From copper to antimony, the arms race needs metals

By 2026, the armaments industry could absorb 14% of the global supply of refined copper, or 4.22 million tonnes, compared to 10.5% (2.19 million tonnes) in 2021, says a recent report by Simon Hunt Strategic Services. Most bullets contain the red metal: they are typically jacketed with brass, an alloy of copper and zinc. There is half a kilogram of copper in each 155mm munition and the Ukrainian army alone fires up to 7,000 per day according to the European Defence Agency (EDA).

"The war is good for the metals business," notes Andy Farida, analyst at Fastmarkets. "The resilience shown by copper prices, relative to those of other base metals, could also be partly explained by the increased demand due to the war in Ukraine.

Before this conflict, the US was producing just 14,400 155mm rounds per month, today it is at 36,000 and aims to reach 100,000 by the end of 2025, recalls the publication DefenceOne. The EU has pledged to more than triple production capacity, exceeding 2 million units per year by the end of 2024 and 3 million by the end of the decade. Brussels has also allocated funds specifically for this purpose: 500 million euro with the Act in Support of Ammunition Production (Asap), one and a half billion with the European Defence Investment Program (Edip). But the objectives come up against unprecedented supply difficulties, which today mainly concern explosive materials.

The alarm, raised by the Swedish giant Saab and other companies in the sector, concerns an ingredient in gunpowder - nitrocellulose or fulmicotton, derived from cotton fibres nowadays produced mainly in China - and the most common explosives used in bullets: TNT (trinitrotoluene) - of which about 10 kg is needed for each 155 mm NATO munition - and others used in association with TNT, such as HMX (octogenic) and RDX (exogenous).

The only TNT factory left in the NATO area is in Poland: Nitro-Chem in Bydgosszcz, which produces around 10,000 tonnes per year, totally insufficient for current needs. In Great Britain the last plant closed in 2008, in Germany in 1990 and in the USA back in 1986. There was also a factory in Ukraine, in the Russian-occupied Lugansk region, but it was destroyed.

Today, TNT supplies come mainly from China and India (which also export to Russia). Between 2023 and 2024, Mumbai shipped at least 1,200 tonnes of this and other explosives to Western arms manufacturers, according to Reuters.

As for nitrocellulose, in the USA there is only one factory, in Virginia, while in Europe the main problem is the lack of raw materials: we import from China "more than 70% of the cotton linters" (the shortest fibres that wrap the seed, Ed.), denounced Armin Papperger, CEO of German armaments giant Rheinmetall, which also produces ammunition and nitrocellulose (through its subsidiary Nitrochemie). Other European explosives producers are the French Eurenco, the Norwegian Chemring Nobel, the Czech Explosia and the Spanish Fabrica Municiones de Granada (FMG). In heavy artillery ammunition, the Old Continent's big names, besides Rheinmetall, are Nammo, KNDS, BAE, MSM.

In the defence industry, so far no one is reporting difficulties in the supply of metals. But this does not mean that there are no risks on the horizon. The European Union and Great Britain do not possess strategic stocks of critical minerals. In the USA there is the National Defence Stockpile (NDS), established in 1939, but the situation is not encouraging and the deteriorating geopolitical scenarios have opened up a political debate on whether we should take corrective action.

An analysis by CRS, the US Congressional Research Service, showed a shortage of strategic stockpiles of 88 raw materials needed for defence (there were 53 in 2021). In March 2023, the NDL held $912.3 million worth of critical materials, just 1.2% in real terms compared to 1962, the Cold War period. In the event of a large-scale conflict, the metals set aside would only cover 37.9 per cent of the shortfall in the military and 7.5 per cent in the civilian sector, the study estimates. And in an emergency situation, restocking could be a serious problem: of at least twenty critical materials, the main producer - and the US's top supplier - is China, a country that is easier to imagine as an enemy than a military ally of Washington.

Beijing, as is now well known, has almost total control over the supply of many strategic raw materials: metals often referred to as 'green' or hi-tech, but largely indispensable even in modern military technology. These include several rare earths, although the dominant producer is Brazil in the case of niobium, used in steel super alloys, of which the US Geological Survey states that it "has been a source of concern in every national military emergency since World War I". The US has not produced any since 1959 and there is not an ounce of it in the NDS strategic stockpile.

Supplies of cobalt, used among other things in fighter jet engines and precision missiles, are also largely Chinese, as are those of natural graphite, which the Dutch The Hague Centre for Strategic Studies has indicated as one of the two most strategic commodities in the military sphere. The second is the more common aluminium (a metal whose energy-intensive production has plummeted in Europe anyway, and which comes largely from Russia and China).

Graphite and aluminium are present in almost all military vehicles and equipment, whether they are destined for the air force, navy or ground offensives. And for both, the supply chain is exposed to "very high" geopolitical risks, according to the study, which also points to very high defence requirements and potential supply problems for copper and titanium. Titanium is crucial in aircraft and especially in warplanes: almost 20% of the weight of an F-35 fighter jet is titanium, to get an idea. And among the world's largest producers, again, are China and Russia.