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The global battle for critical minerals has entered a new, more intense phase in 2026, as the United States, European Union, and China compete for strategic control over lithium, cobalt, rare earths, and graphite. A wave of resource nationalism is fundamentally reordering global supply chains, with producer countries from Chile to the Democratic Republic of the Congo (DRC) imposing processing requirements and export controls to capture greater value. The February 2026 US Critical Minerals Ministerial, China's 15th Five-Year Plan projections to supply over 60% of refined lithium and cobalt by 2035, and the EU's struggle to scale financing for its 60 Strategic Projects under the Critical Raw Materials Act (CRMA) make this the most strategically urgent supply chain story of the year.
What Is Driving the Critical Minerals Race?
Critical minerals are the building blocks of the energy transition and advanced technologies. Lithium, cobalt, nickel, graphite, and rare earth elements are essential for electric vehicle (EV) batteries, wind turbines, solar panels, defense systems, and artificial intelligence hardware. The International Energy Agency (IEA) projects that lithium demand will grow fivefold by 2040, while copper faces a 30% deficit and lithium a 40% supply deficit, requiring an estimated $500 billion in mining capital investment. This soaring demand has transformed critical minerals from mere commodities into strategic assets, sparking a geopolitical contest that analysts at Chatham House and StoneX describe as a structural shift toward resource nationalism.
The global energy transition supply chains are now at the center of industrial policy and national security strategies worldwide.
Resource Nationalism: Producer Countries Take Control
Mineral-rich nations are increasingly asserting sovereignty over their resources. Indonesia's 2020 ban on raw nickel exports forced over $30 billion in downstream investment and boosted domestic processing to more than 50% of global nickel production, serving as a template for other nations. The DRC reclassified cobalt as a strategic mineral in 2018 and raised royalties from 2% to 10%. Chile's 2023 National Lithium Strategy requires majority state control over new projects, while Bolivia and Argentina have pushed for greater state oversight. Zimbabwe and Namibia banned raw lithium exports, and Mexico fully nationalized its lithium reserves in 2022.
These policies represent a structural shift where producing nations seek to capture more value from their mineral endowments rather than serving solely as raw material exporters. The lithium triangle geopolitics in South America exemplifies this trend, with governments renegotiating contracts and imposing local processing mandates.
Export Controls and Processing Requirements
Export restrictions on unprocessed ores have become a primary tool of resource nationalism. According to the OECD, the number of export control measures on critical minerals has tripled since 2020. China, which controls roughly 70% of global processing capacity for rare earths and 60% for lithium and cobalt, has used export controls on gallium, germanium, and graphite since 2023 to signal its strategic leverage. The EU's ReSourceEU Action Plan, announced in early 2026, includes export restrictions on scrap permanent magnets and aluminium, as well as a ban on lithium-ion battery waste exports to non-OECD countries from September 2026.
The US Response: FORGE and Bilateral Equity Deals
The second Trump administration has pivoted sharply away from multilateral approaches toward bilateral equity deals and price support mechanisms. On February 4, 2026, the US Department of State hosted the 2026 Critical Minerals Ministerial, led by Secretary of State Marco Rubio and Vice President JD Vance, with representatives from 54 countries and the European Commission. The event produced 11 new bilateral critical minerals frameworks or MOUs with countries including Argentina, Morocco, the UAE, and the UK, bringing the total to 21 deals in five months.
Secretary Rubio announced the creation of FORGE (Forum on Resource Geostrategic Engagement) as the successor to the Minerals Security Partnership. FORGE, chaired by South Korea, aims to create a preferential trade-and-investment zone for critical minerals featuring coordinated price floors to counter adversarial market manipulation. Vice President Vance outlined plans for "reference prices at each stage of production" maintained through adjustable tariffs. The US government has mobilized over $30 billion in letters of interest, investments, and loans to support critical mineral supply chain projects, including Project Vault—a $10 billion EXIM initiative to establish a domestic strategic reserve for critical minerals.
The US critical minerals stockpile strategy marks a return to Cold War-style resource security thinking, with the government acting as both financier and market maker.
The EU's Struggle: Financing the Critical Raw Materials Act
The European Union's Critical Raw Materials Act, which entered into force in May 2024, sets ambitious 2030 targets: at least 10% of demand from domestic extraction, 40% processing within the EU, 25% from recycling, and no more than 65% dependency on any single country for strategic materials. The CRMA has designated 60 Strategic Projects—47 within the EU and 13 in third countries—to boost capacity in lithium, copper, nickel, cobalt, graphite, rare earths, and platinum group metals.
However, financing remains the Achilles' heel. The European Commission adopted the ReSourceEU Action Plan in early 2026, announcing €3 billion ($3.5 billion) in funding for the year—far short of the estimated €200 billion needed to meet the 2030 targets. The European Investment Bank (EIB) has provided €250 million for Vulcan Energy's German lithium project, but analysts at the ODI argue that the EU lacks credible demand signals like price floors to mobilize private investment at scale. The second call for strategic projects closed on January 15, 2026, with over 160 applications, but the gap between policy ambition and financial commitment remains wide.
The EU Critical Raw Materials Act implementation challenges highlight the difficulty of building supply chain resilience without massive public investment.
China's Dominance and the 15th Five-Year Plan
China's 15th Five-Year Plan (2026–2030), agreed in March 2026, reinforces Beijing's strategic grip on critical minerals. Projections show China supplying over 60% of refined lithium and cobalt, 80% of battery-grade graphite and rare earths, and 70% of battery-grade manganese by 2035. The plan emphasizes boosting domestic production of rare earths and strategic metals, reducing reliance on foreign imports, and accelerating the shift toward renewable energy sources. China already controls roughly 85–90% of rare earth processing and 70% of global processing capacity for battery materials.
Beijing's export controls on gallium, germanium, and graphite—announced in 2023 and tightened in 2025—have sent shockwaves through global supply chains, demonstrating China's ability to weaponize its processing dominance. The 15th Five-Year Plan signals a strategic pivot toward resource sovereignty, with state-owned enterprises expected to expand overseas mining investments in Africa, Latin America, and Southeast Asia.
Implications for Energy Transition and Industrial Competitiveness
The critical minerals race has profound implications for the pace of the energy transition. Without diversified and secure supply chains, EV production targets, renewable energy deployment, and defense modernization programs face significant delays. The IEA warns that lithium and copper supply deficits could slow EV adoption and grid-scale battery storage deployment. The energy transition mineral supply risks are now a boardroom concern for automakers, battery manufacturers, and technology companies worldwide.
Emerging players are also entering the fray. Saudi Arabia, under Vision 2030, and the UAE are deploying sovereign wealth funds to secure critical mineral assets in Africa and Latin America, adding competitive pressure on Western diversification efforts. The Gulf states' investment-led approach contrasts with the US equity-deal model and the EU's regulatory framework, creating a multipolar landscape for critical mineral finance.
Expert Perspectives
"We are witnessing a structural shift where strategic stockpiling—once a crisis management tool—is now a core component of industrial and geopolitical strategy," said a senior analyst at Chatham House. "The US FORGE initiative and China's Five-Year Plan represent competing visions of how critical mineral supply chains should be organized."
"The EU has the policy framework but lacks the financial firepower," noted an ODI researcher. "Without credible demand signals like price floors, private capital will not flow at the scale needed to meet the 2030 targets."
Frequently Asked Questions
What are critical minerals?
Critical minerals are raw materials essential for energy transition technologies, defense systems, and digital infrastructure, including lithium, cobalt, nickel, graphite, rare earth elements, and copper. They are characterized by high economic importance and supply risk.
Why is resource nationalism increasing?
Resource nationalism is rising because the energy transition has dramatically increased the strategic value of critical minerals. Producer countries seek to capture more value through export controls, processing requirements, and state ownership, following Indonesia's successful nickel strategy.
What is the US FORGE initiative?
FORGE (Forum on Resource Geostrategic Engagement) is a US-led plurilateral coalition launched in February 2026 to create a preferential trade-and-investment zone for critical minerals, featuring coordinated price floors and bilateral framework agreements with over 20 countries.
How is the EU responding to critical mineral supply risks?
The EU's Critical Raw Materials Act (2024) sets 2030 targets for domestic extraction, processing, and recycling, and has designated 60 Strategic Projects. However, financing remains a challenge, with only €3 billion allocated for 2026 against an estimated €200 billion need.
What is China's role in critical mineral supply chains?
China dominates global processing, controlling roughly 70% of rare earth and lithium processing capacity. Its 15th Five-Year Plan (2026–2030) reinforces this dominance, with projections to supply over 60% of refined lithium and cobalt by 2035. China has also used export controls on gallium, germanium, and graphite as geopolitical leverage.
Conclusion: A Defining Contest of the Decade
The battle for critical minerals is becoming the defining economic and geopolitical contest of the 2020s. The US, EU, and China are pursuing fundamentally different strategies—bilateral equity deals, regulatory frameworks, and state-directed dominance, respectively—while producer countries leverage their resource endowments to capture greater value. The outcome will determine not only the pace of the energy transition but also the balance of industrial power and national security for decades to come. As the IEA's demand projections and supply deficit warnings make clear, the critical minerals race is only accelerating.
Sources
- US Department of State: 2026 Critical Minerals Ministerial
- Atlantic Council: US Critical Minerals Policy Goes Collaborative with FORGE
- ODI: Critical Minerals Geopolitics in 2026
- European Commission: Strategic Projects under CRMA
- Mining Magazine: EU to Spend €3B in 2026 on Critical Raw Materials
- Green Finance & Development Center: China's 15th Five-Year Plan Analysis
- Berkeley Political Review: Why Countries Are Taking Back Control of Critical Minerals
- Critical Strategic Metals: Resource Nationalism Overview
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