A RACE FUELLED BY TECHNOLOGY AND ENERGY TRANSITION DEMANDS
With digitalisation and the energy transition transforming industries at unprecedented speed, the demand for critical minerals has surged to new heights.
Essential resources vital for a swathe of industries - from electric vehicles to advanced computing and emerging technologies - have become the focal point of a high-stakes geopolitical contest as countries race to secure supplies and hedge against rising costs.
Examine the evolving landscape of critical minerals and how demand trends, key risks, and geopolitical dynamics will define this new trade era.
The Structural Risks Behind Mine Production
Mineral extraction occurs where natural deposits are concentrated, leading to a supply chain shaped by geology rather than economic efficiency. China, Australia, Russia, Latin America, and sub-Saharan Africa dominate production across a range of critical materials. However, this concentration exposes markets to geopolitical and economic risks as supply remains subject to export controls, policy shifts, and political instability.
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Australia
| Mining | Processing |
|
Lithium Manganese Aluminium |
Nickel |
Brazil
Eksom power shortages in South Africa affecting metals supply chain.
| Mining | Processing |
|
Aluminium* |
- |
*Note: Mining refers to bauxite, processing refers to alumina production.
Canada
| Mining | Processing |
|
- |
Nickel |
Chile
Lithium producer cartel considered by Chile, Argentina and Bolivia could restrict output.
| Mining | Processing |
|
Lithium Copper |
Lithium Copper |
China
Chinese supply chain dominance poses exposure risks for other economies, notably in processing of rare earth elements and inputs for batteries. Recent export restrictions of key materials for electronics highlight vulnerabilities.
| Mining | Processing |
|
Rare earths Lithium Aluminium |
Rare earths Nickel Lithium Copper Cobalt Manganese Aluminium |
DR Congo
Cobalt production in DR Congo faces multiple social, conflict and environmental risks.
| Mining | Processing |
|
Cobalt Copper |
- |
Gabon
| Mining | Processing |
|
Manganese |
- |
Guinea
| Mining | Processing |
|
Aluminium* |
Platinum |
*Note: Mining refers to bauxite, processing refers to alumina production.
Indonesia
Export ban on nickel ore from Indonesia in force since 2020, with other ores also set to be banned.
| Mining | Processing |
|
Nickel |
- |
Peru
| Mining | Processing |
|
Copper |
- |
Philippines
Export taxes on nickel ore considered by Philippines and others.
| Mining | Processing |
|
Nickel |
- |
Russia
Russia-Ukraine conflict could lead to sanctions impacting nickel and other metals, exchange stocks and future investment.
| Mining | Processing |
|
Nickel |
Nickel |
South Africa
Eksom power shortages in South Africa affecting metals supply chain.
| Mining | Processing |
|
Manganese Platinum |
Platinum |
U.S.
Environmental pressures and permitting rules threaten development of new minerals production and processing in the US and other Western countries
| Mining | Processing |
|
Rare earths |
|
A NEW GEOPOLITICAL CONTEST:
REGIONALISED RESOURCES, RISK-FRAUGHT SUPPLY CHAINS
A Demand Surge Reshaping Global Markets
Supply Chains Under Strain
Governments Redrawing the Minerals Map
The Middle East's Critical Minerals Play
01
Powering Demand: The Clean Energy Shift
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With the insatiable demand for critical minerals, supply constraints loom large. Clean energy technologies require large quantities of minerals upfront which could strain supply and expose trade vulnerabilities. Western countries, in particular, are increasingly seeking alternative processing capacities to reduce their dependence on markets like China and Russia which dominate certain mineral categories.
02
Supply Risks of Geographical Concentrated Mining
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The supply of critical minerals depends more on geology than economic efficiency. Extraction takes place where natural deposits are concentrated, limiting flexibility in sourcing.
Countries like China, Australia, and Russia dominate mineral extraction, exposing the geopolitical and inflationary pressures on mineral markets. While China has strengthened its grip on the refining sector through selective import policies, the Middle East is emerging as a potential refining hub, leveraging its access to low-cost energy to process alumina, aluminium, and steel more competitively.
03
Redefining Industrial Policy
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Success in a country’s position within the critical minerals market lies within the government’s proactiveness in securing alternative supply chains.
Resource-rich nations are opting to deploy supply-side measures, offering direct financial support and accelerating licensing reforms to facilitate private sector investment. Governments with limited domestic reserves emphasise demand-side policies like incentives for material recycling and funding for research into alternative technologies.
With critical materials playing a key role in semiconductor production, the intensifying chip war will further elevate their geopolitical significance. As governments seek control over these resources, they will gain greater influence over the AI industry and military technologies.
04
The Middle East: An Emerging Player in Critical Minerals
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The Middle East is becoming a vital hub for mineral processing and end-use manufacturing by leveraging a mix of legacy mining operations and substantial overseas investments.
While the Gulf states are investing to become major players in the mineral industry, the growth in regional demand for clean technologies will support the need for critical resources, primarily through renewable and EV ambitions. 20% of government vehicles in the UAE are now electric, and Saudi Arabia is committing to purchase up to 100,000 EVs from Lucid Motors.
CASE STUDY: THE MIDDLE EAST'S EMERGENCE AS A MINERALS HUB
THE UAE: FINANCIAL AND PROCESSING PROWESS
The UAE is rapidly carving out a central role in the global critical minerals trade by leveraging its strengths in finance, logistics, and energy. It is investing heavily in overseas resources, processing capabilities, and end-use manufacturing.
The $1.1 billion acquisition of Zambia’s Mopani copper mines and Titan Lithium’s $1.4 billion lithium processing plant are signs of the country’s ambitions. Meanwhile, Dubai’s world-class infrastructure and investor-friendly business districts like DMCC are positioning it as a neutral, efficient base for global mining giants.
SAUDI ARABIA: MINING MEETS MANUFACTURING
Saudi Arabia is taking a bold, multi-pronged approach to critical minerals, blending domestic resource extraction with strategic global investments that could make the kingdom a leading hub for key minerals. Manara Minerals, backed by Ma’aden and PIF, has invested $2.5 billion in Vale Base Metals.
Meanwhile, Aramco is pioneering direct lithium extraction (DLE) from oilfield brine. The kingdom is also integrating mining into its Vision 2030 industrial strategy, with Ceer set to produce 500,000 EVs annually.
PROJECTED OUTCOMES
- Growth on the horizon: The UAE, Saudi Arabia, and Oman are driving critical minerals expansion through government-led policies and investment vehicles.
- Deepened trade networks: The UAE’s African port network and Saudi Arabia’s exploration push are cementing the region’s role as a key link between resource-rich Africa and industrial hubs in Asia.
- Energy transition catalyst: As global demand for critical minerals surges, the Middle East is strategically positioning itself as a production and processing powerhouse in the supply chain, driving key competitive advantages for major sectors like clean energy and AI.
The Future of Critical Minerals
Government Recommendations
- Leverage public-private partnerships (PPP)
States should explore PPP models to enhance technological capabilities and attract private investment. This can ease fiscal pressures while enabling state-owned enterprises to access expertise and financing that might otherwise be out of reach. - Expand exploration efforts
PPPs can unlock new mineral reserves by facilitating exploration activities. Governments sharing financial and operational responsibilities with private sector partners can accelerate the discovery of critical resources while mitigating risks to state budgets. - Invest in demand-side innovation
Governments should prioritise research and development initiatives to reduce reliance on scarce minerals. Governments can focus on alternative technologies - such as sodium-ion batteries - to help stabilise supply chains. - Diversify trade relationships and strategic partnerships
The volatility of global supply means that nations must seek beyond their current trade relationships. Both resource-rich and resource-dependent economies must diversify strategic partnerships to avoid over-reliance on a select number of producers and customers. In today’s trade environment, mitigating geopolitical and trade-related risks is key. - Scaling up processing capabilities for supply chain resilience
The concentration of mineral refining capacity in a few key markets poses a significant risk to global supply chains. Nations must move beyond extraction and invest in midstream processing infrastructure to secure a self-sufficient and resilient supply of critical minerals. Regions like the Middle East are positioned to transform the minerals landscape, with access to cost-effective energy and strategic trade routes.
Industry Recommendations
- Supply risks hedging
Supply risks will only become more volatile in the future. Companies should actively manage exposure to critical mineral price volatility through futures markets, long-term contracts, and strategic stockpiles. Firms can further protect themselves by engaging with upstream operators through direct partnerships. - Diversify investment portfolios
Investors should spread risk by funding domestic and international critical mineral projects. There should also be a strong focus on emerging regional hubs for clean technology and industrial decarbonisation. - Developing downstream industries
Companies can consider expanding investments into battery manufacturing, solar cells, and other renewable energy technologies. These industries will strengthen the demand for critical minerals and create a broader economic and industrial impact within a region. - Strengthen government and public sector engagement
Competition for resources will intensify, so corporate strategies should prioritise relationships with governments to navigate risks. These risks include resource nationalism, trade shifts, and policy changes in key producing and processing markets. - Help shape a supportive regulatory environment
Industry and investors should collaborate with governments to create clear, competitive regulations encouraging critical mineral investments. Mining policies should also align with broader industrial and sustainability goals. - Invest in new extraction technologies State-backed firms and national oil companies (NOCs) should support emerging extraction methods, such as direct lithium extraction (DLE), to expand supply while diversifying their portfolios beyond oil and gas.