Strategic Copper Security in the U.S.: Weighing Risks and Rewards in the Resolution Copper Project

The U.S. copper sector stands at a crossroads, torn between the urgent need for domestic mineral security and the escalating costs of environmental and social resistance. At the heart of this tension lies the Resolution Copper Project, a $2 billion joint venture between Rio Tinto and BHP that could supply 25% of U.S. copper demand. Yet, its path to operationalization is mired in legal, regulatory, and geopolitical volatility, offering a case study in the complexities of balancing national interests with sustainability and indigenous rights.

Geopolitical Leverage and the Trump Administration's Push

Copper is no longer just a commodity—it is a geopolitical lever. With global demand projected to grow at 2.6% annually through 2035, driven by electric vehicles, renewable energy grids, and defense technologies, the U.S. has sought to insulate itself from supply chain vulnerabilities. The Trump administration's aggressive policies—ranging from a 50% tariff on semi-finished copper goods under Section 232 to fast-tracking permits via the Defense Production Act—reflect this strategy. The Resolution Copper Project, with its potential to produce 20 million tonnes of copper over 40 years, is a linchpin in this effort.

The administration's rationale is clear: reducing reliance on foreign sources, particularly China, which dominates 60% of global copper refining capacity. By incentivizing domestic production and processing, the U.S. aims to secure its position in the energy transition while shielding its economy from geopolitical shocks. However, this push has collided with a growing movement to prioritize environmental justice and indigenous sovereignty.

Regulatory and Cultural Resistance: A Legal Quagmire

The project's most immediate obstacle is the San Carlos Apache Tribe, which has opposed the mine for decades. Oak Flat (Chi'chil Biłdagoteel), the site of the proposed mine, is sacred to the tribe, housing ancestral burial grounds and spiritual sites. In August 2025, a 9th Circuit Court of Appeals injunction halted the land transfer necessary for the project to proceed, citing inadequate tribal consultation and environmental review. This ruling has forced Rio Tinto and BHP into a protracted legal battle, with the tribe arguing that the mine would irreversibly damage cultural heritage and ecosystems.

The legal dispute is emblematic of a broader shift in U.S. policy toward indigenous rights. Federal obligations to consult with tribes, codified in treaties and modern statutes, are increasingly being enforced by courts. For investors, this means regulatory timelines are unpredictable, and projects in culturally sensitive areas face heightened scrutiny. The outcome of this case could set a precedent for future mining ventures, reshaping how the U.S. balances resource extraction with cultural preservation.

Investment Risks: Navigating Uncertainty

The Resolution Copper Project's long-term viability hinges on three key factors: regulatory clarity, ESG alignment, and market dynamics.

1. Regulatory Uncertainty: The 9th Circuit's injunction has delayed the land exchange, a critical step for the project. While the Trump administration has pushed to expedite permits, the Biden administration's emphasis on ESG criteria and environmental justice introduces further volatility. Investors must weigh the risk of prolonged legal battles against the potential for policy shifts that could either accelerate or derail the project.

2. ESG Scrutiny: The mine's block caving method, while efficient, poses environmental risks such as subsidence craters and groundwater contamination. These concerns clash with global decarbonization goals and ESG investment trends. The project's ability to secure certifications like the Copper Mark—a sustainability standard for the industry—will be crucial in attracting capital.

3. Market Volatility: Copper prices have surged due to the energy transition, but U.S. refining capacity lags behind production. The 50% tariff on semi-finished goods has boosted domestic pricing power, but it also raises costs for downstream manufacturers. Investors must assess whether the project can navigate these bottlenecks while maintaining profitability.

Strategic Returns: A High-Stakes Opportunity

Despite the risks, the Resolution Copper Project offers compelling upside. If it secures permits and begins production by the late 2030s, it could generate $149 million annually in payroll and $200 million in federal revenue. For investors, the project's alignment with U.S. mineral security goals and its potential to benefit from tariffs and DPA incentives make it a strategic asset. However, success depends on resolving legal disputes and demonstrating ESG compliance.

The project also serves as a test case for how the U.S. will manage critical mineral supply chains in the 21st century. If it proceeds, it could catalyze a wave of domestic mining investments, bolstering U.S. competitiveness in the global energy transition. Conversely, a permanent injunction could signal a shift toward prioritizing cultural and environmental considerations over economic gains, reshaping the sector's trajectory.

Conclusion: A Calculated Bet

For investors, the Resolution Copper Project is a high-stakes bet on the future of U.S. mineral policy. The project's potential to meet 25% of domestic copper demand and its strategic alignment with national security objectives are undeniable. However, the risks—legal delays, ESG scrutiny, and regulatory shifts—cannot be ignored.

A prudent approach would involve hedging against regulatory uncertainty by diversifying exposure across the copper value chain. For example, investing in companies with U.S. refining capabilities, such as Rio Tinto's Morenci smelter, could mitigate some of the project's risks while capitalizing on the energy transition's tailwinds. Additionally, monitoring the 90-day U.S. Forest Service response period and the project's ESG certification progress will be critical for timing entry points.

In the end, the Resolution Copper Project is more than a mine—it is a microcosm of the U.S.'s struggle to reconcile economic ambition with environmental and cultural responsibility. For those willing to navigate its complexities, the rewards could be substantial. But in a world where certainty is elusive, patience and adaptability will be the investor's greatest assets.