The Global Institute for Strategic Studies (GISS)
Executive Summary
The international system is entering a new era of geopolitical competition in which access to critical minerals has become as strategically significant as access to oil was during the twentieth century. Rare earth elements, lithium, cobalt, graphite, gallium, germanium and other strategic materials now underpin virtually every sector of modern power, from artificial intelligence and semiconductors to missile systems, satellites, renewable energy technologies and electric vehicles.
Throughout 2026, critical minerals have moved from being an industrial concern to becoming one of the defining geopolitical issues shaping relations between major powers. China’s tightening of export controls on several rare earth elements, combined with coordinated efforts by the G7 and the European Union to diversify supply chains, demonstrates that control over strategic resources has become a central instrument of economic statecraft.
This paper argues that the emerging competition over critical minerals represents the beginning of a long-term strategic contest that will influence global security, industrial competitiveness, technological innovation and military power throughout the coming decades.
Introduction
Modern geopolitical competition is no longer driven solely by territory, energy resources or military alliances.
Increasingly, strategic influence is determined by control over the raw materials that enable advanced technologies.
Every fighter aircraft, missile guidance system, military radar, quantum computer, electric vehicle, satellite constellation and artificial intelligence data centre depends on a complex network of minerals that are extracted, refined and processed through highly concentrated global supply chains.
For decades these supply chains were viewed primarily as commercial matters.
Today they are increasingly regarded as matters of national security.
Governments no longer ask only who manufactures advanced technologies.
They ask who controls the materials required to build them.
China’s Strategic Advantage
China occupies a uniquely powerful position within the global critical minerals market.
Although many countries possess significant geological reserves, China dominates the refining and processing stages that transform raw minerals into materials suitable for industrial production.
This control provides Beijing with leverage extending far beyond mining itself.
Recent export restrictions imposed by China on selected rare earth elements and related technologies have demonstrated how rapidly global supply chains can be disrupted. European manufacturers, American defence companies, Japanese electronics firms and automotive industries all experienced growing uncertainty regarding future access to essential materials.
Rather than relying exclusively on tariffs or traditional trade measures, China has increasingly incorporated critical minerals into its broader geopolitical strategy.
This represents a structural shift in international competition.
The West Responds
The response from Western governments has been equally significant.
During the 2026 G7 Summit, member states agreed to establish a coordinated Critical Minerals Alliance aimed at reducing dependence on any single supplier.
The initiative seeks to diversify mining projects, expand refining capacity, strengthen recycling industries and establish coordinated strategic reserves.
The European Union has simultaneously accelerated partnerships with countries possessing substantial mineral reserves, including Brazil, Australia and several African states.
Rather than competing solely through trade agreements, Europe is increasingly pursuing long-term industrial partnerships involving technology transfer, local processing and sustainable mining practices.
These developments illustrate a broader transformation.
Resource diplomacy is becoming an essential component of foreign policy.
Critical Minerals and Defence
Few sectors illustrate the strategic importance of critical minerals more clearly than defence.
Modern precision-guided weapons require rare earth magnets.
Fifth-generation fighter aircraft depend upon advanced alloys incorporating strategic metals.
Naval propulsion systems, radar arrays, missile defence technologies and secure communications all require materials that currently remain concentrated within a limited number of global suppliers.
Military planners increasingly recognize that industrial resilience depends not only upon manufacturing capacity but also upon uninterrupted access to strategic resources.
Supply disruption during a major conflict could significantly reduce production of critical military equipment.
As a result, defence planning increasingly incorporates mineral security alongside ammunition stockpiles, fuel reserves and industrial mobilisation.
Artificial Intelligence and the Mineral Economy
Artificial intelligence is often discussed in terms of algorithms, software and computing power.
Less attention is given to its physical foundations.
Every advanced AI system depends upon semiconductor manufacturing.
Semiconductors require gallium, germanium, high-purity silicon and numerous other specialized materials.
Data centres require enormous quantities of copper, aluminium and rare earth components.
The transition toward AI-powered economies therefore increases rather than decreases dependence upon strategic minerals.
The AI revolution is simultaneously becoming a resource revolution.
Countries capable of securing resilient supply chains will likely enjoy substantial technological advantages over competitors.
Europe’s Strategic Vulnerability
Europe faces particular challenges.
Despite ambitious industrial policies, much of the continent remains heavily dependent upon imported strategic minerals.
Domestic mining projects often encounter lengthy regulatory procedures, environmental concerns and local political opposition.
At the same time, European industries—including automotive manufacturing, renewable energy, aerospace and defence—are among the world’s largest consumers of these materials.
This combination creates a structural vulnerability.
The European Commission has responded by proposing diversification measures, encouraging strategic partnerships and considering mandatory supply diversification requirements for key industries.
However, developing alternative supply chains will require years rather than months.
Beyond Economics
The competition over critical minerals should not be viewed solely through an economic lens.
It increasingly influences diplomatic relations, security partnerships and geopolitical alignments.
Countries possessing large mineral reserves are gaining new strategic significance.
Resource-rich states across Africa, Latin America and Central Asia now occupy increasingly important positions within global diplomacy.
Major powers compete not only for access to minerals but also for influence over infrastructure, transport corridors, investment frameworks and processing facilities.
Critical minerals have therefore become instruments of geopolitical influence comparable to energy pipelines during previous decades.
Future Outlook
The global contest over strategic resources is unlikely to diminish.
Instead, demand is expected to increase dramatically as governments accelerate investments in renewable energy, advanced defence systems, artificial intelligence, quantum computing and digital infrastructure.
Competition will increasingly focus not simply upon mining but upon refining capacity, recycling technologies, substitution research and supply-chain resilience.
Countries capable of integrating industrial policy, technological innovation and resource diplomacy will enjoy significant strategic advantages.
Those that remain dependent upon concentrated external suppliers may face growing economic and security vulnerabilities.
Policy Recommendations
For advanced industrial economies, securing reliable access to critical minerals should become an essential component of national security strategy rather than simply industrial policy.
Governments should diversify supply chains through long-term partnerships with trusted producers while investing in domestic refining capabilities and strategic stockpiles.
Greater investment is also needed in mineral recycling, materials science and technological innovation capable of reducing dependence on scarce resources.
International cooperation among democratic partners should focus on coordinated procurement, transparent markets and shared resilience mechanisms capable of reducing strategic vulnerabilities.
Conclusion
The geopolitical competition of the twenty-first century will not be determined solely by military power or economic size.
It will increasingly be shaped by control over the materials that make advanced technologies possible.
Critical minerals have become the foundation upon which artificial intelligence, defence industries, clean energy systems and digital economies are built.
The emerging struggle over these resources represents more than a trade dispute.
It marks the beginning of a new era in international relations, where resource security, technological leadership and geopolitical influence have become inseparable.
For governments, industries and security planners alike, the question is no longer whether critical minerals matter.
The question is whether they can secure them before strategic competition becomes even more intense.