The war for minerals, oil and AI

Along with tapping Venezuela's massive oil reserves, officials say, harvesting the country's rare-earth minerals could help stabilize its finances and help the U.S. blunt China's global stranglehold on those precious resources the chip industry needs.

• "You have steel, you have minerals, all the critical minerals," Commerce Secretary Howard Lutnick told reporters aboard Air Force One with President Trump late Sunday. "They have a great mining history that's gone rusty."
• Lutnick said Trump "is going to fix it and bring it back — for the Venezuelans."

Yes, but: Trump's power play also would benefit U.S. companies, which have begun reaching out to the administration about business opportunities in Venezuela. Financial analysts on Monday were touting the potential mining investments there.

• Nothing is certain with Venezuela's governance or its business opportunities in the wake of the U.S. military's capture of Nicolas Maduro.

As for Greenland, Trump has mused about taking control of the Denmark territory.

• Most of his advisers don't believe he'd follow through on the extreme idea of seizing land from an ally, which would provoke a crisis in NATO. But Trump continues to raise the issue.

Zoom in: Both Venezuela and Greenland have some of the key critical minerals needed for advanced electronics and batteries.

• They have deposits of gallium, germanium, indium, tantalum and silicon used in advanced AI chips. Greenland has another coveted mineral that Venezuela does not — palladium.
• Compared to Greenland, Venezuela has more significant quantities of coltan, a metal used in smartphones, laptops and electric vehicles.
• Venezuela and Greenland also have thorium, a metal that can be converted into fissile uranium-233 and used as a nuclear fuel. And both are rich in clean energy minerals like lithium, cobalt and nickel that can help power massive AI data centers.

The big picture: The U.S. interest in securing critical minerals in Venezuela and elsewhere is as much about dominance in weaponry as it is in AI, an increasingly large contributor to U.S. economic growth and the stock market.

• The U.S. is reliant on China for most of its access to rare earth minerals because Beijing has access to about 90% of the world's supply.
• Beijing has used that fact to its advantage in the ongoing trade war, ratcheting up export controls on rare earths.

Zoom out: Trump's talk of taking Greenland, his operation to seize Maduro, and his open interest in developing Venezuela's oil fields and other natural resources, have led to widespread criticism that the U.S. is acting illegally, and like an imperial power.

• Trump appears unbothered, and boasted Saturday about a "Donroe Doctrine" of hemispheric dominance.
• Trump advisers, meanwhile, are casting U.S. involvement as a win-win benefit for Venezuela. "The best way to stabilize Venezuela is through economic development," a Trump adviser told Axios. "The U.S. government is strategically postured to actively pursue both critical minerals and infrastructure to further national security."

State of play: To pursue critical minerals and development projects in risky areas, Trump's administration is financing projects through the Defense Department's Office of Strategic Capital and the U.S. International Development Finance Corporation.

• Congress tripled the finance corporation's investment cap to $205 billion.

What they're saying: The U.S. pursuit of critical minerals in other lands is "an affirmation that countries and regions need to have their own sources of supply," Jay Pelosky, founder of the TPW consulting firm, told Axios.

• This reinforces China's interest in becoming independent of the U.S. tech stack and vice versa, particularly as the two nations compete to win the AI race.

Between the lines: The U.S. involvement in Venezuela is likely to have significant implications for the trade war with China.

• If the U.S. can gain access to Venezuela's rare earths, it will have a potential leg up in the tariff war.
• If not, China could continue to use rare earths as leverage by cutting off access, which would hurt markets and the economy, Peter Tchir, head of macro strategy at Academy Securities, told Axios.

Yes, but: For all his administration's interest in AI and rare earth minerals, Trump, at heart, is still an oil man and focuses much more on developing that industry and less on critical minerals.

• "Everybody has rare earth. Rare earth is not rare," Trump told reporters Sunday. "What's rare is the processing. We're doing processing plants all over."
• "The refining of all the commodities other than oil is done in China," Marko Papic of BCA research told Axios, adding that refining rare earths is the problem, not the supply — and China has the expertise on that process.
• Even if the U.S. could handle the refining, they ask, would it have to then ship technology products back to China for manufacturing?

The bottom line: The U.S. could access more rare earths via Venezuela, but the refining and manufacturing process required for AI companies to benefit from such a move could take years to establish.