At a recent Wilson Center event on the shifting geopolitics of critical minerals, Cory Combs, Associate Director at Beijing-based Trivium China, noted that “the nature of global resource competition is changing—and quite rapidly.”

New developments seem to surface every week as countries around the world scramble to create secure supply chains for critical minerals, which are central inputs in our green energy technologies, digital economy, defense systems, and more. On March 10, President Biden met with the head of the European Commission, Ursula von der Leyen, to talk about critical minerals trade. The meeting set in motion an agreement that will allow EU-sourced minerals to qualify for the United States' recent—and very big—EV-related subsidies. The EU will also soon release a Critical Raw Materials Act. Meanwhile, Australia and India are discussing their own critical minerals trade deal.

Amid a quickly evolving landscape, Combs said that understanding the structural forces that influence trends in competition and cooperation is essential. “Those forces are the only means we have to anticipate what comes next,” he said, “and to hopefully shape it in a mutually beneficial direction."

What Makes a Mineral “Critical”?

Some minerals, including those central to EV batteries, are deemed “critical” by all three major geopolitical actors in the trade: the EU, the U.S., and China. But their lists of critical minerals aren’t identical. The U.S. list features 50 essential minerals, including well-known materials like copper and lesser-known resources like vanadium and tantalum. The EU, for its part, names 30 critical minerals, and China has 37.

There are discrepancies, Combs said, because the resources each actor identifies as “critical” are informed by its unique goals and industrial structures. "Critical minerals cover [governments'] most strategic objectives," noted Combs. In a way, they represent "an economic analysis of what's important for industry today and what’s important for the industry we want to build tomorrow.”

Supply Chain Dependencies Cause Concern

Critical minerals feed into complex supply chains that encompass every region of the world, but key players have emerged. Wilson Center Global Fellow Jojo Nem Singh shared a figure showing how upstream extraction largely happens in Global South countries like Indonesia, Chile, Peru, China, and the DRC. Processing, by contrast, is heavily concentrated in China.

Only recently, however, has this configuration stoked fear about supply disruptions and provoked a deluge of policy responses. ECSP Director Lauren Risi explained that the U.S. is now tackling critical mineral supply dependence head-on for several reasons, including the urgency of climate action, the ripple effects experienced from recent supply chain disruptions, and the increasingly complicated nature of the U.S.-China relationship.

The last issue in particular is gaining attention and prompting concern over the kinds of levers China could pull in the critical minerals supply chain. “What if China institutes some economic trade control or other economic measures?” asked Combs. “That’s not a secure position to be in.”

Significant restrictions on access to critical minerals, whether from Chinese competition or other pressures, would pose serious challenges for the U.S.—not least because its current decarbonization path depends on such minerals. “What we don't want is a disruption of the supply chain to the extent that we don’t know whether we can produce wind turbines [or] electric vehicle cars,” Nem Singh noted.

These factors together have considerably accelerated U.S. policymaking in the critical mineral space. “Not quite overnight - but close to it - access to critical minerals has risen to a national security priority in the US,” Risi said.

Helaina Matza, Deputy Special Coordinator for the Partnership on Global Infrastructure Investment at U.S. Department of State, described how the U.S. government is pursuing solutions to address this priority. For example, the Biden Administration recently passed a trifecta of legislation that put billions of dollars towards clean energy tech and infrastructure: the Inflation Reduction Act, the CHIPS and Science Act, and the Bipartisan Infrastructure Law.

Past a Zero-Sum Approach with China

For all its action on critical minerals though, the U.S. is still playing catch-up. Risi noted that China has been focused on critical minerals for a long time—a strategic call that has contributed to today’s uneven playing field. Now, the growing green energy transition is further cranking up China’s interest in critical minerals.

Jennifer Turner, Director of the Wilson Center’s China Environment Forum, cited Xi Jinping’s commitment to ending the production of internal combustion engines by 2035. And as Beijing orients towards EV batteries and other aspects of what Combs calls a “lower-carbon, higher-value-add economy,” it is looking for its own secure supply of green tech minerals. China is currently worried about Australia’s large share of global lithium production, for example. “While the US focuses on Chinese dominance of lithium processing,” Combs said, “China is very concerned that a U.S. ally controls a good portion of [its] lithium raw supply.”

Against this backdrop, Risi observed that the antagonism in the critical mineral discourse between the U.S. and China risks constraining global progress on clean energy and undermining the two nations’ shared goals on climate mitigation. Some healthy competition on green energy and minerals can be good for everyone, noted Risi, “but it can’t be a zero-sum game,” she said. “In the context of climate change, cooperation is key.” Nem Singh pointed out that cooperation is also necessary because certain mineral dependencies are likely inevitable—this could be the case with rare earth elements, for instance, given China’s overwhelming control of the resource.

Despite the current fractious climate, Turner reminds us that there are strong precedents for greater cooperation with China on green energy. “Well before the Obama administration,” recalled Turner, “U.S. foundations, NGOs, think tanks, universities, the state of California, and other states were working with Chinese counterparts on a lot of clean energy issues.” In fact, China was seen as a laboratory for clean energy technologies.

Cooperation to Diversify and Develop  

Identifying mutually beneficial opportunities with China is one part of the puzzle. But securing resilient supply chains and propelling the clean energy transition also requires the United States to work with many other nations—both bilaterally and multilaterally. “We are completely dedicated to ensuring that we do everything we can to kickstart our economy and be a leader in this space—but we understand that we can't do it alone,” emphasized Matza.  

The United States is already collaborating with countries on this issue through a number of programs. The Partnership for Global Infrastructure Investment brings together G7 leaders to support transformative infrastructure projects around the world, including through investments in responsible mineral mining. Matza also spoke about the U.S.-led Mineral Security Partnership (MSP), a joint effort between 12 countries and the EU to promote critical mineral production, processing, and recycling with high Environmental, Social, and Governance (ESG) standards.

At a recent meeting in Cape Town, Matza said, the MSP “released top-level policy principles on ESG and good governance standards with our African partners in the room, hashing them out and thinking about how they will be applied.”

These partnerships with producing countries across the globe can help diversify mineral supply chains and protect against shocks. “No one wins if there are just two epicenters for batteries and EVs, the U.S. and the Chinese market,” said Matza. But the partnerships also can help ensure that global green transition is a “meaningful and transformative” development avenue for producing countries. “With political will,” she said, “there's an opportunity for these countries to develop their resources in a way that's meaningful for their economies and for their people.”

The topic of more intensive cooperation with producing countries elicited a number of observations about principles and practice. Nem Singh said that such efforts should align with the development strategies of producing countries and help them achieve their own priorities and interests, which tend to include value-added processing. Nem Singh also noted the importance of producing countries having ownership over their own mining reforms. Matza agreed that the United States and others can encourage countries to uphold standards, “without trying to rewrite the rulebook on their behalf.” She also added that consuming countries must “share and align their top-level policy principles” to ensure that their limited funding goes as far as possible.

Dialing down the emphasis on competition and looking for opportunities to better understand and meet countries’ different needs is essential, said Nem Singh, “so that whatever the U.S. interest is, it goes together with the interests of South Korea, of Japan, of African countries who want these minerals extracted for developmental purposes.”

Matza agreed: “At the end of the day, we want to see this market operate in a way that can meet the goals of every economy, ours included.”

Written by Claire Doyle, edited by Richard Byrne. 

For more on critical minerals at the Wilson Center, visit our topic page. Read a new policy brief on US Governance on Critical Minerals, by Sharon Burke and Claire Doyle.

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