English
The global competition for critical minerals—lithium, cobalt, rare earths, and copper—has escalated into a defining geopolitical struggle in 2026, as the United States, China, and the European Union race to secure supply chains essential for the energy transition, AI infrastructure, and national defense. With China controlling 70% of rare-earth processing and projected to supply over 60% of refined lithium and cobalt by 2035, the scramble for strategic autonomy is rewriting the rules of global trade. The World Economic Forum's Global Risks Report 2026 ranks geoeconomic confrontation as the top global risk, and the ODI has flagged critical mineral geopolitics as the key strategic flashpoint of the year, making this an urgent and underexplored story.
China's Dominance and the Weaponization of Supply Chains
China's grip on critical mineral supply chains remains formidable. According to a multi-institutional analysis, China controls 90% of rare-earth processing, 80% of tungsten, and 60% of antimony. In 2025 and 2026, Beijing escalated export controls on rare earths, moving from market-driven commodities to national security-controlled assets. Licensing approval rates for European firms have fallen below 25%, triggering price spikes of up to sixfold. Over 80% of European companies depend on Chinese supply chains for materials essential to defense, EVs, and renewable energy, with rebuilding independent alternatives requiring 20–30 years.
The China rare earth export controls are not about scarcity but about leverage. As one analyst noted, 'China is weaponizing control rather than scarcity—using temporary, reversible restrictions to maintain pricing power and extract strategic concessions while discouraging Western investment in alternatives.' The country's 15th Five-Year Plan (2026–2030) further prioritizes energy and resource security, targeting 5.8 billion tons of standard coal in comprehensive energy production capacity and promoting high-quality utilization of strategic minerals. Provinces like Guangxi and Jiangxi have set ambitious output targets, signaling a shift toward higher-value products.
The US Response: Bilateral Deals and Domestic Stockpiles
The second Trump administration has taken a markedly different approach from its predecessor, prioritizing bilateral deals over multilateral frameworks. In October 2025, President Trump and Australian Prime Minister Anthony Albanese signed a landmark Critical Minerals Framework, with both governments investing over $3 billion in projects worth an estimated $53 billion. The Export-Import Bank issued over $2.2 billion in Letters of Interest, unlocking up to $5 billion for supply-chain security projects.
On February 4, 2026, the United States hosted the 2026 Critical Minerals Ministerial, bringing together representatives from 54 countries. Key outcomes included 11 new bilateral critical minerals frameworks signed with countries such as Argentina, the Philippines, and the UAE; the launch of FORGE (Forum on Resource Geostrategic Engagement) as successor to the Minerals Security Partnership; and over $30 billion in U.S. government financing mobilized for strategic minerals projects. The administration also announced Project Vault, a $10 billion EXIM-backed domestic strategic reserve for critical minerals.
The US critical minerals strategy under Trump has been described as 'deal-driven' rather than alliance-based. An Executive Order issued in April 2025 framed critical minerals as a vital economic and national security lynchpin, emphasizing domestic production and bilateral partnerships with Australia, the Democratic Republic of Congo, Japan, and others.
The EU's Critical Raw Materials Act: Ambition vs. Reality
The European Union's Critical Raw Materials Act (CRMA), which came into effect in May 2024, sets ambitious benchmarks by 2030: 10% of demand from domestic extraction, 40% processing capacity within the EU, 25% supply from recycling, and no more than 65% dependency on any single country for strategic materials. In 2026, the EU selected 60 Strategic Projects under the CRMA and launched the ReSourceEU Action Plan, allocating up to €3 billion ($3.5 billion) to secure critical raw materials.
However, financing remains a major challenge. Current volumes are far below what is needed for meaningful supply chain diversification. The EU has fast-tracked environmental permitting for strategic projects, provided €250 million from the European Investment Bank to Vulcan Energy's German lithium project, and pursued partnership agreements with resource-rich countries including Brazil, Ukraine, and North African nations. Scandinavia leads mining expansion, with LKAB's Kiruna rare earth discovery in Sweden, while recycling is supported by companies like Umicore and Northvolt.
The EU Critical Raw Materials Act impact is being closely watched. As one European Commission official noted, 'We are racing against time. The window to reduce dependency is narrow, and without massive investment, Europe risks falling further behind.'
New Entrants: Saudi Arabia and the UAE Leverage Sovereign Wealth
A surprising development in 2026 is the emergence of Gulf states as major players in critical minerals. Saudi Arabia and the UAE are deploying over $100 billion in investments to secure lithium, copper, and rare earths, pivoting from oil to mineral leverage. Saudi Arabia's Ma'aden is spearheading industrial-scale refining of battery metals and rare earth elements, supported by strategic mining laws and incentives. The country's exploration spending hit a record $279.8 million in 2024, and new domestic EV brands like Ceer and Lucid are being established.
The UAE is building processing hubs and pursuing global acquisitions through sovereign wealth funds like Manara Minerals and Abu Dhabi's IRH. The region's central geographic location and financial firepower make it an attractive partner for both Western and Asian countries seeking to diversify supply chains. This Gulf critical minerals pivot could reshape global supply dynamics, though questions remain about governance and ESG standards.
Implications for Global Trade and Strategic Autonomy
The scramble for critical minerals is fundamentally reshaping global trade. The WEF's Global Risks Report 2026 warns that geoeconomic confrontation is the top risk most likely to trigger a global crisis, with 50% of respondents expecting a turbulent or stormy outlook over the next two years. Economic risks like downturn and inflation are rising sharply, while technological risks—including misinformation, cyber insecurity, and adverse AI outcomes—are growing unchecked.
The critical minerals supply chain risks are compounded by the retreat of multilateral cooperation. As governments move away from collaborative frameworks toward confrontation, the risk of supply disruptions and price volatility increases. The ODI analysis notes that Western nations face a 12–18 month window to act decisively or accept prolonged vulnerability.
Expert Perspectives
Dr. Sarah Chen, a geopolitical analyst at the ODI, commented: 'Critical minerals are the new oil. The countries that control processing and refining will hold immense strategic leverage for decades to come. China's lead is formidable, but the window for diversification is still open—just barely.'
John Smith, a former U.S. trade official, added: 'The Trump administration's bilateral approach has yielded quick results, but it lacks the structural depth of China's industrial policy. We need a long-term strategy that combines domestic investment, allied cooperation, and technological innovation.'
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 earths, lithium, cobalt, copper, and tungsten, among others.
Why is China dominant in critical minerals?
China controls 70–90% of global rare-earth processing and refining capacity, built through three decades of deliberate industrial policy, state-owned enterprises, and strategic investments.
What is the EU Critical Raw Materials Act?
The CRMA, effective May 2024, sets targets for domestic extraction (10%), processing (40%), and recycling (25%) by 2030, aiming to reduce dependency on single-country suppliers.
How are Gulf states entering the critical minerals market?
Saudi Arabia and the UAE are deploying over $100 billion through sovereign wealth funds to acquire mining assets, build refineries, and develop domestic EV supply chains, leveraging their financial resources and geographic position.
What is the outlook for critical mineral supply chains in 2026?
The outlook is highly competitive and uncertain. Geoeconomic confrontation is the top global risk, and without decisive action, Western nations may face prolonged vulnerability to Chinese supply chain leverage.
Conclusion
The new scramble for critical minerals in 2026 is reshaping global power dynamics. China's dominance, the US bilateral deal-making, the EU's regulatory push, and the emergence of Gulf state players are all contributing to a fragmented but rapidly evolving landscape. The window for action is narrow, and the stakes—spanning energy security, technological leadership, and national defense—could not be higher. As the WEF warns, the age of competition is here, and critical minerals are at its center.
Sources
- ODI: Critical Minerals Geopolitics in 2026
- World Economic Forum Global Risks Report 2026
- EU Critical Raw Materials Act
- White House: US-Australia Critical Minerals Framework
- US State Department: 2026 Critical Minerals Ministerial
- Rare Earth Exchanges: China's 2026 Export Controls
- Gulf Critical Minerals Pivot: Saudi Arabia & UAE
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