Trans-Pacific View author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Thijs Van de Graaf – associate professor at Ghent University, energy fellow at the Brussels Institute for Geopolitics, and lead author of IRENA’s report on the geopolitics of critical materials (2023) – is the 451st in The Trans-Pacific View Insight Series.
Explain the role and relevance of critical minerals in the global energy transition.
The energy transition is, at its core, a materials transition. Batteries, wind turbines, solar panels, and electric vehicles (EVs) rely on lithium, cobalt, nickel, and rare earth elements – making clean technologies far more mineral-intensive than fossil fuel systems. An electric car, for example, requires six times more minerals than a conventional one, and an offshore wind farm needs nine times more minerals per megawatt than a gas plant.
But unlike fossil fuels, which must be constantly extracted and burned, minerals are a one-time input. Once mined, they can be used, reused, and recycled – shifting the security equation. The problem is not that we lack these materials, but that supply chains are fragile, refining is concentrated, and demand is rising faster than production can keep up.
Examine the impact of China-U.S. geopolitical tensions on critical minerals supply chains.
The China-U.S. rivalry is reshaping global supply chains for critical minerals. China dominates many aspects of the critical minerals supply chain, but it particularly controls refining and processing. While China only mines about 13 percent of global lithium resources, it refines over 60 percent of the world’s lithium. Similarly, it processes 85 percent of the world’s rare earths. This dominance is not so much linked to resource endowment, but rather strategic industrial policy and capital investment over decades.
In response, the U.S. is racing to reshape supply chains, incentivize domestic production, and deepen partnerships with resource-rich allies like Australia and Canada. The Inflation Reduction Act (IRA) has kickstarted major investment, while China has retaliated with export controls on gallium and germanium – signaling that critical minerals are now a geopolitical bargaining chip.
The result is a fragmenting supply chain, with competing industrial blocs forming. But reshoring and diversification take time, and in the short term, bottlenecks, price volatility, and political risk will define the landscape.
What other geopolitical risks are affecting developments in the critical minerals industry?
Beyond China-U.S. tensions, mineral supply chains are becoming a new arena for geopolitical power struggles. I see three geopolitical risks.
Resource nationalism is surging. Indonesia has banned unprocessed nickel exports to build a domestic processing industry. Chile and Mexico are nationalizing lithium reserves, aiming to move up the value chain – from mining to battery production. The message is clear: mineral-rich countries no longer want to be just suppliers; they want a bigger cut of the profits.
Territorial disputes over mineral wealth are heating up. The Trump administration floated the idea of buying Greenland – rich in rare earths – and recently has begun insisting that Ukraine’s mineral deposits play a role in repaying U.S. military aid. In Africa, Rwanda-backed rebels are seizing key mining regions in the Democratic Republic of the Congo.
Industrial policy is taking center stage. Governments are investing in battery recycling, alternative chemistries, and supply chain resilience. Sodium-ion and solid-state batteries could eventually reduce reliance on lithium and cobalt. But geopolitical urgency is pushing softer issues – like environmental impact and labor rights – off the agenda.
Analyze the correlation between energy security and national security from the perspectives of Washington, Beijing, and other stakeholder countries.
Energy security is no longer just about oil and gas. It’s about who controls the materials that power the clean energy economy.
For Washington, reliance on Chinese mineral refining is seen as a strategic vulnerability. The U.S. is doubling down on supply chain resilience through government intervention, incentives, and defense-linked investments.
For Beijing, mineral dominance is a lever of geopolitical influence. China has spent decades securing supply chains, investing in African mines, Latin American lithium, and strategic stockpiles. But China is also vulnerable – it is the world’s largest importer of raw nickel, copper, and lithium, meaning any disruption in its upstream supply could reverberate through its economy.
For Europe, Japan, and emerging economies, the challenge is navigating growing economic nationalism. The EU has launched its Critical Raw Materials Act to boost domestic refining, but with limited resources, it remains dependent on imports. Meanwhile, resource-rich countries like Indonesia and Chile are seizing the moment to extract better deals from global buyers.
The world is entering an era where access to minerals is as strategic as access to oil once was – but with a key difference: a lithium shortage won’t shut down your EV, but it might prevent new ones from being built. The security risks are real, but they play out over a different time horizon.
Assess the market implications of China-U.S. strategic competition regarding China’s control over critical minerals.
The China-U.S. competition over critical minerals is reshaping global markets, not just in trade but in industrial power. China dominates refining and processing, not because it has all the resources, but because it built the infrastructure. The West is now racing to catch up, but mining and refining take time, creating fragmentation, price volatility, and geopolitical leverage.
Yet true self-sufficiency is an illusion – China is also the largest importer of key raw materials. Supply chains are not linear but deeply interwoven. The real challenge is not just securing more minerals but rethinking supply itself: investing in recycling, new battery chemistries, and urban mining to break dependencies and build resilience.
Rather than a return to free-market dynamics, we are entering an era where industrial policy and geopolitical strategy dictate the future of critical minerals markets. Governments will continue to heavily intervene in supply chains, whether through subsidies, trade restrictions, or strategic partnerships.
