Original Publication Date: November 7, 2025
Authors: Mat Yarger & Adam Wood
NOTE: The companies referenced in this article are fictional and are utilized as examples to highlight the economic cycle of critical mineral and material production.
This article 2 in our weekly Critical Minerals Series of Releases. Find Article 1 here and stay tuned next week for the next release.
Trade pressure is mounting, and the U.S. finds itself caught between protectionism and progress.
The cost of uncertainty has become a silent tariff of its own. Across the industrial landscape, policymakers are pushing for onshoring, friend-shoring, and regional trade alignment.
The intent is sound.
To protect domestic industry and secure the critical materials that power defense, infrastructure, and innovation.
But protection has a cost.
Under the current system, U.S. tariffs are applied like a switch, either on or off. There’s no mechanism to differentiate between low-risk, verifiable supply chains and those built on guesswork. The result is that even domestic and allied value chains are being penalized by the same broad brush.
Let’s paint a hypothetical story that’s rooted in some real examples. The companies we’re referencing are fictional, but this is a scenario we’ve seen in the industry.
Take Midland Steel Corp. in the U.S. and NorthShore Metals Ltd. just across the Canadian border. Midland ships high-grade iron feedstock north, where NorthShore refines it into steel coils that later return to Continental Auto Works in Michigan to manufacture light-duty trucks.
That doesn’t make economic sense.
It’s the kind of policy outcome that happens when data stops at the border.
If those same shipments carried verifiable, tamper-evident data proving origin and production attributes, tariffs could be adjusted based on evidence rather than geography. The difference between “foreign” and “domestic” could finally reflect fact, not assumption.
This is where verification starts to look like a financial tool. One that creates a middle ground between full protectionism and unverified free trade.
And that’s where the idea of verification as a subsidy begins to take shape.
When we talk about data infrastructure, we’re not referring to IT upgrades or new databases. We mean the system that allows energy use, material flow, and emissions data to move securely between mines, refineries, manufacturers, and markets. It’s what connects a ton of ore dug in Minnesota to the final chassis stamped in Michigan.
For decades, this data has been fragmented.
Isolated in spreadsheets, handwritten reports, and legacy systems. Every disconnect adding friction, and every piece of friction compounding the cost.
Verification changes that. It replaces assumption with evidence, and it turns evidence into leverage.
Trade policy should not be a set of static rules. It should rather be a dynamic economic pressure system that rewards precision and punishes opacity.
Every tonne of metal carries not only its physical weight but also an invisible provenance on its balance of energy, emissions, and uncertainty. A traditional blast furnace requires approximately 750 to 800 kilograms of coking coal per ton of steel, equivalent to about $150 in fuel costs. A direct-reduced iron (DRI) process using natural gas lowers the cost to around $60 per ton, while a hydrogen-based DRI reaches parity only when hydrogen costs near $0.85 per kilogram.
Those are the visible costs. The invisible ones come from inefficiency. Unmonitored energy, unoptimized logistics, and manual data reconciliation. For many producers, these inefficiencies erode 5 to 10 percent of margin before a single tariff is even applied.
Now layer on the policy environment. The EU’s CBAM has set the benchmark for emissions-linked tariffs, and similar mechanisms are emerging in the U.K., Canada, and the U.S. But while CBAM at least rewards verified low-carbon production, the U.S. framework remains binary. Tariff or no tariff, regardless of proof.
That gap is where opportunity lives.
If U.S. policy recognized verified traceability as a pathway to tariff reduction, essentially creating a voluntary compliance mechanism tied to secure data, companies could unlock the same benefits that CBAM already offers critical mineral companies that import sustainably developed minerals and materials into Europe. Verification would become a private-sector bridge to public-sector efficiency.
A shipment with verifiable sourcing, production, and emissions data may qualify for reduced tariffs, expedited customs clearance, and more favorable financing. One without it would remain in the higher-risk, higher-cost bracket.
That is not to be perceived as deregulation. It’s smarter regulation, calibrated to evidence that enables trust.
And it’s why verification is quickly becoming the new subsidy. It rewards proof over policy, precision over paperwork, and performance over politics.
The critical minerals and materials market is not just about extraction. It requires insights into sourcing, timing, flow, and coordination. A mine, a refinery, and a factory can each perform perfectly well on their own, yet the entire system can lose value if one part cannot prove what it has, when it has it, or where it came from.
This is the real issue facing U.S. manufacturing today. The challenge is not only supply. It is trust in that supply.
Data is the foundation of that trust.
Let’s paint a picture of how this would work.
IronRange Minerals operates several open-pit iron and nickel mines across Minnesota and Michigan. The company’s production is steady, but its data is fragmented. Tonnage reports are logged locally, energy and water usage are tracked separately, and shipment schedules are often updated by hand.
When refineries request detailed information to plan smelting operations, the data usually arrives too late to optimize scheduling, or it’s a jumbled mess at best. A delay of even two days can leave furnaces idle and raise input costs.
By integrating Demia’s Zero-Trust Data Fabric™, IronRange Minerals can collect production and logistics data directly from the field and feed it into a shared verification system. That information can then be securely viewed by refineries, transporters, and buyers without revealing sensitive trade details.
For the miner, this reduces coordination delays. For the refiner, it ensures the feedstock arrives when capacity is available. Both sides gain from a shared source of truth.
The ore then moves north to Lakeshore Refining Group in Canada, which operates several facilities that convert iron feedstock into steel coils and alloy bars. Refining is a continuous operation that depends on precise timing. If feedstock or power availability is disrupted, productivity drops rapidly.
Lakeshore uses Demia’s data infrastructure to connect its energy management systems, raw material input schedules, and output analytics. Verified data from IronRange is streamed into their production model, providing operators with a live view of feedstock quality and arrival times.
By coordinating verified data in real time, Lakeshore can plan production runs days in advance, reduce downtime, and ship on schedule to downstream customers. The result is predictable output and fewer supply gaps for U.S. manufacturers.
The next link in the chain is Summit Mobility, a manufacturer of drivetrains and structural components for heavy-duty trucks and commercial vehicles. Their biggest risk is uncertainty. Missing a shipment of steel coils by even one day can disrupt a full assembly line.
Through Demia, Summit can trace each shipment back to the refining batch and even the mine it originated from. This gives procurement and logistics teams complete visibility on when materials were produced, where they are in transit, and when they will arrive.
With that level of verification, Summit can schedule production to the hour and adjust purchasing dynamically to match inventory with manufacturing demand. The system functions as a live feedback loop across multiple states and suppliers.
This improved visibility benefits not only manufacturers but also other stakeholders.
Mariner Capital Bank utilizes verified production and logistics data to evaluate supply chain performance for lending and trade financing purposes. When a company can prove the availability and reliability of its inputs, it receives better credit terms and faster approval for operational loans.
Helios Metals Exchange lists verified domestic steel and aluminum products on its marketplace, offering buyers confidence that materials are available, deliverable, and sourced from verified suppliers. That assurance translates into faster trade and higher throughput for everyone involved.
Even freight operators and customs officials benefit. Magellan Logistics Cooperative, for example, can access verified origin and timing data directly through Demia’s system. This reduces inspection times, improves cross-border coordination, and allows both the U.S. and Canadian sides to plan shipments with fewer idle assets.
Behind all of this is an ecosystem of partners that make data infrastructure possible. Dell Technologies provides an edge computing environment to process data on-site, while Google Earth Engine and DeepMind contribute remote sensing layers and AI analytics infrastructure to validate operational activity without interfering with proprietary operations.
Demia integrates these technologies into a single, secure pipeline that enables information to flow while ensuring the independent stakeholders maintain control of their data. The data belongs to the operators. Demia ensures it can move safely to where it creates value.
Now consider the full loop: IronRange Minerals → Lakeshore Refining Group → Summit Mobility Systems → Helios Metals Exchange → Mariner Capital Bank.
Each participant gains from verified data. Mines reduce scheduling waste. Refineries increase utilization rates. Manufacturers cut downtime. Banks lower lending risk. Exchanges move inventory faster.
Together, these effects create a self-reinforcing economic flywheel. Data confidence drives coordination. Coordination drives productivity. Productivity strengthens domestic supply and reduces reliance on imports. While ensuring that sourcing information is secure, accurate, and reliable.
This is how traceability evolves from a reporting tool into a driver of industrial growth.
The term “subsidy” usually brings to mind government spending, incentive programs, or tax credits designed to offset production costs. In the U.S., these programs come and go with budget cycles. They are static tools in a dynamic economy.
Verification, on the other hand, behaves like a market-based subsidy. It rewards efficiency, timing, and certainty with lower costs, better financing, and faster throughput. Instead of being paid out from the Treasury, it is earned through performance.
Every part of the industrial value chain carries a hidden cost tied to uncertainty. Mines overproduce to hedge against shipping delays. Refineries stockpile inventory to cover scheduling gaps. Manufacturers order more than they need to avoid missing deadlines.
Each of those decisions ties up capital.
When Demia’s data infrastructure connects those operations into a verified network, uncertainty begins to shrink. Mines produce closer to demand. Refineries operate at steadier utilization. Manufacturers align production to arrival time. The capital that was once trapped in buffer inventory becomes free cash flow.
For a mid-sized manufacturer, a 5% improvement in materials timing can unlock millions in working capital each quarter. That is the first form of subsidy: money gained not from funding, but from precision.
The second form comes from trade itself.
The U.S. tariff system is currently binary. A shipment is taxed or it is not, regardless of whether the supply chain behind it is verifiable. This structure punishes reliable, allied producers and rewards opacity.
A voluntary verification mechanism could change that. If a shipment carries proof of origin and production through secure, verifiable data, it could qualify for reduced tariffs. That reduction would not be a loophole. It would be a recognition of lower trade risk.
Imagine a shipment of refined steel moving from a mine in the US to a refinery in Canada and back to Original Equipment Manufacturers (OEMs) in the U.S., carrying a verified record of where the ore was mined, how it was refined, and when it was produced. Customs could review that record in seconds, confirm that the supply chain originated within allied jurisdictions, and apply a reduced tariff rate automatically.
The effect would be immediate. Supply chains would remain efficient. Policy would still protect domestic capacity. Verification would create the middle ground between free trade and full protectionism.
In this model, proof becomes purchasing power.
Verification also carries weight in the financial markets.
When a lender or investor can see verified production data in real-time, they can assess creditworthiness with greater precision. The result is lower perceived risk and better lending terms. Verified producers secure lower interest rates, faster credit approvals, and broader access to capital markets.
That reduction in financing cost is the third form of subsidy. It directly improves cash flow while reinforcing accountability.
For banks and investors, verified data eliminates the uncertainty that often delays capital deployment in industrial projects. For operators, it creates a measurable return on verification that enables a recurring benefit that compounds with scale.
When lower tariffs, better coordination, and cheaper financing converge, the result is a self-sustaining loop of reinvestment.
Each cycle reinforces the next. It is a flywheel powered by trust.
In economic terms, verification is not a static reward. It is a continuous incentive mechanism that scales with performance.
For the U.S., this model offers a path to balance competitiveness with security. It allows trade policy to remain strong without creating friction between allied producers. It also ensures that domestic manufacturers receive materials on time, from trusted sources, at predictable cost.
Verification gives policymakers a third option. A voluntary, data-driven standard that rewards performance instead of lobbying.
That is how verification becomes the new subsidy. Not by replacing government support, but by creating a parallel system where proof itself becomes value.
Every industrial system has a rhythm. Extraction, refinement, production, delivery, reinvestment. When that rhythm is disrupted, cost compounds. When it is synchronized, value compounds.
Verification is what brings rhythm back to the industry.
It connects data across each stage of production so that operators, manufacturers, and financiers can make decisions in real time instead of after the fact. This is how the U.S. can convert existing infrastructure into an advantage instead of a liability.
The first effect of verified data is operational. When mines, refineries, and manufacturers can see verified supply and demand signals, they reduce overproduction, minimize idle time, and align logistics schedules.
Industry-wide, even a 2 to 3 percent gain in supply chain efficiency across the U.S. metals and materials sector represents billions of dollars in recovered value each year. That efficiency is the spark that starts the flywheel.
The second effect is trade-related.
If verified traceability becomes recognized as a voluntary pathway for tariff reduction, U.S. and allied producers gain a measurable cost advantage. A 10 percent tariff reduction on verified materials could save a mid-sized steel refiner tens of millions of dollars annually while preserving the intent of the tariff system.
The benefit would extend across borders. Verified supply chains between the U.S., Canada, and Mexico could maintain protection for the domestic industry while reducing friction for trusted partners.
This is how verification transforms from a compliance feature into a competitive incentive.
The third effect is financial.
Verification builds investor confidence by reducing information risk. When lenders and insurers can review verified data on production volumes, logistics timing, and supplier reliability, they can assign lower risk premiums.
A verified operation can often secure credit at 10 to 15 basis points lower than an unverified peer. Across billion-dollar facilities, that difference is significant enough to fund modernization, energy upgrades, or new equipment purchases.
Lower risk equals cheaper capital. Cheaper capital accelerates innovation.
Each reduction in cost and risk frees up new resources. Verified operators reinvest that liquidity into better systems, better equipment, and better workforce programs.
This reinvestment raises productivity, which produces more verified data. That, in turn, drives the next round of cost savings, credit improvement, and tariff reduction.
The cycle repeats. Each rotation strengthens the system.
At scale, the flywheel has national implications.
Verified data infrastructure strengthens industrial capacity, accelerates production timelines, and improves the reliability of domestic and allied supply chains. It lowers inflationary pressure by reducing friction in high-cost sectors like steel, aluminum, and rare earth processing.
It also gives U.S. policymakers something they have lacked for years. A data-backed middle ground between full protectionism and unrestricted free trade.
Verification becomes the mechanism for smarter policy and stronger industry.
When Demia’s Zero-Trust Data Fabric™ connects operations from mine to market, verification becomes a structural advantage for the entire economy.
The flywheel is simple:
Each loop creates more stability and more opportunity.
That is what it means for verification to act as a subsidy. It creates a self-reinforcing system of efficiency and confidence.
For the United States, the choice is not between protectionism and open markets. It is between static incentives and dynamic performance systems.
Verification offers a path where both industry and policy win. It provides the evidence needed to apply tariffs intelligently, distribute capital efficiently, and maintain production alignment with demand in real-time.
In this environment, data becomes the new incentive. The more reliable and verifiable it is, the lower the cost of doing business.
That is the future of the American industrial economy. One built not only on resources, but on trust in the systems that move them.
At Demia, we build systems and data pipelines that prove performance and enable traceability from the start to the end of a value chain.
If you work in mining, refining, or heavy industry and you want to understand how to use data and AI to improve efficiency and accountability, or want to help write the rules on data standardization and traceability across the critical minerals and materials value chain, reach out to us via email at info@demia.net.
This is an open invitation to collaborate. Let’s connect your operations to the systems that define the next generation of industrial reliability.
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