The author of the Trans-Pacific Vision Mercy Kuo regularly engages experts in matters, political practitioners and strategic thinkers around the world for their various information on the American policy of Asia. This conversation with Thijs Van de Graaf – Associate Professor at the University of Ghent, Energy Stock Exchange at Brussels Institute for Geopolitics, and the main author of the Irena report on the geopolitics of critical materials (2023) – is the 451st of the Trans -Pacific View Insight series.
Explain the role and relevance of critical minerals in the global energy transition.
The energy transition is, at the base, a transition from materials. Batteries, wind turbines, solar panels and electric vehicles (EV) are counting on elements of lithium, cobalt, nickel and rare earths – which makes clean technologies much more with high intensity of minerals than fossil fuel systems. An electric car, for example, requires six times more minerals than conventional, and an offshore wind farm needs nine times more mineral by megawatt than a gas plant.
But unlike fossil fuels, which must be constantly extracted and burned, minerals are a punctual entrance. Once extracted, they can be used, reused and recycled – shifting the security equation. The problem is not that we do not have these materials, but that the supply chains are fragile, refining is concentrated and demand increases faster than production cannot follow it.
Examine the impact of geopolitical tensions of the United States on the supply chains for critical minerals.
Chinese-American rivalry reshapes the world supply chains for critical minerals. China dominates many aspects of the critical mineral supply chain, but it particularly controls refining and treatment. While China only draws 13% of global lithium resources, it refines more than 60% of world lithium. Likewise, it deals with 85% of the rare earths in the world. This domination is not so linked to the allocation of resources, but rather a strategic industrial policy and capital investments over the decades.
In response, the United States rushes to reshape the supply chains, encourage domestic production and deepen partnerships with allies rich in resources such as Australia and Canada. The law on inflation reduction (IRA) has launched significant investments, while China retaliated with export controls on gallium and Germanium – noting that critical minerals are now a geopolitical negotiation program.
The result is a fragmenting supply chain, with competing industrial blocks forming. But relocation and diversification take time and, in the short term, the bottlenecks, price volatility and political risk will define the landscape.
What other geopolitical risks affect developments in the critical mineral industry?
Beyond the tensions of China-US, mineral supply chains become a new arena for power geopolitical struggles. I see three geopolitical risks.
Resources nationalism is booming. Indonesia has banned unprocessed nickel exports to build a national processing industry. Chile and Mexico nationalize the lithium reserves, aimed at raising the value chain – from mining to battery production. The message is clear: countries rich in minerals no longer want to be suppliers; They want a greater profits.
Territorial disputes over mineral wealth warm up. The Trump administration launched the idea of buying Greenland – rich in rare land – and recently began to emphasize that Ukraine’s mineral deposits play a role in reimbursement of American military aid. In Africa, the rebels supported by Rwanda seize the mining regions of the Democratic Republic of Congo.
Industrial policy occupies the front of the stage. Governments invest in the recycling of batteries, alternative chemistry and the resilience of the supply chain. Sodium-ion and solid state batteries could possibly reduce dependence on lithium and cobalt. But the geopolitical emergency pushes softer problems – such as environmental impact and labor rights – outside the agenda.
Analyze the correlation between energy security and national security from the point of view of Washington, Beijing and other stakeholders.
Energy security no longer concerns oil and gas. It is a question of knowing who controls the materials which feed the economy of clean energy.
For Washington, dependence on Chinese mineral refining is considered a strategic vulnerability. The United States doubles the resilience of the government’s intervention chain, incentives and investments related to defense.
For Beijing, mineral domination is a lever for geopolitical influence. China has spent decades obtaining supply chains, investing in African mines, Latin American lithium and strategic stocks. But China is also vulnerable – it is the world’s largest importer of nickel, copper and raw lithium in the world, which means that any disturbance of its upstream supply could resonate through its economy.
For Europe, Japan and emerging economies, the challenge is to sail on increasing economic nationalism. The EU has launched its critical law on raw materials to stimulate internal refining, but with limited resources, it remains dependent on imports. Meanwhile, countries rich in resources such as Indonesia and Chile enter the time to extract better offers from world buyers.
The world is entering an era when access to minerals is as strategic as access to oil once – but with a key difference: a lithium shortage will not arrest your EV, but that could prevent new ones under construction. Security risks are real, but they take place on a different time horizon.
Evaluate the implications of the China-US strategic competition market concerning China control over critical minerals.
Chinese-American competition from critical minerals reshapes the world markets, not only in trade but in industrial power. China dominates refining and treatment, not because it has all the resources, but because it has built the infrastructure. The West is now catching up, but mining and refining take time, creating fragmentation, price volatility and geopolitical lever effect.
However, real self -sufficiency is an illusion – China is also the largest importer of key materials. The supply chains are not linear but deeply intertwined. The real challenge is not only to secure more minerals, but to rethink the supply itself: investing in recycling, new battery chemings and urban mines to break dependencies and strengthen resilience.
Rather than a return to the dynamics of the free market, we are entering an era when industrial policy and geopolitical strategy dictate the future of critical mineral markets. Governments will continue to intervene strongly in supply chains, whether by subsidies, commercial restrictions or strategic partnerships.