Geopolitics of Mining: The Era of Critical Mineral Diplomacy
Introduction
It is probably fair to say that the mining sector has always been particularly vulnerable to geopolitics. But it is also fair to say that this historical vulnerability has become even more acute over the last few years as the energy transition, the AI revolution and simmering Great Power rivalry have combined to accelerate competition for access to critical minerals. This intensified competition for resources has led a reappraisal of countries’ attitude towards critical minerals and the widespread decision to re-classify them as strategic assets, access to which is critical to economic security and national interests. The real-life ramifications of this intensified competition and re-classification of the national importance of access to raw materials can be vividly seen in heightened US-China tensions; the Russian invasion of Ukraine; US territorial claims to Greenland and Canada; and the raised US military presence in Venezuela.
The Covid-19 pandemic, the Russia-Ukraine war and the Gaza conflict have, at the same time, exposed international vulnerabilities in mineral supply chains, prompting recipient countries to focus on the importance of improving resilience and security of supply. And, at the other end of the supply chain, many resource-rich countries are using intensified competition for scarce raw materials as an opportunity to move their economies up the value chain by exerting greater domestic control over mineral extraction and exports and avoid a new ‘Scramble for Resources’ from which others gain the benefit.
These trends have accentuated the crucial importance for extractive companies of identifying, understanding and mitigating existing and future geopolitical trends to protect their business interests.
Great Power Rivalry
China took a strategic decision in the early 2000s to make the production of PV cells a national priority. But China’s decision to view the extraction and processing of rare earth minerals as a strategic priority dates back to the 1980s and 1990s and broadened into a full critical-minerals-plus-batteries strategy in the 2010. Those prescient decisions are now bearing fruit now as China has effectively cornered the market in the extraction and processing of rare earth and critical minerals, which has enabled Beijing to build a commanding lead in the global development and manufacture of low and no-carbon technology, including in particular PV panels - as the Head of COP30 acknowledged this morning.
By 2024, China accounted for around 60% of global rare earth mining output and 91% of rare earth refining capacity. China produced 94% of the world’s sintered NdFeB magnets. Since these are core components of EVs, wind turbines, most electronics, defence sector products, industrial automation and medical devices, Beijing dominance in production gives China almost monopolistic supply control over global industries. A 2025 IEA Report noted that China was the leading refiner for 19 of 20 strategic minerals, with an average 70% market share: a concentration which gives China a strikingly powerful market dominance. You can read more about supply and processing concentration concerns here.
China’s market dominance has given it a powerful economic and geopolitical tool in the shape of a significant competitive advantage that it has not been afraid to use through the aggressive deployment of export controls to strictly control access to both raw materials and processing technology in order to gain international leverage over the supply chain of ‘downstream sectors’ (such as EVs, wind, electronics and defence).
In 2023, China imposed a requirement for a government licence on exporters of Gallium & germanium high-purity synthetic graphite and natural flake graphite (crucial components for chips) and banned the export of the technology necessary to make rare-earth magnets. A year later, China specifically targeted the US by imposing export licences to the US on gallium, germanium, antimony (and tightened scrutiny on graphite export). In early 2025, China imposed export-license controls on seven Rare Earth Elements (REEs) and their oxides/alloys/compounds and followed up last month, by extending those controls to a further five REEs; magnets/alloys and production equipment/tech; denying licenses for foreign defence end-users; and imposing export licences on foreign-made items that contained Chinese rare-earth content (≥0.1% of value) or are made with Chinese RE tech. In response, the US restricted advanced semiconductor exports to China and (until President Trump’s meeting with President Xi last month), had been actively considering outbound investment controls.
Although Covid had highlighted the dangers of over-extended supply chains and the West had begun to take legislative action in response (see below), it was possibly only when Beijing imposed its rare earth export curbs in 2025 and the prices of those minerals leapt by six times in in Europe, that the West really began to wake up to the acute economic and national security vulnerabilities that its reliance on Chinese dominance had created. The 2025 US-China tariff war (which at one point saw reciprocal tariffs of up to 145% on Chinese and US products) was, at least in part, triggered by deep US unease at Chinese dominance in the critical minerals market.
Supply Chain Security
The range of initiatives taken by import-dependent countries to de-risk their supply chains in response to market concentration makes it clear they now attach the same national security priority to reliable access to minerals as they always accorded to energy security.
In 2022 the US passed its Inflation Reduction Act (IRA), which tied US Government EV tax credits to battery minerals sourced from the US or free-trade partners.
Also in 2022, the US passed legislation permitting the provision of significant grants to magnet manufacturing and refining projects based in the US and reopened the Mountain Pass rare earth mine in California (though ironically, since the ore is still sent to China for refining, this may actually have increased US dependence on China).
The EU’s 2023 Critical Raw Materials Act aimed to boost domestic production and processing of key minerals and secure strategic partnerships abroad.
Australia (the world’s second largest producer of rare earth ore) has announced funding for a series of projects to build non-Chinese separation facilities.
Japan has built strategic stockpiles of rare earths, following its own 2010 China-supply crisis.
The Minerals Security Partnership (MSP) brought together more than a dozen countries to jointly invest in critical mineral projects in a range of countries with the objective of diversifying supply chains away from over-dependence on any single supplier.
The Quadrilateral Security Dialogue nations of US, Japan, Australia and India have engaged in intensive negotiations over strategic cooperation for access to critical minerals.
A number of import-dependent nation companies are funding significant research into ways to reduce dependence on rare earths altogether – including through improved recycling.
However, it will probably take a decade or more for these initiatives to truly break China’s monopoly over supply of raw and processed materials. Until then, the alarming the geopolitical reality is that China will continue to wield an outsized share of the leverage that control over supply of critical minerals brings with it.
Resource Nationalism
At the other end of the supply chain, governments in resource-rich countries have moved to increase State control over mineral sectors; capture a larger share of mining revenues; and/or mandate local value addition. A couple of examples demonstrate this emerging trend.
In 2020, Indonesia banned the export of unprocessed nickel ore to encourage domestic smelting. In 2023 it imposed a similar ban on bauxite exports with the aim of onshoring nickel processing and battery plants for electric vehicle (EV) supply chains.
In 2022, Mexico nationalized its lithium reserves.
In 2023, Chile announced plans for a state-owned lithium company and greater state participation in its burgeoning lithium industry.
Mali’s 2023 mining code reserves at least 5% ownership of new mines for local investors.
In 2025 Guinea revoked a foreign bauxite concession to create a state-run mining company.
In 2023, Niger announced plans to nationalize a French-operated uranium mine amid a broader pivot away from France towards Russia.
More information about this trend can be found here.
1) Africa
Africa is a continent blessed with extraordinary mineral wealth. By some estimates, 15% of the world’s total REE reserves are to be found in Africa (Although hydrocarbons are outside the scope of this article, it would be remiss not to mention the oil and gas reserves held by African countries such as Nigeria, Angola, Mozambique and Tanzania).
A few statistics demonstrate the concentration of resources:
African nations account for 6% of global known lithium deposits.
The Democratic Republic of Congo (DRC) produces over 70% of the world’s cobalt.
Southern Africa holds the majority of global platinum reserves, 46% of the world’s chromite and more than 30% of the world’s vanadium.
South Africa, Guinea, Gabon and Cote d’Ivoire are all in the top 10 global producers of manganese ore.
Guinea possesses the world’s largest bauxite (aluminium ore) reserves.
Mozambique and Madagascar hold 92% of the world’s known reserves of natural graphite.
Botswana is the world’s second largest single source of natural diamonds.
Given these natural resources, it is perhaps unsurprising that Africa increasingly finds itself at the centre of the tense geopolitical scramble for resources. That should be a cause for economic optimism and a positive deluge of foreign investment. But international mining companies have been given cause for pause…
A number of resource-rich African countries are seeking to use heightened international demand for resources to move their domestic industry up the value chain - through legislation restricting export; refusal of licences; and/or local content requirements. This policy approach is a delicate balancing act. Done right, it will help provide more sustainable and equitable economic growth with greater involvement of and training for the local workforce. Policies which bring in higher taxes or increased state equity should also increase public revenues, enabling greater expenditure on public services such as health or education. But, by the same token, they can also deter the foreign investment which remains vital to the health of the continent’s mining industry during its transition away from heavy dependence on foreign capital and expertise.
Poor governance and political instability in some parts of Africa adds to foreign hesitation about investment. Coups which have toppled regimes in Mali, Burkina Faso, Guinea, Niger between 2020 and 2023 have had a direct impact on mining operations and regulatory regimes.
Insecurity owing to military conflict and/or terrorism (for example in eastern DRC or Mozambique’s gas-rich Cabo Delgado) pose further significant risks to foreign investment.
This combination of vast natural mineral wealth, political instability and conflict and the rising geopolitical imperative for foreign governments to secure access to supply means that Africa carries a particular risk of becoming collateral damage in the competition amongst and between foreign interests.
China has been the most significant external player in African mining over the past decade. 46% of the total Chinese funding for Belt and Road engagement in Africa in 2023 was directed to critical mineral projects.
Chinese companies own or are partners in nine of the ten largest cobalt mines in DRC (controlling about 80% of DRC’s cobalt production).
Chinese companies own or hold stakes in 15 of the DRC’s largest copper mines.
Chinese companies have major stakes in Zambia’s copper, Guinea’s bauxite, South Africa’s chrome and manganese, and Ghana’s bauxite and gold.
China has invested nearly $8 billion in mining projects for lithium, nickel, and cobalt, across Africa.
Russia has also been increasingly visible in Africa, maintaining or expanding its ties in African mining interests. However, since Russian links to Africa are often through private military or corporate proxies, Russian influence tends to be mainly limited to conflict-affected states – for example, the Wagner Group has secured gold and diamond concessions in Sudan and Central African Republic in exchange for the provision of security services. Russia has also been increasingly active in the Sahel Region, most notably in Niger where, after the 2023 coup and subsequent nationalisation of the uranium mines (previously run through a JV between a French company and its Nigerien state counterpart), Russia has signed an MoU earlier to cooperate on nuclear energy and uranium mining. Le Monde ran an article earlier this month reporting that Niger is now planning to sell about 1,000 metric tons of “yellowcake” uranium to Russia, instead of Europe, raising broader concerns around the reliability of supply chains, contract stability, foreign investments, and the wider geopolitics of control over and access to uranium (as well as serious national security questions) for the French nuclear fleet (with attendant implications for European energy security).
But China and Russia are not alone in increasing their presence in Africa. The US and EU have also stepped up their involvement:
The US discussed a novel “minerals-for-security” arrangement with the DRC, under which they would provide military assistance to the DRC to combat rebels in the cobalt-rich east in exchange for preferential access to DRC’s critical minerals.
During the 2022 US-Africa Leaders’ Summit, the US announced a series of initiatives to invest in African critical minerals and infrastructure.
DRC authorities announced plans to increase the State mining company’s stake in a giant cobalt-copper JV and supported an Australian company’s claim to the Manono lithium project in preference to Chinese companies. The US, seeking to exploit this development, offered financial support to the Australian company, in return for guarantees that produce from the mine would be sold on to an American firm.
US development agencies have financed or insured a new graphite mine in Tanzania and a feasibility study for rare earth separation in Malawi.
With French influence in Francophone Africa waning, the EU created its “Global Gateway” strategy under which it signed an MoU to support development of Namibia’s lithium, rare earth, and green hydrogen industries.
2) South America
South America is another of the world’s key sources of minerals - including silver (Peru is the world’s top producer); gold (Peru is S America’s biggest producer of gold, and the ninth largest in the world), iron ore and niobium (Brazil holds a virtual monopoly in the latter). And just as in Africa, nations which are rich in these vital resources have been struggling with how to manage the increase in international demand and strategic interest and, in S America’s case, the criminality that often arrives comes hand-in-hand with those riches. But the jewels in S America’s natural resources crown over which the geopolitical competition for access is fiercest are lithium and copper.
a) Lithium
The centrality of lithium to EV batteries and energy storage and the consequent projected increase in demand is set out in more depth here. With about 60% of the world’s identified lithium resources lying in what is known as ‘The Lithium Triangle’ of Bolivia, Argentina, and Chile (and up to an estimated further 15% in Mexico), there has been a huge surge of international interest and investment in the region. In the context of an increasingly tense geopolitical struggle for access to energy transition minerals, the Triangle countries could collectively become as important as OPEC for oil, in the context of lithium for batteries. Just as in Africa, this has led to a rise in S American resource nationalism and State-led lithium strategies to move up the value chain and avoid repeating the historical pattern of exporting raw material and importing finished products.
In 2022, Mexico amended its mining law to reserve all lithium extraction for the State and created a State lithium company.
In 2023, Mexico formally transferred lithium concessions to the energy ministry.
In 2023 a Bolivian initiative to create an OPEC-equivalent of Latin American lithium producers to coordinate on pricing, led to a meeting between the Presidents of Argentina, Chile, Bolivia, and representatives from Brazil to discuss coordinating lithium strategy.
Voicing regional concerns at great-power competition for control of Lithium, Bolivia’s President specifically warned that control over the mineral should not become ‘a pretext for destabilizing governments’ and inveighed against ‘foreign’ control over lithium (the fact that Bolivia had just signed a $1 billion deal with a Chinese consortium to build Bolivia’s first lithium hydroxide plant, seems to have escaped the President’s notice….).
In 2023, Chile launched its National Lithium Strategy, reserving the majority stake to the country for all future lithium operations, citing the need to protect the environment and ensure the lithium boom benefitted Chile’s economy.
In contrast, Argentina has maintained a relatively investment-friendly approach designed to attract foreign investment in joint lithium projects, even if some provinces like Catamarca took the step of forming public-private partnerships to reserve some of the benefit for the state.
Despite these attempts to protect local interests, significant international investment has flowed into the region, with Chinese companies taking major stakes in mining operations in all three lithium triangle countries and Western automakers (for example BMW) and battery producers signing offtake agreements.
b) Copper
South America also dominates the globe’s raw material supply of copper - essential for electrification and industry. Chile (the world’s largest copper producer) and Peru (the second largest), together account for between 35-40% of the world’s mined copper. Global demand for copper is projected to increase by 70-90% between now and 2050, meaning that copper-producing countries, like those which produce lithium, are likely to be pulled into an intensifying geopolitical competition for resources – competition whose impact has already been felt.
Chile introduced a Mining Royalty Reform, under which large copper producers face higher royalties tied to sales and operating margin.
In Peru, the former President Pedro Castillo campaigned on nationalizing gas and raising mining taxes. Although he did not subsequently nationalise the country’s copper assets, the uncertainty created by the threat to do so led to a pause in investment. Protests which erupted when he was ousted in 2022 were concentrated in mining regions, disrupting production at major copper mines, curtailing global supply and spiking pushing prices.
In Panama, when the government renegotiated the contract to exploit the Cobre Panamá mine in order to increase state revenues, the population viewed the new agreement as too lenient on Quantum Minerals, sparking sparked major protests, which temporarily shut the mine.
The resource wealth of South American countries has inevitably drawn international attention, with the US and EU seeking to secure lithium and copper supply agreements and updating trade deals to include provisions on sustainable raw material trade, in exchange for investment and technology sharing. A recent Guardian article noted the ‘lawless rush for rare earth minerals in Venezuela’ (including coltan, tin, tungsten and tantalum) which may be one reason why President Trump has recently turned his attention southwards and a recent Chatham House publication (The World Today) noted the crime, ‘mercury poisoning, environmental carnage and lawlessness’ which the ever-rising price of gold on world markets has inflicted on gold-producing regions of Peru.
But it is China whose economy and demand continue to have the greatest impact on the region (as well as on global prices). According to a 2023 European Parliament Report, China purchased around 34% of S America’s mineral exports. In addition to its stake in the Bolivian lithium plant noted above, China buys almost 75% of Chile’s copper production, 60% of Brazilian and the majority of Peru’s iron ore production (with major stakes in Peruvian mines).
[Without wishing to push the geographical coverage of this article too far, it is both relevant and important in this context to note that gaining access to significant and reliable sources of rare earth and critical minerals lies behind recent US interest in Canada, Greenland (if Greenland were to gain independence from Denmark, it would become a large, resource-rich and poorly-defended island sitting between Russia and America...) and Ukraine - and Putin’s interest in Ukraine is likely to have similar motivations].
Conclusion
Access to and control of minerals (and energy resources) has always been central to international relations. However, in an era characterised by an accelerating energy transition and the AI technology revolution; the rise of populist nationalism; and the degradation of the post-war international architecture, the backdrop to today’s desperate rush to secure reliable access to vital metals and minerals is that of an increasingly tense, volatile and unstable geopolitical environment. The concentration of resources in Africa and South America means that these two regions will shape the future resource map and are likely to become ever-more contested battlegrounds for influence.
China’s strategic decision, taken decades ago, to bet on the direction of the energy transition has enabled it to corner the market in raw materials and processing and to set the terms of international trade through export controls and dominance of downstream industries. This market dominance has created significant leverage for China, which State and private sector actors must learn to manage.
The West, in its scramble to catch up with China, has already begun to integrate mineral supply considerations into national security strategies – effectively treating critical minerals as strategic assets, access to which is afforded similar treatment to that given to defence assets. This change brings significant geopolitical risks, as the great powers strive to gain an advantage, which may lead to the introduction of further and stricter export controls (and we have already teetered on the brink of a major trade war between the world’s two largest economies, provoked by the imposition of export controls), resource protectionism and the re-drawing of supply chains and strategic alliances according to political affinities and resource access, rather than cost considerations.
Other stresses will exacerbate these risks. Policies which have the welcome aim of avoiding historical mistakes and moving resource-rich countries up the mineral value chain by ensuring resources are directed at improving domestic economic development, can act as impediments to international investment, as well as levers that State actors can use to facilitate underhand or illegal competition for influence. The experience of Russian in the Sahel is a salient example of this danger. And the presence of natural resources, bringing the promise of untold wealth also brings with it the unwelcome attendants of corruption, crime and environmental degradation.
In response, the West can make a difference by choosing, rather than to race for the bottom, to differentiate its counter-offer to Chinese investment by creating high responsible mining standards to avoid environmental devastation or human rights abuses. And there are some positive indications that the importance of ensuring reliable access to mineral resources may result in greater efforts at international coordination to avoid supply crunches - the G7 and EU have made clear their intentions to create stockpiles for critical minerals, with the EU’s Critical Minerals Act creating a joint purchasing platform and coordinated stocks and the G7 making specific reference in its June 2025 Communiqué to a Critical Minerals Action Plan.
However the West reacts, it is clear that competition for scarce resources is only going to intensify. In response governments are likely to increasingly bring together national security, geopolitical and mineral access strategies. For responsible governments, the challenge will be how to manage this scramble for resources safely, equitably and sustainably. The challenge for companies will navigating the consequent ever-changing backdrop of alliances, legislation and backroom deals in a world where resource constraints almost inevitably mean ever-spiralling geopolitical tension. Success will require deft diplomacy, informed advisors and strategic forward-planning based on three key precepts: diversify your supplies; invest in your allies; and never take the security of natural resources for granted.