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Critical Minerals as the New Oil: How FORGE Reshapes Supply Chains

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• Geopolitics • • 8 min read • 0% read

In February 2026, the U.S. hosted a 54-country Critical Minerals Ministerial, launching FORGE and mobilizing $30B+ to challenge China's 60-80% processing dominance by 2035. This analysis examines the new geopolitical architecture reshaping supply chains for lithium, rare earths, and cobalt.

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Washington's 54-Country Ministerial Marks a Turning Point

On February 4, 2026, the United States hosted the inaugural Critical Minerals Ministerial in Washington, D.C., gathering representatives from 54 countries and the European Commission. Led by Secretary of State Marco Rubio and Vice President JD Vance, the event launched FORGE (Forum on Resource Geostrategic Engagement) as the successor to the Minerals Security Partnership (MSP), with South Korea chairing through June 2026. The ministerial produced 11 new bilateral framework agreements—with Argentina, Morocco, the Philippines, the UAE, the UK, and others—bringing the total to 21 deals in five months. Crucially, the U.S. government mobilized over $30 billion in letters of interest, investments, and loans for critical mineral projects, including a $10 billion loan for Project Vault, a domestic strategic reserve for critical minerals. This event represents the most consequential shift in the global race for strategic resources this year, moving from multilateral dialogue to concrete financing and alliance-building.

Why Critical Minerals Are the New Oil

Critical minerals—lithium, cobalt, rare earth elements, graphite, and nickel—are the building blocks of the 21st-century economy. They power electric vehicles (EVs), wind turbines, solar panels, semiconductors, AI infrastructure, and advanced defense systems. Just as oil shaped geopolitics in the 20th century, control over these minerals is defining strategic competition today. China currently dominates the processing stage, controlling roughly 90% of rare earth refining, 70% of cobalt processing, and 60% of lithium refining. According to the International Energy Agency (IEA), by 2035 China is projected to supply over 60% of refined lithium and cobalt and around 80% of battery-grade graphite and rare earths. This concentration creates extreme vulnerability for Western economies and militaries, making supply chain diversification a national security imperative. The geopolitics of critical minerals now rivals oil in strategic importance, driving the urgency behind FORGE and related initiatives.

FORGE: From Multilateral Dialogue to a Preferential Trade Zone

What Is FORGE?

FORGE—the Forum on Resource Geostrategic Engagement—is a plurilateral coalition designed to create a preferential trade-and-investment zone for critical minerals. Unlike the MSP, which focused on joint capital deployment, FORGE operates on a 'membership by trade' model: participation is conditioned on shared trade rules rather than pooled investment. Key features include coordinated price floors to counter adversarial market manipulation, adjustable tariffs (potentially enforced under Section 232), and rapid-response mechanisms for supply disruptions. Vice President JD Vance described the vision as a "preferred critical minerals trade zone protected from external shocks through enforceable reference prices." The U.S. is in initial talks with the EU and Japan about formalizing this platform, aiming to cover two-thirds of the global economy.

Bilateral Dealmaking Velocity

The Trump administration has signed 21 bilateral critical minerals framework agreements in just five months, a pace that analysts describe as unprecedented. These deals go beyond memoranda of understanding; they include binding commitments on investment screening, technology transfer, and offtake agreements. Notable examples include the U.S.-Ukraine Reconstruction Investment Fund (April 2025), which identified the Dobra lithium deposit, and agreements with Argentina for lithium, Morocco for cobalt and phosphate, and the Philippines for nickel. The U.S. bilateral resource deals are designed to link into FORGE's plurilateral architecture, creating a web of interconnected commitments that collectively reduce dependence on Chinese supply chains.

The $30 Billion Financing Surge

The ministerial showcased over $30 billion in mobilized U.S. government support for critical mineral projects. The centerpiece is Project Vault, a $10 billion Export-Import Bank (EXIM) direct loan establishing the U.S. Strategic Critical Minerals Reserve. This public-private partnership, with $2 billion in additional private capital, will stockpile essential raw materials across U.S. facilities to protect domestic manufacturers from supply shocks. Participating companies include Clarios, GE Vernova, Western Digital, Boeing, Hartree Partners, Mercuria Americas, and Traxys. Other notable investments include $1.3 billion for the Reko Diq copper-gold project in Pakistan and financing for rare earth processing facilities in Australia and Brazil. The Project Vault strategic reserve is designed to deliver a net positive return for taxpayers while ensuring stable access to materials for advanced manufacturing and defense.

Europe's Parallel Push: The Critical Raw Materials Act

The European Union is pursuing its own strategy through the Critical Raw Materials Act (CRMA), which entered into force in May 2024. The CRMA sets benchmarks for domestic extraction (10% of annual consumption), processing (40%), and recycling (25%) by 2030, while capping reliance on any single third country at 65% for strategic raw materials. In December 2025, the European Commission launched the ReSourceEU Action Plan, committing up to €3 billion ($3.5 billion) in 2026 to fast-track 60 strategic projects, including Vulcan Energy's German lithium extraction and support for Greenland Resources' molybdenum mine. The EU is also imposing export restrictions on scrap permanent magnets and waste lithium-ion batteries to non-OECD countries by September 2026, and establishing a European Critical Raw Materials Centre modeled on Japan's JOGMEC to coordinate joint purchasing and stockpiling. The EU has concluded 15 international partnerships, including with South Africa, and is targeting an agreement with Brazil next.

Gulf State Investments: A New Geopolitical Player

Gulf states—Saudi Arabia, the UAE, and Qatar—are pivoting from oil to critical minerals as part of their economic diversification strategies. Saudi Arabia's Vision 2030 aims to transform the mining sector into a key pillar, with investments in phosphate, gold, copper, and rare earth elements. The UAE has signed a bilateral framework with the U.S. under the ministerial and is participating in Pax Silica, the State Department's flagship initiative on AI and supply chain security. Qatar has joined Pax Silica as well. Gulf sovereign wealth funds are increasingly investing in mining projects across Africa, Central Asia, and Latin America, positioning themselves as midstream processors and financiers. This Gulf state critical minerals strategy adds a new dimension to the geopolitical architecture, as these capital-rich states can help bridge the financing gap for Western-led projects.

Can FORGE Challenge China's Dominance?

The central question is whether these initiatives can meaningfully challenge China's processing dominance. The Council on Foreign Relations (CFR) argues that the U.S. cannot out-mine or out-process China and should instead pursue a leapfrog strategy centered on innovation, including rare-earth-free magnets, waste-based recovery from mine tailings and e-waste, and recycling. China's state-backed supply expansion has flooded the market, suppressing prices—lithium prices have plummeted over 80% from their 2022 peak—making it difficult for new Western projects to compete on cost. However, FORGE's coordinated price floors and adjustable tariffs could create a protected market where allied producers can operate profitably. The Atlantic Council notes that while bilateral dealmaking velocity has been impressive, transforming these into a functioning plurilateral system covering two-thirds of the global economy remains a significant challenge. The challenge to China's mineral monopoly will depend on sustained political will, private sector participation, and technological breakthroughs.

Expert Perspectives

"Critical minerals are the new oil, and the 2026 Ministerial marks a decisive shift from talk to action," said a senior State Department official. "FORGE creates a preferential trade zone with enforceable rules, backed by over $30 billion in financing. This is how we de-risk supply chains and counter adversarial market manipulation." South Korean Foreign Minister Cho Hyun, chairing FORGE through June, expressed Seoul's commitment to expanding cooperation, identifying joint projects, and enhancing communication across the supply chain. However, analysts caution that China's deep integration into global supply chains—through ownership stakes, long-term contracts, and infrastructure investments—cannot be easily unwound.

FAQ

What is FORGE?

FORGE (Forum on Resource Geostrategic Engagement) is a U.S.-led plurilateral coalition launched in February 2026 as the successor to the Minerals Security Partnership. It aims to create a preferential trade-and-investment zone for critical minerals with coordinated price floors and adjustable tariffs to counter Chinese market manipulation.

How much financing has been mobilized?

The U.S. government has mobilized over $30 billion in letters of interest, investments, and loans for critical mineral projects, including a $10 billion EXIM loan for Project Vault, a domestic strategic reserve.

What is the EU's Critical Raw Materials Act?

The CRMA, in force since May 2024, sets EU benchmarks for domestic extraction (10%), processing (40%), and recycling (25%) of critical raw materials by 2030, while limiting reliance on any single country to 65%. The ReSourceEU Action Plan commits €3 billion in 2026 to fast-track strategic projects.

Can FORGE reduce dependence on China?

FORGE's coordinated price floors and bilateral deals aim to create a protected market for allied producers, but China's processing dominance (60-80% by 2035) and cost advantages mean that technological innovation and recycling will also be essential to reduce dependence.

What role do Gulf states play?

Gulf states like Saudi Arabia, the UAE, and Qatar are investing in mining and processing projects globally, using sovereign wealth funds to finance critical mineral supply chains. They have joined Pax Silica and signed bilateral frameworks with the U.S., positioning themselves as key midstream players.

Conclusion: A New Geopolitical Architecture

The 2026 Critical Minerals Ministerial and the launch of FORGE represent a paradigm shift in how Western allies approach strategic resource security. By combining bilateral dealmaking, plurilateral trade rules, massive public financing, and private sector partnerships, the U.S. and its allies are building a new geopolitical architecture around lithium, rare earths, and cobalt. Whether this architecture can meaningfully challenge China's processing dominance by 2035 remains uncertain, but the February 2026 Ministerial has set the stage for the most consequential competition in strategic resources since the oil crises of the 1970s. The energy transition and defense industries will be shaped by the outcome of this race.

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