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The World Economic Forum's 2026 Global Risks Report, released in January, ranks geoeconomic confrontation as the top short-term threat, and nowhere is this confrontation more visible than in the race for critical minerals. As the energy transition accelerates, competition over lithium, copper, cobalt, and rare earth elements has become the defining geopolitical struggle of 2026. China is projected to supply over 60% of refined lithium and cobalt and roughly 80% of battery-grade rare earths by 2035, while the United States and European Union scramble to counter this dominance through bilateral resource pacts, domestic stockpile programs, and strategic mining partnerships.
The Geopolitical Context: A New Age of Competition
The WEF's 2026 Global Risks Report describes an 'age of competition' marked by fragmentation and confrontation. For the short term (2026–2028), geoeconomic confrontation tops the list, fueled by tariffs, export controls, and supply chain weaponization. Half of surveyed leaders expect turbulent times over the next two years, and 68% believe the world will become more fragmented and multipolar over the next decade. The WEF Global Risks Report 2026 warns that geoeconomic confrontation could escalate into full-scale economic war, with critical minerals at the epicenter.
China's Dominance and the 15th Five-Year Plan
China's 15th Five-Year Plan (2026–2030), unveiled in March 2026, explicitly emphasizes global leadership in rare earth elements and critical minerals. The plan calls for strengthened technological capabilities, upgraded domestic industry, and improved export controls. China already controls 90% of global rare earth processing, 80% of tungsten, and 60% of antimony. Over 80% of European companies depend on Chinese supply chains for materials essential to defense, EVs, and renewable energy.
In 2025–2026, China introduced sweeping export controls on rare earths and associated technologies, triggering price spikes of up to sixfold outside China. Licensing approval rates for European firms dropped below 25% in some sectors. The China rare earth export controls 2026 are not about scarcity but about control—using temporary, reversible restrictions to maintain pricing power and extract concessions while discouraging Western investment in alternatives.
U.S. Response: Project Vault and the $7.5 Billion Stockpile
The United States has responded with unprecedented urgency. In February 2026, the Trump administration launched Project Vault, a $12 billion public-private initiative to establish the U.S. Strategic Critical Minerals Reserve—the most aggressive stockpiling effort since the Korean War. Backed by a $10 billion Export-Import Bank loan and nearly $2 billion in private investment, Project Vault creates a decentralized network of secure facilities storing essential raw materials.
Additionally, the Pentagon received $7.5 billion for critical minerals, including $2 billion for stockpiles, $5 billion for supply-chain investments, and $500 million for loans and technical assistance. The U.S. also launched the Forum on Resource Geostrategic Engagement (FORGE) in February 2026 as the successor to the Minerals Security Partnership, aiming to strengthen diversified, resilient supply chains with over 50 partner nations.
Strategic Partnerships: Australia, Ukraine, and the DRC
The U.S.-Australia Critical Minerals Framework Agreement, signed in October 2025, commits at least $1 billion in joint financing for mining and processing projects. Australia holds world-class geological reserves and hosts major miners like BHP, Rio Tinto, and Lynas Rare Earths—the only significant non-Chinese commercial-scale rare earth producer. Lynas has secured major supply deals, including a 12-year neodymium-praseodymium contract with Japan's JARE, and achieved first-ever samarium oxide production, becoming the only non-Chinese supplier of both light and heavy rare earths.
Ukraine presents another frontier. The U.S.-Ukraine minerals deal, signed in April 2025, established a $150 million joint investment fund focusing on critical minerals, energy, and infrastructure. Ukraine holds significant deposits of titanium, lithium, graphite, and rare earths, though modern geological data is lacking. The fund went live in early 2026, with first investment decisions expected by year-end. The US-Ukraine minerals deal 2026 represents a strategic effort to tap Eastern European resources while supporting post-war reconstruction.
In the Democratic Republic of the Congo, export restrictions on cobalt—a mineral essential for EV batteries—have shifted the global market from surplus to a projected deficit of 10,700 tonnes by 2026. Cobalt metal prices more than doubled following a February 2025 export ban and subsequent quota system. China's refining capacity has provided temporary relief, but alternative sources like Indonesian mixed hydroxide precipitate remain insufficient to meet demand.
New Entrants: Saudi Arabia and the UAE
Saudi Arabia is emerging as a major player in the critical minerals landscape. In January 2026, state-owned miner Maaden announced a $110 billion metals and mining investment plan over the next decade, aiming to triple phosphate and gold output and double aluminum production. The kingdom claims $2.5 trillion in mineral reserves, including lithium, rare earths, and other critical materials. A joint venture with U.S.-based MP Materials and the Pentagon will build a rare earth refinery, positioning Saudi Arabia as a regional processing hub.
The UAE is also investing heavily, further complicating the geopolitical landscape. These new entrants, while offering diversification, also introduce additional complexity to an already fragmented supply chain.
EU and Allied Responses
The European Union, heavily dependent on Chinese imports, has launched the ReSourceEU initiative and signed a Critical Minerals Action Plan with the United States in February 2026. The plan covers the full material life cycle—mining, processing, refining, and recycling—while exploring trade policies such as border-adjusted price floors and offtake agreements. The EU's Critical Raw Materials Act, in effect since May 2024, aims to ensure that no more than 65% of any strategic raw material comes from a single third country by 2030.
Expert Perspectives
"The convergence of the WEF Global Risks Report naming geoeconomic confrontation as the top risk, the U.S. announcing $7.5 billion in critical mineral stockpiles, and China's 15th Five-Year Plan cementing its dominance makes this the defining strategic theme of early 2026," notes geopolitical analyst Noah Kim. "We are witnessing a fundamental restructuring of global supply chains that will determine which nations lead the energy transition."
The Council on Foreign Relations recommends a 'leapfrog' strategy focused on innovation, recovery, and recycling rather than trying to match China's scale through traditional mining. Breakthroughs in AI-enabled materials research, mine waste recovery, and electronics recycling offer faster, cleaner paths to reducing dependence on Chinese supply chains.
FAQ
What are critical minerals?
Critical minerals are raw materials designated by governments as essential for national economies and security, with vulnerable supply chains. They include rare earth elements, lithium, cobalt, copper, and other materials vital for clean energy, defense, and advanced technologies.
Why is China dominant in critical minerals?
China controls 90% of global rare earth processing, 60% of refined lithium and cobalt, and has invested decades in building integrated supply chains. Its 15th Five-Year Plan explicitly prioritizes global leadership in critical minerals, while export controls allow Beijing to wield pricing power and extract geopolitical concessions.
What is Project Vault?
Project Vault is a $12 billion U.S. public-private initiative launched in February 2026 to establish the Strategic Critical Minerals Reserve. Backed by a $10 billion Export-Import Bank loan, it creates a decentralized network of secure storage facilities for essential raw materials.
How is the EU responding to critical mineral dependency?
The EU has enacted the Critical Raw Materials Act, launched ReSourceEU, and signed a Critical Minerals Action Plan with the U.S. The goal is to diversify supply chains, boost domestic mining and recycling, and ensure no single country supplies more than 65% of any strategic raw material by 2030.
What role do new entrants like Saudi Arabia play?
Saudi Arabia is investing $110 billion through Maaden to develop its $2.5 trillion in mineral reserves, including rare earths and lithium. Partnerships with U.S. firms and the Pentagon position the kingdom as a potential processing hub, offering an alternative to Chinese-dominated supply chains.
Conclusion: The New Geopolitical Chessboard
The critical minerals arms race is redrawing global power lines in real time. China's entrenched dominance, the U.S. and EU's frantic diversification efforts, and the emergence of new players like Saudi Arabia are reshaping alliances, industrial strategy, and long-term energy security. The critical minerals geopolitical competition 2026 is not merely an economic issue—it is the central strategic challenge of our time, with implications for defense, technology, and climate action. The window for Western nations to act is narrowing, and the decisions made in 2026 will echo for decades.
Sources
- World Economic Forum Global Risks Report 2026
- Council on Foreign Relations: Leapfrogging China's Critical Minerals Dominance
- China's 2026 Export Controls Redraw Global Supply Chain Map
- EXIM: Project Vault Launch
- CSIS: U.S.-Australia Critical Minerals Framework
- Kyiv Independent: U.S.-Ukraine Minerals Deal
- EU-U.S. Critical Minerals Partnership
- China's 15th Five-Year Plan: Critical Minerals
- CNN: Saudi Arabia's $2.5 Trillion Mineral Wealth
- DRC Cobalt Deficit 2026
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