy to reduce dependence on Chinese processing.
• Albemarle Corporation (ALB): A major global lithium producer with significant operations in stable, mining-friendly jurisdictions like Chile and Australia, benefiting from accelerating electric vehicle adoption.
• Lithium Americas Corp. (LAC): Developing the Thacker Pass project in Nevada, which is one of the world's largest known lithium deposits and is considered strategically invaluable for building a domestic U.S. electric vehicle supply chain.

Primary Risk Factors

• Commodity prices are volatile.
• Mining operations face operational challenges that can impact returns.
• Evolving environmental regulations can affect extraction costs and project timelines.
• Political risks, such as changes in government policy or taxation, can impact profitability even in stable jurisdictions.
• Technological advances could reduce demand for certain materials.
• Concentration risk exists due to heavy dependence on specific deposits or regions.

Growth Catalysts

• Government policies, including tax incentives and regulatory preferences, are increasingly favoring domestic producers to ensure supply chain security.
• The global energy transition is a significant demand driver for critical materials needed for electric vehicles, renewable energy, and grid storage.
• Demographic trends, particularly population growth in water-scarce areas, increase the strategic value of water rights and infrastructure.
• The fundamental shift by nations toward securing domestic supply chains is a durable, long-term trend.