Who will control critical minerals? The US response to Chinese dominance
The energy transition reorganises production chains and redefines power relations. At the heart of this dispute are so-called critical minerals — resources essential for the economic and technological security of countries seeking a leading role in sectors such as robotics, semiconductors, batteries, renewable energy and the military industry. The question that emerges is direct: who will control these strategic inputs?
In recent years, the markets for these minerals have become even more concentrated. Between 2020 and 2024, three countries accounted for 86% of global refining — an increase from the 82% recorded at the beginning of the decade. Almost all of this expansion came from a single supplier in each case: Indonesia for nickel, and China for the refining of minerals such as copper, lithium, cobalt, graphite and rare earths.
Against this backdrop, the United States has begun to structure a response. In February, in Washington, Secretary of State Marco Rubio and Vice President J.D. Vance gathered representatives from around 55 countries to discuss the creation of a trade bloc focused on critical minerals. Among the participants were major producers, such as Brazil, South Africa, Saudi Arabia, the Democratic Republic of the Congo, Australia, India and Japan.
The proposal includes typical tools of industrial and trade policy: the establishment of price floors, market standards, subsidies and demand guarantees. Although China was not explicitly mentioned, the objective is clear: to reduce American dependence on supply chains dominated by Chinese companies.
In the case of rare earths, Chinese dominance is particularly pronounced. The country accounts for around 70% of global mining, more than 90% of refining and processing, and between 94% and 98% of the production of permanent magnets — indispensable components for wind turbines, electric motors and electronic equipment. This control over the entire value chain grants Beijing significant leverage over prices, technological innovation and geoeconomic dynamics.
The initiative gained urgency following the escalation of trade tensions between Washington and Beijing. In 2025, China leveraged its dominant position in critical minerals in response to tariffs imposed by the Donald Trump administration, exposing American vulnerabilities in this sector.
In addition to multilateral coordination, the US launched the so-called Project Vault, which provides for the creation of strategic stockpiles valued at $12 billion in critical minerals. Concurrently, the Department of Energy and the Department of Defence have expanded funding programmes destined to strengthen supply chains deemed strategic. Furthermore, the US has been conducting bilateral negotiations with various African countries in the area of minerals.
However, the American strategy differs from the Chinese one in a fundamental way. While Chinese companies frequently participate directly in overseas mining and infrastructure projects (foreign direct investment), American companies tend to operate through supply contracts. These agreements guarantee access to a share of mineral production in exchange for financing and/or technical assistance, without direct operational control over the mines.
This approach reveals distinct strategic horizons. Beijing has built, over two decades, an industrial and financial presence across various regions of the Global South. Washington, conversely, seeks to secure supplies through financial and diplomatic instruments, mitigating risks without necessarily assuming long-term industrial commitments.
The difference is far from trivial. Financial flows are important, but productive investments and industrial infrastructure tend to generate more lasting development benefits. For this reason, it is unlikely that African nations — such as Zambia, Guinea or the Democratic Republic of the Congo — will swiftly marginalise Chinese companies in favour of arrangements perceived as less stable.
The United States also faces a political challenge. The rhetoric associated with the ‘America First’ policy hampers the building of trust among partners in the Global South. Moreover, governments and investors need to believe that initiatives of this nature will survive political shifts in Washington.
In this geoeconomic chessboard, Brazil faces dilemmas similar to those of several African nations. The country possesses the second-largest global reserves of rare earths, around 21 million tonnes, alongside a prominent position in the production of niobium, iron, bauxite, manganese and nickel. In the case of graphite, it holds approximately 26% of global reserves. Lithium production is also growing in the Jequitinhonha Valley, in the state of Minas Gerais.
Despite this abundance, the Brazilian economy remains concentrated on mineral extraction. The country lacks the infrastructure and technological capacity for refining and processing, as well as the chemical industry required for magnet production — the stages where the highest value added is concentrated.
This context makes the country an attractive destination for foreign investment, especially from China. Chinese companies have expanded their presence in sectors linked to the energy transition in Brazil, such as solar energy, electric vehicles, mining and battery production. While these investments can accelerate industrialisation processes, they also raise the question of who will capture the long-term gains.
A possible alternative emerges in partnerships within the Global South. Brazil and India, for instance, recently signed a cooperation agreement focused on processing and technological exchange in critical minerals. The initiative seeks to reduce dependence on infrastructure and technology concentrated in developed nations.
Ultimately, the dispute over critical minerals is likely to favour those who offer more than just financing or access to extraction. Technology transfer, local industrialisation and productive partnerships will be the deciding factors in determining which countries will transform their natural resources into economic development — and which will remain mere suppliers of raw materials in the new economy of the energy transition.
