The Rise of Critical Minerals: Energy Security Beyond Oil and Gas

For over a century, oil and gas have shaped the contours of global energy security and geopolitical power. But in today’s energy transition era—driven by climate targets, electrification, and clean technologies—another set of resources is taking center stage: critical minerals.

Lithium, cobalt, nickel, graphite, and rare earth elements are essential to the batteries, solar panels, wind turbines, and electric vehicles that will define the energy economy of the 21st century. And as demand for these minerals surges, governments and industries are waking up to a hard truth: the next energy security race won’t be won in oil fields or gas pipelines—it will be fought in mines, refineries, and supply chains for critical minerals.

Why Critical Minerals Matter

Clean energy technologies are mineral-intensive. According to the International Energy Agency (IEA), an electric vehicle requires six times more mineral inputs than a conventional car, and an onshore wind plant needs nine times more mineral resources than a gas-fired power plant.

Here are just a few examples of their roles:

• Lithium: Essential for lithium-ion batteries powering EVs and grid storage.

• Cobalt: Used to improve battery life and thermal stability.

• Nickel: Increases energy density in batteries, especially for long-range EVs.

• Rare Earths: Crucial for permanent magnets used in wind turbines and electric motors.

As the world transitions to cleaner energy systems, global demand for these minerals is expected to increase by as much as 400–600% by 2040. And that demand brings with it not only opportunity, but profound geopolitical tension.

China’s Dominance: A Strategic Vulnerability

One of the most pressing concerns in Western capitals is China’s overwhelming control of the critical minerals supply chain.

• China processes roughly 60% of the world’s lithium, 65% of cobalt, and 90% of rare earth elements.

• It dominates the refining and processing stage, even when the raw materials are mined elsewhere.

• Chinese firms have invested heavily in mining operations across Africa and Latin America—particularly in countries like the Democratic Republic of Congo (which holds over 70% of the world’s cobalt reserves), Argentina, and Bolivia.

This concentration of control has prompted national security concerns in Washington, Brussels, Tokyo, and Canberra. Many fear a future where dependence on Chinese-processed minerals mirrors, or even exceeds, past dependence on OPEC for oil.

The U.S. and EU: Scrambling for Security

In response, the U.S. and European Union have launched aggressive strategies to reduce reliance on Chinese supply chains and secure alternative sources.

United States:

• The Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law include major incentives for domestic mining, processing, and battery manufacturing.

• The Defense Production Act has been invoked to boost domestic production of lithium, nickel, graphite, and other minerals.

• The U.S. has signed bilateral agreements with countries like Canada, Australia, and Chile to promote joint ventures and secure supply.

European Union:

• The EU launched its Critical Raw Materials Act in 2023, setting targets to source at least 10% of its strategic raw materials domestically and diversify imports to avoid single-country dependence.

• Investment is flowing into refining and recycling capacity in Germany, France, and Finland.

• The EU is also fostering partnerships through the Global Gateway initiative, a counterweight to China’s Belt and Road.

Despite these efforts, building a competitive and secure Western critical minerals ecosystem will take years—if not decades—and will require both political will and substantial capital.

Africa and Latin America: The New Resource Battleground

As demand for minerals soars, Africa and Latin America are emerging as key battlegrounds in the global energy transition.

Africa:

• The Democratic Republic of Congo (DRC) remains the world’s largest source of cobalt, though plagued by governance and ethical mining concerns.

• South Africa holds significant reserves of manganese and platinum group metals.

• Countries like Namibia and Zambia are attracting foreign capital for copper and lithium projects.

Western nations are increasingly engaging with African governments to secure mineral deals—offering financing, infrastructure, and ESG oversight as alternatives to China’s dominance.

Latin America:

• The so-called "Lithium Triangle"—spanning Argentina, Bolivia, and Chile—contains over half of the world’s known lithium reserves.

• Chile and Argentina have seen a surge in joint ventures with Western companies aiming to lock in long-term supply.

• Mexico, Brazil, and Peru are also gaining attention for their copper, nickel, and graphite potential.

Yet rising nationalism, environmental concerns, and Indigenous land rights are reshaping mining policy across the region. Governments are demanding more local value creation, environmental safeguards, and revenue sharing—trends that will complicate, but not deter, global investment.

Supply Chain Challenges: Refining, ESG, and Permitting

Even if Western countries succeed in securing access to raw minerals, major bottlenecks remain in processing and refining capacity, much of which still resides in China. Building new refining infrastructure is capital-intensive, environmentally sensitive, and subject to local resistance.

On top of that, the industry faces growing pressure to improve Environmental, Social, and Governance (ESG) standards. Reports of child labor in Congolese cobalt mines, water usage in South American lithium brines, and deforestation in nickel-rich areas have sparked international concern.

Permitting new mines in Western democracies remains a slow and contentious process, often taking 10–15 years from discovery to production. This timeline clashes with the urgency of net-zero goals.

A Strategic Reset

The rise of critical minerals is reshaping the very definition of energy security. In this new era:

• Securing oil fields is no longer enough.

• Control over lithium and cobalt supply chains may prove as decisive as pipeline routes once were.

• Countries that adapt their policies to embrace mineral diplomacy, environmental responsibility, and technological innovation will lead the next phase of the energy transition.

The world is shifting from barrels to batteries. And those who control the minerals will shape the energy systems—and geopolitical alliances—of the future.