Coal fueled the first industrial revolution and oil defined the industrial and geopolitical order of the 20th century. Wars have been fought over it, alliances have been built around it, and economies have risen and fallen based on its price. Critical minerals are now rewrite this playbookdue to two major forces.
First, climate change has made continued reliance on fossil fuels untenable. Second, geopolitics has exposed oil itself as a strategic vulnerabilityused as weapons in conflicts, disrupted by wars and concentrated in unstable regions. Together, these forces are accelerating a historic shift from hydrocarbons to critical minerals.
Critical minerals are expected to support the next phase of technological and energy transformation. Yet instead of open and competitive markets, the world is seeing the rise of controlled supply chains, strategic alliances, industrial policies and economic nationalism. This is the new era of critical mineral mercantilism.
Unlike oil, critical minerals such as copper, graphite, lithium, cobalt, nickel and rare earths are not simple fuels. These are entries integrated into all technologies such as solar panels, wind turbines, batteries, electrolyzers, electric vehicles, semiconductors and advanced defense systems, highlighting their unique strategic value. As a result, countries are not only competing for access to energy, but also for control over entire supply chainsfrom mining and processing to manufacturing.
The urgency is immediate, but the supply response is slow. Developing capabilities upstream and mid-sector may take over 15 years oldwhile building a circular economy can be achieved in a relatively shorter time frame.
However, demand is accelerating rapidly in the current decade, driven by the global transition to clean energy technologies, commitments to decarbonization, climate change mitigation imperatives and international commitments made through forums such as the G20 and the COP. This imbalance places countries, especially large economies like India, in a difficult position: deep dependence on imports in an increasingly unstable geopolitical environment.
A recent study by the authors on Optimizing India’s Critical Minerals Import Portfolio highlighted the real complexity of this dependence. We examined how India can optimize its economy-wide critical mineral import portfolio using a model-based assessment approach of potential sourcing partners.
Our results indicate that India’s future essential mineral import portfolio is not uniform but sharply divided into three segments. Ores and their concentrates are tied to geography, dominated by resource-rich countries like Australia, Chile, Canada and the Democratic Republic of Congo. Intermediate and finished products, used in all sectors of the economy, are controlled by industrial and processing centers, with China at the center, alongside Japan and South Korea. Meanwhile, waste and recycled materials follow entirely different trade networks, dominated by China, Russia and regional trade hubs.
This segmentation reveals a crucial truth: mining security is not just about access to resources. It’s about controlling value chains.
China, more than any other country, has systematically positioned at the center of global value chains for critical minerals and transformed them into instruments of industrial and geopolitical power. Over the past two decades, China has systematically secured its overseas mining assets while simultaneously developing a dominant processing and refining capacity. Today he controls about 90 percent of rare earth processingas well as significant shares in the lithium, cobalt and graphite value chains.
It’s strategic. China effectively operationalized a modern form of mercantilism by securing upstream resources globally, building domestic industrial capacity, using scale to undermine global competition, and controlling technology and exports when necessary.
The result is a structural dependency that even advanced economies have struggled to reduce, despite subsidies, trade agreements and strategic alliances such as the Mineral Security Partnership (MSP) and the Quad. THE recently launched The Forum on Geostrategic Resource Engagement (FORGE), however, signals a more coordinated attempt to diversify supply chains, strengthen allied cooperation, and reduce overreliance on concentrated mineral processing centers.
For India, the challenge is not just dependency, but also time. National mining and processing ecosystems will take years to mature. The adoption of the circular economy in India, although promising, is still nascent. Yet demand for critical minerals in clean energy and defense is currently accelerating rapidly. This leaves imports as the immediate solution, but also the biggest vulnerability.
Analysis of study of the authors suggested that while strategic imports of raw materials will remain necessary, over-reliance on imported processed products amid increasing geopolitical fragmentation and supply chain vulnerabilities is increasingly unsustainable. At the same time, complete import independence is neither feasible nor economically efficient. This is where India risks finding itself locked into the lower value-added segment of the supply chain.
India’s response must be strategic and not reactive. THE National Mission on Critical Minerals (NCMM)launched in 2025 in recognition of the emergency, has the potential to realize its ambitions. First, it must build allied supply chains in leverage trade agreements and partnerships with countries outside China’s dominant network in Latin America, Southeast Asia, and Central Asia.
Second, India needs to invest across the entire value chain, from upstream mining to downstream midstream refining and manufacturing. Competing with China will require a long-term capital commitment, not short-term return expectations. Therefore, multilateral investment opportunities and cooperation with allies would be strategically well placed. At the same time, India faces the structural constraint of being a very price sensitive market. This means that any national value chain must be designed to remain cost competitive despite higher initial investments.
To achieve this, India can pursue co-investment models, technology partnerships and demand aggregation with allied countries such as Australia, Japan and Russia to achieve economies of scale and reduce input costs, rather than relying solely on protectionist measures such as price floors, which could drive up prices domestically.
Third, India has a unique opportunity to take the lead in circular economy systems. India already has a large informal recycling sector. Formalizing and scaling this could provide a strategic advantage in secondary materials sourcing. This would involve improving policies on collection, extraction and beneficiation, financial implications such as GST reverse charge mechanisms, constant improvement in technology, skilling and reskilling of workforce, and a strong and adaptive research and development segment.
Finally, India must make the difficult but necessary choice to prioritize. Attempting to meet the demands of defense and the energy transition simultaneously risks diluting strategic direction and intensifying pressure on critical minerals supply chains. Strategic sequencing rather than parallel expansion will therefore be essential, while maintaining a diverse energy mix that reduces over-reliance on critical minerals concentrated in specific clean energy technologies and supply chains, thereby ensuring long-term energy security and sustainability.
The world is redefining competition for resources. For India, the question is not whether it should participate but how. It can remain a price-sensitive importer at the mercy of global shocks, or become a strategic player shaping resilient, diversified and future-ready supply chains.
The window of choice is narrow. And in this new order of resources, delay is the costliest dependency of all.
Originally published under Creative Commons by 360infos™.