CRITICAL MINERALS AND GLOBAL GEOPOLITICS

Introduction

The issue of critical minerals has emerged as a major geopolitical, economic and strategic concern globally. Countries are increasingly competing for access to minerals essential for:

• Electric vehicles (EVs)
• Renewable energy systems
• Microchips and semiconductors
• Defence technologies
• Artificial Intelligence infrastructure
• Energy storage systems

The recent discussions surrounding Greenland, Ukraine, China’s export controls, and the United States’ efforts to secure mineral supply chains have once again brought critical minerals into global focus.

ANALYSIS

What are Critical Minerals?

Critical minerals are those minerals which are considered:

• Essential for economic development
• Vital for national security
• Difficult to obtain due to:
  • limited geographical concentration,
  • processing dependence,
  • geopolitical risks,
  • or supply-chain vulnerabilities.

Different countries maintain different critical mineral lists depending upon:

• industrial structure,
• technological needs,
• resource availability,
• and strategic priorities.

For example:

• Copper is included in the United States’ critical minerals list,
• but it is not included in the United Kingdom’s list.

The United Kingdom currently has 34 minerals in its critical minerals list, including:

• aluminium,
• cobalt,
• helium,
• and lithium-related materials.

Major Critical Minerals and Their Uses

Rare Earth Elements (REEs)

Rare earth elements are strategically important minerals possessing unique:

• electrical properties
• magnetic characteristics

These include:

• 17 lanthanide elements
• Scandium
• Yttrium

They are indispensable for:

• semiconductors,
• renewable energy technologies,
• telecommunications,
• military systems,
• healthcare devices,
• and AI hardware.

Important Rare Earth Elements and Uses

Rising Global Demand for Critical Minerals

The rapid expansion of:

• Artificial Intelligence
• Electric Vehicles
• Green Hydrogen
• Renewable Energy
• Battery Manufacturing
• Advanced Electronics

has sharply increased global demand for critical minerals.According to the International Energy Agency (IEA), this demand is expected to rise significantly in the coming decades.

Are Rare Earths Actually Rare?

Despite the term “rare earths”, many of these minerals are not actually extremely rare in Earth’s crust.For example:

• Neodymium occurs at nearly 20 parts per million
• whereas Copper occurs at around 27 parts per million

The challenge lies more in:

• extraction,
• processing,
• refining,
• environmental impacts,
• and economic viability.

Global Distribution of Critical Mineral Reserves

Major Rare Earth Reserve Holders

Major Mineral Producing Countries

Australia

Australia is a leading producer of:

• iron ore,
• gold,
• zinc,
• nickel,
• cobalt,
• and lithium.

Indonesia

Indonesia contributes nearly:

• 50% of global nickel production

making it central to global EV battery supply chains.

Chile

Chile remains one of the world’s leading:

• copper exporters,
• and major lithium reserve holders.

Future Supply Concerns

The International Energy Agency has warned that:

• existing mining projects may satisfy near-term demand,
• but from the 2030s onwards, shortages may emerge particularly in:
  • Copper
  • Lithium

Such deficits may affect:

• renewable energy transition,
• EV manufacturing,
• and semiconductor industries.

China’s Dominance in Critical Minerals

Processing Dominance

China dominates the processing and refining of many critical minerals, including:

• rare earth elements,
• lithium,
• cobalt,
• and graphite.

Examples of China’s Dominance

Cobalt

• Democratic Republic of Congo produced nearly 70% of global cobalt supply in 2021.
• However, nearly 90% of this cobalt was refined in China.

Lithium

• Australia and Chile accounted for over 75% of global lithium supply in 2021.
• Yet, around 72% of lithium refining occurred in China.

Rare Earth Processing

China controls:

• more than 95% processing capacity for certain rare earth elements.

Reasons Behind China’s Dominance

China achieved dominance due to:

• early strategic investments,
• large-scale refining infrastructure,
• lower environmental standards,
• state-backed industrial policies,
• and long-term planning in green technologies.

According to experts from the London School of Economics (LSE) Grantham Research Institute, China anticipated the rise of green energy nearly a decade earlier and strategically built processing capabilities.

Strategic Concerns for Other Countries

United States

The United States fears excessive dependence on China for:

• defence technologies,
• semiconductors,
• advanced manufacturing,
• and AI infrastructure.

A 2023 US Government Select Committee Report warned that failure to secure critical mineral supply chains could:

• halt defence production,
• and disrupt advanced technology manufacturing.

European Union

The European Central Bank (ECB) in 2025 highlighted vulnerabilities arising from:

• geopolitical disruptions,
• supply concentration,
• and China’s pivotal role in rare earth supply chains.

Emerging Global Responses

Countries are increasingly attempting to:

• diversify mineral supply chains,
• establish domestic refining capabilities,
• secure overseas mining partnerships,
• and reduce dependence on China.

United States–Australia Critical Minerals Partnership

In October 2025, the United States signed a critical minerals agreement with Australia to strengthen:

• mineral supply security,
• refining cooperation,
• and rare earth production.

Greenland and Ukraine in Strategic Competition

Recent international interest in:

• Greenland
• Ukraine

is partly linked to their:

• rare earth reserves,
• lithium potential,
• and strategic mineral wealth.

This reflects the growing connection between:

• geopolitics,
• energy transition,
• and mineral security.

Environmental Concerns

Mining and processing of critical minerals often lead to:

• land degradation,
• water contamination,
• habitat destruction,
• and pollution.

Rare earth mining activities in China have been associated with:

• environmental damage,
• and land acquisition disputes.

Thus, balancing:

• sustainability,
• economic growth,
• and strategic security

has become a major global challenge.

Implications for India

India possesses significant reserves of:

• rare earth elements,
• graphite,
• titanium,
• bauxite,
• and lithium potential.

India’s growing focus includes:

• domestic mineral exploration,
• processing infrastructure,
• critical mineral missions,
• and international partnerships.

India is also increasingly emphasizing:

• supply-chain resilience,
• green technology manufacturing,
• and strategic resource security.

NECESSARY STATIC PART

International Energy Agency (IEA)

European Central Bank (ECB)

London School of Economics (LSE) – Grantham Research Institute

Important Reports / Assessments Mentioned

Updated - 05 February 2026 ; 05:30 PM | News Source – BBC News