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The New Geopolitics of Critical Minerals
In early 2026, the weaponization of critical minerals through export controls has escalated into a defining feature of global geopolitics. China, the United States, and the European Union have all enacted or tightened restrictions on rare earths, lithium, gallium, and germanium, triggering a strategic realignment reminiscent of the 1970s oil shocks. The global scramble for critical mineral security is now redrawing the map of industrial power, with profound implications for defense, electric vehicle (EV) manufacturing, and green energy deployment worldwide.
China's Dominance in Processing and Export Leverage
China controls approximately 60% of global rare earth mining and an overwhelming 90% of processing capacity. In 2025, Beijing expanded its export control regime to include gallium, germanium, and antimony—materials essential for semiconductors, infrared optics, and military applications. By early 2026, these measures were tightened further, requiring special licenses for shipments to sensitive end-users. "China is using its near-monopoly on processing as a strategic lever," explains Dr. Elena Marchetti, a resource security analyst at the European Centre for Geopolitical Studies. "This is not just about trade; it is about industrial coercion."
The impact of Chinese export restrictions on rare earths has been immediate. Prices for neodymium and dysprosium—key inputs for permanent magnets in EVs and wind turbines—surged by 35% in the first quarter of 2026 alone. Defense contractors in the US and Europe report delays in missile guidance systems and night-vision equipment due to shortages of gallium-based substrates.
Western Onshoring: The Minerals Security Partnership and FORGE
In response, Western nations have accelerated efforts to onshore critical mineral supply chains. The Minerals Security Partnership (MSP), launched in 2022, was succeeded in February 2026 by the Forum on Resource Geostrategic Engagement (FORGE), a US-led initiative that includes Australia, Canada, Japan, South Korea, and key EU members. FORGE aims to de-risk supply chains by funding mining and processing projects in allied countries.
Key projects include the Mountain Pass rare earth mine in California, which resumed operations in 2025 with expanded processing capacity, and the Dubbo Project in Australia, targeting zirconium and rare earth production by 2027. The Minerals Security Partnership Forum's strategic goals also include recycling and substitution technologies to reduce long-term dependency on Chinese processing.
EU Critical Raw Materials Act: A Regulatory Framework
The European Union is finalizing its Critical Raw Materials Act (CRMA) framework, expected to be adopted by mid-2026. The CRMA sets ambitious benchmarks: by 2030, the EU aims to extract 10% of its annual consumption of strategic raw materials, process 40%, and recycle 25%. The act also designates 34 critical raw materials, including 17 strategic ones, and streamlines permitting for mining projects within the bloc.
However, industry experts caution that onshoring will take years. "You cannot build a rare earth processing plant overnight," says Markus Weber, a supply chain consultant based in Berlin. "Environmental permitting, capital costs, and technical expertise are all bottlenecks. Meanwhile, China continues to tighten the screws."
Cascading Effects on Defense, EVs, and Green Energy
The export control regime is sending shockwaves through multiple sectors. In defense, the US Department of Defense has classified rare earth magnets and gallium nitride semiconductors as critical to national security, triggering the Defense Production Act to boost domestic output. Lockheed Martin and Raytheon have both announced joint ventures with Australian miners to secure long-term supply.
In the EV sector, Tesla and BYD are racing to develop magnet-free motors that use ferrite or induction technology, reducing reliance on rare earths. Meanwhile, lithium prices have stabilized after a 2024 crash, but new export controls from Chile and Argentina—key lithium producers—are raising concerns about a new wave of resource nationalism. The impact of resource nationalism on green energy deployment could slow the global energy transition if not managed carefully.
Expert Perspectives and Strategic Calculus
Geopolitical analysts view the critical minerals standoff as a long-term structural shift. "We are witnessing the birth of a new resource order," says Professor James Liu of the Center for Strategic and International Studies. "Countries that control processing nodes will wield disproportionate power. The US and EU are trying to build parallel systems, but it will take a decade or more to achieve meaningful independence."
China, meanwhile, is not standing still. Beijing has expanded its Belt and Road Initiative to include critical mineral investments in Africa and Latin America, securing off-take agreements for cobalt, lithium, and rare earths. The Belt and Road critical mineral investments in Africa are creating a complex web of dependencies that Western nations find hard to counter.
FAQ: Critical Minerals and Export Controls in 2026
What are critical minerals?
Critical minerals are raw materials essential for national economies and security, with vulnerable supply chains. They include rare earths, lithium, gallium, germanium, cobalt, and graphite, among others.
Why is China's processing dominance important?
China controls about 90% of global rare earth processing, giving it significant leverage over supply and prices. Export controls on processed materials can disrupt industries worldwide.
What is the EU Critical Raw Materials Act?
The CRMA is a regulatory framework aiming to secure EU supply of critical raw materials through domestic extraction, processing, recycling, and diversification of imports. It sets targets for 2030.
How do export controls affect EV manufacturing?
EV motors often use rare earth magnets. Export restrictions raise costs and prompt automakers to develop alternative motor technologies, such as ferrite or induction motors, to reduce dependency.
What is FORGE?
The Forum on Resource Geostrategic Engagement (FORGE) is a US-led initiative launched in February 2026 to replace the Minerals Security Partnership. It aims to build resilient critical mineral supply chains among allied nations.
Conclusion: A New Era of Resource Geopolitics
The weaponization of critical minerals is not a temporary disruption but a permanent feature of the global landscape. As the US, China, and the EU continue to deploy export controls, the race to secure supply chains will define industrial competitiveness for decades. Companies and governments must invest in diversification, recycling, and innovation to navigate this volatile new environment. The future of critical mineral supply chains will depend on strategic foresight and international cooperation—or the lack thereof.
Sources
- European Commission, Critical Raw Materials Act proposal, 2023-2026.
- U.S. Department of State, FORGE launch announcement, February 2026.
- International Energy Agency, Critical Minerals Market Review, 2025.
- Interviews with Dr. Elena Marchetti, Markus Weber, and Professor James Liu.
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