The race to secure the world’s supply of critical minerals has rapidly emerged as a defining geopolitical battleground for global powers. These materials are essential for modern technology ranging from electronics, artificial intelligence, advanced defense systems to the components of green energy transition.
Critical minerals are the raw materials that are the indispensable part of modern technologies, economy, and national security. These materials include lithium, cobalt, manganese, nickel and rare earth elements.
Rare earths are the most specific and useful category of critical minerals for defence, electronic, and green energy industries. Therefore, particularly rare earth elements, a group of 17 heavy metals, have become a flashpoint in power play as countries are racing to secure reserves and production of these materials.
According to the 2024 United States Geological Survey, 110 million tonnes of deposits were present globally. China possesses 44m deposits. Moreover, Brazil, Russia, Vietnam and India also have significant deposits of rare earths.
When it comes to mine production, China dominates global production along with an estimated 90-99 percent of global refining and processing capacity. In a nutshell, China currently controls about 70% of rare earths mining and 90% of the processing of the materials.
Critical minerals: New battleground for global powers
As reported by Reuters, the world has entered from “oil politics” into an “age of metal politics” characterized by critical metals.
Contrary to the dominance of China over critical minerals, the US relies on importing these minerals at rates ranging from 50 to 100 percent, according to a report by the Center for Strategic and International Studies.
This February, China announced export control of five metals that are used across clean energy and defence industries. These metals included Tungsten, Indium, Bismuth, Tellurium, and Molybdenum.
In April, China expanded the export control by adding five more medium to heavy rare earth elements, such as holmium, erbium, thulium, europium and ytterbium, as announced by China's commerce ministry.
On October 9, China in a dramatic move strengthened its rare earths export controls and tightened additional scrutiny for semiconductors using firms.
This move also consolidates China’s grip over supply chains that underscore state-of-the-art manufacturing and global defence.
Under the new rule, China would not allow foreign firms to export goods without the involvement of Chinese parties. It also would not allow the export of rare earth metals used in the defence sector on the grounds of dual-use technologies.
The recent ban marks a growing escalation between US and China over trade, semiconductor and rare earth supply chains.
The strategic move also poses challenges to the West’s advanced manufacturing sector in semiconductor and defence. Significantly, the US relies on China for about 70 percent of rare earth elements.
According to experts, the ban will hamper the US defence industry and curtail its ability to outpace China’s expanding production, which is 5 to 6 times faster than US own production.
On October 21, US President Donald Trump and Australian prime minister Anthony Albanese signed a critical minerals deal in a bid to counter China’s dominance.
As per official authorities, the agreement would support $8.5 billion worth of projects, aiming to expand Australia’s mining and processing abilities.
According to the framework, the two countries would invest around $1 billion in various projects over the next 6 months.
The US also announced investment in the construction of a 100 tonnes-per-year advanced gallium refinery in Western Australia and would offer around $2.2 billion in financing to advance critical mineral projects through its Export-Import Bank.
China has responded to the US-Australia deal by saying “resource-rich rare earth countries should take a proactive role” in stabilizing their critical minerals supply chains.”
According to China’s Foreign Ministry’s spokesperson, the nations which are rich with minerals should prioritize global economic and trade cooperation by safeguarding supply chains.
In the era of globalization, it is difficult to restrict supply chains without impacting the other countries at global level. If the countries continue competing for strongholds on critical minerals and rare earths, the world will experience a shockwave across the various industries.