ISPI
Alberto Prina Cerai
ISPI Junior research Fellow
26 Jun 2025
Mineral (In)Security: Why the Global North Wants Deals on Critical Mineral
Western countries are racing to secure CRM supplies through strategic partnerships. However, fragmented policies and the Trump shock risk undermining long-term coordination and sustainability goals.
Commentary Geoeconomics · Transatlantic Relations
International cooperation is one of the key pillars for a more secure and sustainable supply of critical minerals. As recalled by the International Energy Agency (IEA), to ensure a steady transition with the roll-out of competitive renewable energy solutions, a more diversified supply base for minerals – such as lithium, cobalt, graphite, nickel and rare earth elements (REE) – is needed to hedge against potential disruptions or geopolitical tensions, which could affect the affordability of downstream technologies. As more sectors and countries invest in solar, wind and electric vehicles (EVs), along with artificial intelligence and data centers, the global appetite for these minerals and materials will skyrocket, with global demand expected to double by 2030 and triple by 2050.
For many Western governments, in order to be resilient and competitive in strategic technologies, access to minerals and metals is essential also for economic security, given that the risks of supply disruptions are geopolitical in nature. Thus, many G7 countries have started to map out their vulnerabilities while taking concrete steps to lessen dependence, especially vis-a-vis China. However, in the last four years the average market share of the three largest producing countries increased to 86% in 2024 compared to 82% in 2020. Though promising on paper, trade agreements or strategic partnerships must deliver concrete results in terms of investments, while being pragmatic and industry oriented.
Decoding the Minerals Security Partnership under the Trump Administration
Critical minerals are one of the issues that enjoy strong bipartisan support in the United States, especially for their relevance for economic and national security. This strong focus is testified by the Minerals Security Partnership (MSP), one of the key initiatives launched by the US Department of State under Joe Biden’s Presidency. Despite the election of Donald Trump and his political commitment to dismantling the legacy of the former Administration, this partnership announced at the Prospectors and Developers Association of Canada (PDAC) convention in Toronto in June 2022 – one of the key events of the global mining industry – is still intact and now counts 14 member countries and the European Union (EU). Moreover, the MSP has successfully elevated, as its multilateral scope embraced, the importance of mineral security across US allies, highlighting the role of resource diplomacy and the need to mobilise market democracies to challenge the dominance of China and de-risk minerals supply chains.
The partnership aims to address four areas of major challenges in the industry: 1) diversifying supply chains; 2) investing in new sources at multiple stages; 3) promoting high ESG standards; 4) increasing the recycling of minerals within the partners. With the emphasis on the role of private investments for all these objectives, the MSP has also secured the joint commitment of its partners to support projects of mutual interest within their respective countries but also in third countries. While there are no available official records, the MSP has begun supporting about 30 projects (16 on upstream mining and extraction, 7 at the refining stage and 7 on recycling and recovery) which focus on cobalt, copper, gallium, germanium, graphite, lithium, manganese, nickel and REEs across four continents. To advance those public-private partnerships, the role of the US International Development Finance Corporation (DFC) and other MSP’s partners financial institutions (such as the Japan Organization for Metals and Energy Security – JOGMEC or the German KfW IPEX-Bank) has been decisive and might become even more important in the future for de-risking other mining or exploration projects through loans, loan guarantees and equity investments.
Since the election of Donald Trump, while critical minerals and rare earths have become a public and much hyped issue (with Greenland and Ukraine as minerals hot spots), a series of contradictory measures and initiatives have challenged the effectiveness and credibility of the US strategy. The US President has issued executive orders supporting critical minerals supply chains outside of China including ”Declaring a National Energy Emergency” on January 20 and ”Immediate Measures to Increase American Mineral Production” on March 20 – the latter ordering the Department of Defense and the US International Development Finance Corporation (DFC) to establish a fund for investment in domestic critical mineral production. While these measures seem led by concern on excessive concentration of supply for geopolitical issues (the trade war with China and the export control of Beijing on rare earths and magnets are a powerful reminder), it is less evident what end-user and downstream industries the US Administration is most concerned for. For instance, the potential repeal or partial modification of the Inflation Reduction Act (IRA) through the “One Big Beautiful Bill” – especially sections related to the 45X and 30D Tax Credit for battery manufacturing and EVs – could seriously cut high-growth scenarios of US market demand for battery minerals but also affecting existing commercial and trade relationships. In addition, domestic mining could become more important, especially for defence-related (titanium, rare earths, gallium) or nuclear (uranium) technologies that the US government wants to prioritise over clean tech.
Beside domestic politics, it is not a coincidence that critical minerals have been exempted from tariffs imposed on April 2, since the US is more import dependent. However, with Executive Order the Trump Administration is investigating through the Section 232 of the Trade Expansion Act potential and harmful effects of processed imports on national security. On the international front, Washington is in advanced bilateral talks with Democratic Republic of the Congo and Rwanda about developing partnerships in the cobalt, tungsten and lithium sectors to secure long-term offtakes for the US, following bilateral arrangements signed with Ukraine, Argentina, India, Japan, Mongolia, Norway and Uzbekistan. Moreover, the anti-climate change rhetoric of the US Presidency is evidently at odds with the ESG advocacy on which the MSP was built – with the idea of creating a Western competitiveness based on more transparent and sustainable supply chains compared to Chinese, state-led model. These developments suggest that whether the MSP succeeds, it could depend also on the alignment of interests of its partners and their relative position in the supply chain.
Reliability and readiness: Australia and Canada as critical mineral suppliers
Australia and Canada are two countries that are intrinsically positioned to benefit from the Western push toward diversification, with Australia emerging as a potential de facto member of the G7 considering its increasing role in terms of minerals security. Both countries have significant reserves of critical minerals (lithium, nickel, copper) with a mature mining industry supported by national policies aimed at further integrating the supply chain toward processing capabilities (the West Achilles’ heel). They also enjoy with the US existing free trade agreements (FTAs), which make them already eligible countries for the IRA’s materials requirements, while also having existing bilateral collaborations with almost all G7 members.
Considering the North American potential – and the fact that the country is part of the US defence industrial base since 1993 – Canada has in force with the US a Joint Action Plan on Critical Minerals signed in January 2020, with concrete actions later announced, i.e. a joint investment in two Canadian critical mineral deposits in May 2024 and a provided financial support for a cobalt refinery project in Ontario. On the trade front, after the imposition of US import tariffs on several Chinese made-products by the Biden Administration, Canada followed suit with a 100% import surtax on electric vehicles. These developments suggest that the North American market, especially for critical minerals, will be increasingly shielded from cheaper products coming from Chinese companies, thus giving more economic opportunity for localised sourcing. For instance, in October 2024, the North American Graphite Alliance (NAGA) lobbied the Canada government for aligning to the US import tariffs on products from China, responsible for 67% of natural graphite and 75% of artificial graphite. In May 2025, the US Department of Commerce announced the preliminary decision to impose countervailing duties up to 721% on active anode materials from China, essential for battery manufacturing.
Australia is another major player in the critical mineral industry, holding valuable reserves (23%) and being the first producer (35%) of lithium from hard-rock deposits. However, almost all the lithium ore mined in Western Australia is currently shipped to China for further processing: this is where recent legislative developments (such as Future Made in Australia Act 2025) are aimed, reducing export dependence while offering de-risked refined products also for capturing more added value. The country is also hosting one of the only two ex-China commercial active deposits of rare earths in the West, owned and operated by Lynas Corporation. With a clear view of the potential of its geological endowment – reflected in the Critical Minerals Strategy 2023-2030 – the Australian government has already been active in bilateral engagements with Japan (Critical Minerals Partnership and Working Group), France (Critical Minerals Dialogue), Germany (Working Group on Raw Materials), Korea (MoU on Cooperation with Critical Mineral Supply Chains) and India (Critical Minerals Investment Partnership).
Derisking the Asian network? Korean and Japan as compliant partners
Asian players are increasingly embedded in critical minerals supply chains, especially for the emergence of the EV battery value chain from mining to downstream manufacturing. As this technology takes hold in the US and the EU, the role of Japan and Korea – two incumbents in terms of FDIs and production (about 25% of global cell gigafactory capacity) – is thus evolving in terms of addressing upstream and midstream stages. They both have developed refining industries but are increasingly reliant on imports: according to the Export-Import Bank of Korea, the country depends on China for 60-80% of its imports of minerals, including rare earths, cobalt and lithium, while Japan has successfully reduced its dependence on China only for rare earths from more than 90% to 58% in 2020 (with the early investment, through JOGMEC, in the Australian Lynas operations). Tokyo has been a long-standing member of the US-EU-Japan Trilateral Conference on Critical Materials, an intergovernmental initiative held every year since the Rare-Earth Crisis occurred in late 2010 with Beijing. Bilateral agreements have also been signed with the US and Australia specifically on critical minerals cooperation.
One of the key drivers of de-risking policies and arrangements has been the need to be compliant with the US Inflation Reduction Act, considering stringent requirements on battery-contained materials and the exclusion of Foreign Entity of Concern (FEOC) in their supply base from availing the IRA tax credits. With broadened definition and scope expanded, i.e. the new idea of “prohibited foreign entities”, proposed by One Big Beautiful Bill, these restrictions would apply to some IRA sections, e.g. the Advanced Manufacturing Production Credit, and the Clean Electricity Investment Tax Credit and Production Tax Credit, with the impact on the eligibility of sourcing companies (mainly Korean) to be seen. Before these new updates, the Memorandum of Understanding signed by Seoul and Ottawa had been instrumental to address the provision in the US IRA, allowing Korean companies to leverage electric vehicle tax credits through sourcing from Canadian critical minerals companies. To prevent potential side-effects from the US Department of Commerce investigation on processed critical mineral imports (announced in April, under Section 232 of the Trade Expansion Act), the Korea International Trade Association (KITA) has reached the US Department with a letter, emphasising the crucial role Korean processed critical minerals and their derivative products play for US national security, especially in the context of Chinese export controls. Korea is also concluding its one-year of chairmanship of the Mineral Security Partnership by the end of June.
Concluding thoughts
Critical minerals are increasingly at the centre stage of geopolitical and geoeconomic confrontation. As the securitisation of minerals and metals becomes the dominant feature, it is possible that growing tensions could have side-effects on the clean energy transition. Moreover, the promise that Western-led policies for diversification, built around the Mineral Security Partnership, would have been pursued with a strong focus on environmental sustainability seems to be temporarily less relevant compared to economic security. This is also reinforced by persistent tensions, with critical minerals being entrenched in trade and technology disputes (US-China).
While geopolitical risks represent a clear incentive for diversification of supplies and thus collective mineral security, within the Global North a fragmentation of initiatives stems also from different industrial priorities. This is the reason why a comprehensive and coordinated strategy should emerge, leveraging every member’s strength in the supply chain, but also considering demand side policies.
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