Tariffs, gold highs, and shifting battery metals reshape mining in 2025 with new risks and opportunities for projects, juniors, and suppliers

Global tariffs, record gold highs, and shifting battery metal fortunes are reshaping mining in 2025, with big implications for projects and suppliers.

The June quarter has delivered one of the most volatile backdrops for the mining industry in recent memory. From sweeping new US tariffs to shifting demand drivers in China, and from record gold prices to financing surges for juniors, the mining landscape is being redrawn in ways that matter directly for contractors, suppliers, and producers. That was the clear message from the State of the Market: Mining Q2 2025 webinar hosted by S&P Global Commodity Insights, featuring geopolitical analyst Matt Blundell, base metals analyst Patricia Barreto, and research director Mark Ferguson.

Geopolitics drives uncertainty

Blundell set the stage by describing what he called the return of protectionism. The US tariffs rolled out on April 2, dubbed “Liberation Day,” have pushed average effective rates to highs not seen since the 1930s. Some countries have secured partial exemptions, but for many, metals and minerals remain caught in the crossfire. India, for example, saw its tariff rate double from 25 to 50 percent in August after failing to reduce Russian energy imports.

The geopolitical contest between Washington and Beijing extends far beyond trade flows. Both nations are doubling data centre capacity before 2030, each seeking to secure an edge in artificial intelligence. That build-out alone is forecast to require 2.8 million tonnes of steel and over a million kilograms of rare earths. “Semiconductors and data centres are no longer just commercial assets,” Blundell said. “They are strategic infrastructure, and the tariffs are a mechanism to achieve these broader industrial goals”.

For mining, the linkage is straightforward. Protectionism is pushing manufacturers to revisit supply chains, delay capital spending, and look for alternate sources of raw materials. That means elevated financing costs for miners, greater caution in project planning, and potential opportunities for those able to offer secure supply into sensitive markets.

Gold steadies after a record run

Against this volatile backdrop, gold again proved its resilience. Prices surged to a record US$3,435 per ounce on June 13 following an Israeli strike on Iranian nuclear facilities. Central banks, led by Poland and Turkey, continued to accumulate reserves, reinforcing gold’s role as a safe-haven asset. Yet by late July momentum cooled, with average quarterly prices settling at US$3,280/oz, up 26 percent year-on-year.

Investor flows into exchange-traded funds were mixed, particularly in the US where equity market optimism dampened appetite for bullion. S&P Global projects an average gold price of US$3,227/oz in 2025, with further upside possible if stagflation risks materialise. For exploration budgets, this stabilisation is welcome news: contractors can expect sustained demand for drilling and field services linked to gold projects.

Base metals under tariff strain

Barreto highlighted how tariffs are distorting copper markets. When the US imposed a 50 percent tariff on copper imports in August—excluding refined copper but targeting semi-fabricated products—COMEX prices initially spiked, with the arbitrage over the London Metal Exchange widening to more than US$2,000 per tonne. Once refiners realised refined imports were exempt, the premium collapsed.

At the same time, smelters continue to operate under pressure. Spot treatment charges remain near record lows, leaving operators reliant on byproduct credits such as sulfuric acid to stay afloat. Disruptions at mines in the DRC and Chile have trimmed concentrate supply, supporting price forecasts. S&P Global now expects copper to average around US$9,500/t in 2025.

Zinc tells a slightly different story. Refined output in China rose 9 percent quarter-on-quarter, yet global visible stocks remain equivalent to less than four days of consumption. Annual benchmark treatment charges were negotiated at historic lows, raising questions over smelter viability outside China. Zinc prices are expected to average US$2,800/t this year.

Aluminum markets were rocked by the US decision in July to double import tariffs to 50 percent. The Midwest premium surged to a record 72 cents per pound and could climb higher as domestic stocks are drawn down. Alumina supply growth from Indonesia, India, and Africa will soon surpass Australia’s position as top exporter, with regional surpluses expected to weigh on prices through 2026.

Battery materials diverge

Battery raw materials continue to chart divergent courses. Lithium prices remain sharply lower than at the start of 2025, leaving 40 percent of global production loss-making. Output cuts and Chinese stockpiling have provided some support, with carbonate prices forecast at around US$9,200/t this year. But S&P does not expect a structural deficit until well into the next decade, dampening near-term investment appetite.

Cobalt, by contrast, spiked on the back of an extended DRC export ban. Prices are projected to remain above US$14/lb over the next eight quarters, although any relaxation of export controls could trigger a correction. Nickel demand is still dominated by stainless steel, but battery demand is expected to grow at nearly 12 percent annually to 2035. With supply growth close behind, nickel prices are forecast to average US$15,500/t in 2025.

Steel and bulks cool

China’s steel consumption fell by 11 Mt in the first five months of the year, with total 2025 demand forecast at just under 868 Mt. Infrastructure is overtaking property as the leading consumer, but government-mandated production cuts remain a looming risk. Iron ore prices hit a nine-month low in June before recovering in July. Imports are expected to decline by 23 Mt in 2025, before peaking again in 2028 at 1.25 Bt. The Simandou project in Guinea will begin reshaping seaborne balances from 2026, creating potential surpluses and price pressure.

Exploration finance shows signs of life

Perhaps the most encouraging development for suppliers came in financing and exploration trends. Ferguson reported that Q2 financings reached US$11.3 billion, the fourth-highest total in three years. Juniors raised US$5.45 billion, the strongest result since early 2021, with Canada, Australia, and the US attracting the bulk of project-directed funds.

Drilling activity presented a mixed picture. The number of distinct projects drilled fell, but intensity per project rose sharply, averaging 26 holes—the highest since 2017. Gold accounted for much of this increase. While new resource announcements remain subdued compared to a decade ago, gold projects again dominated the positive side of the ledger.

The Pipeline Activity Index, a composite measure of exploration health, edged higher to 85, thanks largely to gold. Base metals and specialty commodities such as lithium and cobalt declined, reflecting price headwinds. M&A activity also bounced back, with US$9.4 billion in deals announced in Q2, led by gold and copper transactions.

What it means for METS

For METS providers, the quarter underscores several priorities:

• Gold is where the money is. Exploration intensity is increasing even as project breadth narrows. Drilling services, geophysical surveys, and lab capacity will remain in demand.

• Tariffs are reshaping flows. Equipment suppliers should anticipate volatility in procurement and financing as trade policies disrupt copper, aluminum, and steel.

• Battery materials remain selective. Lithium softness could mean delayed project spending, but cobalt and nickel stability provide openings for suppliers positioned in those chains.

• Juniors are back in play. Financing strength in Canada, Australia, and the US suggests more tenders for drilling, camp services, and specialist consulting.

• Long-term risk is discovery. With fewer new greenfield resources being defined, the industry risks future supply shortfalls, which could reinforce higher prices but challenge pipeline health.