As the world embraces electric vehicles and advanced technologies, nations are locked in a fierce competition to secure essential critical minerals. These vital resources, ranging from lithium to cobalt, are integral to the production of everything from smartphones to renewable energy systems. The United States, under President Donald Trump, has prioritised access to these minerals, exploring potential mining partnerships in Greenland and Ukraine. However, the landscape is dominated by China, which controls a significant portion of the processing capabilities for these critical materials.
Understanding Critical Minerals
Critical minerals encompass those resources deemed essential for national security and economic stability, yet often difficult to procure. Countries maintain varying lists of these minerals based on their industrial needs and available resources. For instance, while copper is included on the latest U.S. critical minerals list, it does not feature on the UK’s. The UK identifies 34 materials as critical, including aluminium, cobalt, and helium, signalling a unique approach to resource prioritisation.
Among the minerals expected to see soaring demand in the near future are:
– **Copper**: Fundamental to energy infrastructure and construction.
– **Lithium**: Key for energy storage solutions.
– **Cobalt**: Essential for portable batteries and high-strength alloys, frequently used in wind turbines.
– **Graphite**: Utilised in fuel cells, batteries, lubricants, and nuclear power applications.
The Role of Rare Earth Elements
Rare earth elements (REEs) are integral to many critical minerals lists due to their unique electrical and magnetic properties. Comprising 17 elements from the lanthanide series, along with scandium and yttrium, these materials are crucial for microchips that power various sectors, from defence to healthcare. Notable applications include:
– **Yttrium**: Used in laser technology for communications and medical procedures.
– **Neodymium**: Vital for manufacturing permanent magnets found in electric vehicles and renewable energy systems.
– **Lanthanum**: Employed in rechargeable batteries.
Despite their name, rare earth elements are not particularly rare in terms of abundance. For example, neodymium is present at approximately 20 parts per million in the Earth’s crust, while copper is found at a slightly higher concentration of 27 parts per million.
Global Reserves and Production Dynamics
The distribution of critical minerals is widespread, yet certain countries boast substantial reserves. China leads the charge with an estimated 44 million tonnes of rare earth reserves, followed by Brazil with 21 million tonnes and Australia at around six million tonnes. Notably, Australia, Indonesia, and Chile are home to significant mining operations. Australia dominates the production of essential minerals such as iron ore, gold, zinc, nickel, cobalt, and lithium, while Indonesia is responsible for half of the world’s nickel output. Chile, for its part, remains the leading exporter of copper.
Despite current mining projects being deemed sufficient for most demands, the International Energy Agency warns that by the 2030s, shortages in copper and lithium could emerge.
China’s Processing Dominance
China’s supremacy in the critical minerals arena is not solely due to its natural resource endowment; it also stems from its advanced processing capabilities. Many countries lack the infrastructure to refine these minerals into usable forms. For example, although silicon metal is extracted in over 30 nations, only three possess the capacity to convert it into polysilicon for microchips—a crucial step in the supply chain.
In 2021, the Democratic Republic of Congo produced a staggering 70% of the world’s cobalt, with 90% of that supply refined in China. Furthermore, while Australia and Chile accounted for over 75% of global lithium production, 72% of the refining occurred in China. For some rare earths, Chinese facilities handle more than 95% of processing, underscoring the nation’s grip on this vital sector.
Bob Ward from the London School of Economics highlights that China strategically recognised the potential of green energy a decade ago and has since pursued dominance in processing these minerals. This strategic foresight has left the US and other nations heavily reliant on Chinese production, raising concerns about vulnerability in critical supply chains.
Geopolitical Implications and Future Outlook
The geopolitical ramifications of this dependence are significant. A report from a US Government Select Committee cautioned that without bolstering domestic critical mineral supply chains, the US could face severe disruptions in defence production and the manufacturing of advanced technologies. The European Central Bank echoed these concerns, labelling China’s pivotal role a potential vulnerability to geopolitical upheavals.
In response, President Trump has expressed a clear commitment to enhancing the US’s production capabilities to diminish reliance on China. Following a critical minerals agreement with Australia in October 2025, Trump proclaimed that the US would soon possess an abundance of these essential resources.
However, the reality remains that while the US has some rare earth mineral reserves, it accounts for just over 2% of the global supply, according to the US Geological Survey. Establishing robust processing capabilities to match China’s efficiency is a long-term challenge.
Lower environmental standards in China have enabled it to maintain competitive pricing, further complicating the efforts of other nations to rival its dominance. Recent investigations have uncovered environmental degradation and toxic waste issues surrounding rare earth mining operations in Northern China, raising ethical concerns about the true cost of these critical resources.
Why it Matters
The scramble for critical minerals is not merely an economic issue; it poses essential questions about national security, technological advancement, and environmental sustainability. As nations pursue these vital resources, the geopolitical landscape is shifting, highlighting the intricate web of dependencies that could shape our future. The outcome of this race will significantly influence global power dynamics, technological innovation, and the transition to a sustainable energy future.
