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By Kenny MacEwen
As the world accelerates toward electrification and clean energy, a new geopolitical contest is emerging—not over oil but the minerals that power the 21st century. Nations are scrambling to secure supplies of lithium, cobalt, nickel, and rare earth elements, all essential to electric vehicle (EV) batteries, wind turbines, and semiconductor manufacturing. China is at the center of this battle, having built a near-monopoly over critical mineral refining and processing, leaving Western nations in a precarious position.
The global push for energy independence is no longer just about reducing reliance on fossil fuels but about securing stable and diversified supply chains for the raw materials that drive modern economies. Western governments are racing to develop domestic mining, forge new trade agreements, and invest in mineral recycling to break free from dependence on foreign suppliers. But with demand skyrocketing and geopolitical tensions rising, the question remains: who will control the future of mineral supply chains?
China dominates the global supply chain for critical minerals, controlling over 60% of rare earth element production and over 80% of the world’s refining capacity for materials like lithium, cobalt, and graphite. This grip on processing is far more significant than raw material production itself, as refining is the supply chain’s most complex and capital-intensive part.
Even though countries like Australia, Chile, and the Democratic Republic of the Congo are leading producers of raw minerals, much of their output is shipped to China for processing before being exported to manufacturers worldwide. This creates a strategic chokepoint that China has not hesitated to use as leverage in geopolitical disputes.
In 2010, China briefly cut rare earth exports to Japan over a territorial dispute, sending shockwaves through global supply chains. More recently, amid rising tensions with the United States, Beijing has imposed export restrictions on gallium and germanium, two critical metals used in semiconductors and defense applications. These moves highlight how China’s dominance in mineral processing is not just an economic advantage but a geopolitical weapon.
Western nations are scrambling to reduce their reliance on Chinese-controlled supply chains, but breaking free from this dependence is a massive undertaking. Developing new mines and processing facilities takes years, if not decades, and requires billions in investment—something the West has only recently begun to address.
The vulnerabilities exposed by China’s control over minerals have led to a renewed push for mining independence in North America and Europe. Governments are now fast-tracking projects, offering incentives, and introducing new policies to revitalize domestic mineral production.
The Inflation Reduction Act (IRA) in the United States includes provisions to strengthen domestic supply chains for battery materials, offering tax credits and funding for critical mineral extraction and processing. The Biden administration has also invoked the Defense Production Act to prioritize domestic mining projects, recognizing that access to key minerals is a matter of national security.
Canada, home to significant deposits of nickel, lithium, and cobalt, is positioning itself as a leader in responsible mining. The Canadian government has launched a critical minerals strategy to expand production and ensure high environmental and labor standards—an area where China has faced scrutiny.
In Europe, the European Union’s Critical Raw Materials Act seeks to boost domestic mining, diversify supply chains, and accelerate the permitting process for new projects. The EU has also aggressively pursued trade deals with mineral-rich nations in Africa and Latin America to establish alternative supply routes that reduce dependency on China.
Just as the global response to conflict diamonds in the late 1990s brought attention to the ethical sourcing of gemstones, a similar push is now taking shape around battery materials and other critical minerals. End-users, such as electric vehicle manufacturers, electronics companies, and clean energy developers, are increasingly requesting traceability to ensure that raw materials are produced and sourced responsibly. This trend poses a challenge for China, where supply chains are often opaque, and labor standards face scrutiny. In contrast, North American and European companies with globally distributed assets and strong governance practices are well-positioned to lead in building transparent, ethical mineral supply chains.
However, despite these efforts, scaling up domestic production faces significant hurdles. New mines require extensive permitting, environmental reviews, and community engagement, all of which can slow development. Additionally, refining and processing capabilities remain weak, as much of the world’s expertise and infrastructure is still concentrated in China.
While expanding domestic mining is a long-term goal, Western nations are also looking at alternative strategies to secure raw materials in the short term. Three key approaches are gaining traction: mineral recycling, urban mining, and strategic trade agreements.
Recycling critical minerals from end-of-life batteries, electronics, and industrial waste is becoming an increasingly viable way to reduce reliance on freshly mined materials. Battery recycling companies like Redwood Materials in the U.S. and Northvolt in Europe, are developing closed-loop supply chains, recovering lithium, cobalt, and nickel from used EV batteries and reusing them in new ones. This is critically important, as many companies—particularly in sectors like autonomous mining—lack a clear end-of-life plan for handling batteries that begin to degrade roughly a decade after their commissioning. Without proper recycling strategies, these materials risk becoming a growing source of waste just as global demand for them accelerates.
Another emerging solution is urban mining—extracting valuable metals from discarded electronic waste. The world produces over 50 million tons of electronic waste yearly, including recoverable rare earth elements, gold, and copper. Scaling up urban mining could help mitigate supply chain shortages while reducing the environmental impact of traditional mining.
Western nations are aggressively pursuing trade agreements with resource-rich countries to ensure a steady supply of minerals without solely relying on domestic production. The U.S. has struck deals with Australia, Canada, and South American nations to secure lithium and rare earth supplies, while the EU is forging partnerships in Africa to develop responsible mining projects.
However, securing these agreements requires economic negotiation and geopolitical maneuvering. Foreign interests have historically exploited many mineral-rich nations, leading to skepticism about Western investments. Companies and governments must commit to ethical sourcing, fair labor practices, and environmental sustainability to build long-term partnerships.
The battle for mineral supply chains is only intensifying. As demand for critical minerals surges, supply constraints could lead to economic disruptions, trade conflicts, and strategic realignments between nations. Countries that secure stable and diversified mineral supplies will gain a competitive edge in industries ranging from electric vehicles to defense and technology manufacturing.
Reducing Western nations’ reliance on China will require a multi-pronged approach: investing in domestic mining and refining, building strong trade partnerships, and advancing recycling and urban mining initiatives. The challenge is not just about producing more minerals—it’s about ensuring long-term security, sustainability, and resilience in global supply chains.
The stakes are high, and the window for action is narrowing. Nations that fail to secure their mineral supply chains risk falling behind in the technological and economic dominance race. The question is no longer whether the West will act but whether it can do so quickly enough to shift the balance of power before the next supply crisis hits.
At TMG, we understand the geopolitical, economic, and operational challenges of securing critical mineral supply chains. Our expertise in risk assessment, supply chain optimization, and strategic planning helps mining companies and investors navigate the complexities of an increasingly competitive global market.
We work with industry leaders to evaluate new mining opportunities, strengthen resource security, and integrate sustainable extraction and processing methods. Whether it’s assessing geopolitical risks, identifying investment opportunities, or streamlining mineral supply strategies, TMG provides the insight and expertise necessary to stay ahead in the evolving landscape of critical mineral supply.
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