The global race to secure critical minerals—such as lithium, cobalt, and rare earth elements, essential for technologies like electric vehicles and renewable energy systems—has intensified protectionist policies worldwide. According to Verisk Maplecroft’s Resource Nationalism Index, 72 out of 198 assessed countries have significantly increased state interventions in the past five years, marking a level of resource nationalism not seen since the early 20th century.
Key Developments:
- Europe’s Strategic Shift: Major European economies, including Germany, Spain, the UK, and Poland, have implemented measures to reduce dependence on external energy and mineral sources. Germany, for instance, has seized foreign energy assets and subsidized domestic manufacturing to secure critical mineral supplies. The European Union has introduced initiatives like the European Raw Materials Alliance and the Critical Raw Materials Act to promote sustainable mining and recycling within the bloc.
- North American Policies: The United States has enacted the CHIPS and Science Act and the Inflation Reduction Act to boost domestic production of critical minerals while restricting foreign, particularly Chinese, involvement in key sectors. Canada has implemented its Critical Minerals Strategy and amended the Investment Canada Act to limit foreign investments and encourage sustainable resource development. In 2022, Canada ordered Chinese investors to divest from Canadian lithium firms to protect its critical minerals sector.
- China’s Dominance and Global Response: China’s control over critical mineral supply chains has prompted countries like Australia to take protective measures. The Australian government, for example, increased funding for Iluka Resources to establish a rare earths refinery, including a “no-China” clause to prevent sales to China. This move aims to ensure that rare earth oxides are supplied to Western allies, reducing dependency on Chinese-controlled supply chains.
These protectionist trends reflect a global effort to secure critical mineral supplies amid geopolitical tensions and the accelerating transition to green technologies. Countries are increasingly prioritizing national security and economic stability by implementing policies that favor domestic industries and allied nations over global free trade.
