Strategic Stockpiles, Nuclear Power and What They Mean for the ARU Reserve

This week, the shift toward physical resource security became more visible.

Copper strengthened as approximately 700 workers at Antofagasta's Centinela mine in Chile went on strike, adding another near-term reminder that physical supply can be disrupted faster than new production can be brought online.

Europe selected another 46 strategic raw-material projects requiring approximately €21.1 billion of investment. In Australia, construction began on Arafura's Nolans rare-earth project, moving another government-backed strategic-material project from financing toward actual physical infrastructure.

The US is also moving toward physical inventory through Project Vault, its $12 billion critical-minerals reserve initiative, while defence companies have warned that government procurement could itself compete for already scarce supply.

India is preparing a critical-minerals stockpiling policy of its own.

At the same time, Google's latest agreements with Constellation Energy include a 20-year commitment supporting 890 MW of additional nuclear capacity as the physical requirements behind AI continue moving upstream into energy infrastructure.

In this week's Lanthic Physical Economy Brief, we look more closely at the supply, financing and geopolitical implications behind these developments.

For ARU, the question is slightly different:

What happens when governments and companies begin treating access to physical resources as something worth securing years in advance?

Strategic stockpiles make scarcity explicit

Strategic reserves are not new.

What is changing is the range of materials governments increasingly consider important enough to hold.

Project Vault is intended to create a US inventory of critical minerals to protect domestic industry from future disruption.

India is preparing a similar stockpiling framework.

Europe is approaching the same challenge from another direction by directing capital toward domestic extraction, processing and recycling capacity.

Australia's Nolans project provides an example of what happens when that strategy progresses from policy and financing into construction.

But stockpiling introduces an important dynamic.

A government trying to protect itself from future scarcity becomes another buyer in today's physical market.

That is why US defence groups have raised concerns that strategic procurement could compete with industrial buyers for already constrained supply.

For ARU, this reinforces an important distinction:

Strategic importance can strengthen long-term demand for a resource, but strategic importance alone does not make an asset suitable for a reserve.

Not every critical material belongs in a reserve

There are dozens of materials considered critical to modern industry.

That does not mean a diversified reserve should simply hold all of them.

Reserve construction introduces a different set of requirements.

A material can be economically essential and still have:

• limited liquidity;
• difficult or specialised storage requirements;
• concentrated pricing;
• restricted physical transferability;
• highly concentrated supply;
• or a market too small to support meaningful reserve allocation.

This is why ARU's reserve methodology needs to distinguish between physical scarcity and reserve suitability.

The strongest reserve assets are not necessarily those with the most dramatic supply story.

They are those where scarcity can be combined with sufficient market depth, transparent pricing, secure custody and practical physical ownership.

That balance becomes increasingly important as governments themselves begin accumulating strategic inventory.

AI is making the physical layer harder to ignore

Google's latest nuclear agreements illustrate the same shift from another direction.

The agreements cover 3.59 GW of electricity in total.

Importantly, this does not mean 3.59 GW of new nuclear generation.

The agreements include a 20-year commitment supporting approximately 890 MW of additional nuclear capacity through upgrades at existing US reactors.

A separate 15-year agreement covers approximately 2,700 MW from Constellation's existing fleet.

The significance for ARU is not simply nuclear power.

It is what happens as digital growth moves further upstream.

AI requires data centres.

Data centres require power.

Power requires generation, transmission and grid infrastructure.

That infrastructure requires physical materials.

Copper, silver, uranium and a wider range of specialised metals increasingly sit underneath what appears, at the surface, to be a digital economy.

This is one reason we continue to view the physical economy as relevant to reserve construction.

The world may become more digital.

The infrastructure enabling it does not.

The weighting question becomes more important

This week's developments also reinforce why diversification cannot simply mean equal weighting.

A strategic government stockpile may acquire a material because national security requires it regardless of short-term liquidity.

A reserve has different constraints.

Liquidity, volatility, storage, pricing transparency, geographic concentration, custody and the ability to acquire or redeem physical material all matter alongside long-term scarcity.

That means the ARU reserve should not simply follow whichever commodities currently receive the most political attention.

The objective is to build exposure across different parts of the physical economy while maintaining a reserve that remains transparent, physically backed and practically manageable.

Precious metals can provide a more established monetary and liquidity foundation.

Industrial metals can provide exposure to the infrastructure and productive economy.

Strategic materials can add exposure to resources whose importance is increasing across technology, energy, defence and advanced manufacturing.

The weighting between them is where reserve design becomes important.

Access improves. Dependence remains.

Europe's discussions with China this week provide another useful distinction.

China said it was willing to continue facilitating export licences for rare earths and permanent magnets to European companies through its fast-track mechanism.

That may improve near-term access.

But easier licensing does not remove Europe's underlying dependence on concentrated mining, refining, separation and magnet-production capacity.

Europe is therefore pursuing two objectives simultaneously:

secure today's supply while financing tomorrow's alternatives.

For reserve construction, that distinction also matters.

A material may be strategically important while remaining difficult to source, price, custody or trade independently.

Those characteristics need to influence allocation.

What we are watching

The next signals will be less about announcements and more about execution.

We are watching how long the Centinela strike lasts and whether it materially affects copper output.

We are watching which European strategic projects secure financing and long-term offtake, and who ultimately commits to buying output from projects such as Nolans.

We are watching when Project Vault begins meaningful physical procurement and which materials the US chooses to accumulate.

India's eventual stockpile composition will offer another indication of which materials governments increasingly consider strategically worth holding.

And across the technology sector, further long-duration power agreements will show how quickly AI demand continues moving from software into generation, grids and physical infrastructure.

For ARU, these developments matter less as individual headlines than as part of a broader change.

Governments are building inventories. Companies are securing long-term supply. The physical resources behind the modern economy are increasingly being treated as strategic assets.

The question for a modern reserve is not simply what is scarce.

It is which forms of physical scarcity can credibly preserve value over time.