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Supply Chains & Geopolitics

Supply Chains & Geopolitics — The New Resource Rivalry Critical minerals have become a central issue in international relations. The geographic concentration of mining and processing, combined with surging demand from the clean energy transition, has created a new era of resource competition among major powers. The Concentration Problem The defining challenge of critical mineral supply chains is extreme geographic concentration at every stage: | Mineral | Top Producer | Share of Global Output | |---------|-------------|----------------------| | Cobalt mining | DRC | 73% | | Rare earths processing | China | 90% | | Natural graphite | China | 65% | | Palladium | Russia | 40% | | Lithium refining | China | 65% | | Platinum | South Africa | 70% | Sources: USGS, IEA, BGS 2023–2024 data This concentration means that trade restrictions, political instability, or natural disasters in a single country can disrupt global supply chains for entire industries. National Strategies Governments are responding with dedicated critical mineral strategies: - Canada — The Canadian Critical Minerals Strategy 2022 commits $3.8 billion to support exploration, mining, processing, and recycling. Canada aims to become a full-cycle supplier, from mine to battery to EV. - United States — The Inflation Reduction Act 2022 provides tax credits for EVs using minerals sourced from the US or free-trade agreement partners, incentivizing North American supply chains. - European Union — The Critical Raw Materials Act 2023 sets targets: 10% of EU consumption from domestic mining, 40% from domestic processing, and 25% from recycling by 2030. - Australia — The Critical Minerals Strategy 2023 positions Australia as a reliable supplier to allied nations, leveraging its lithium, rare earth, and cobalt reserves. Friend-Shoring and Supply Chain Diversification "Friend-shoring" refers to the strategy of building supply chains among allied, like-minded nations rather than depending on geopolitical rivals. Canada, Australia, the US, the EU, Japan, and South Korea have formed partnerships to develop alternative supply chains, particularly for lithium, rare earths, and processed battery materials. Recycling and the Circular Economy As the first generation of EV batteries reaches end of life typically 8–15 years , urban mining — recovering critical minerals from spent batteries and electronic waste — is becom