Mineral Competition in Great Power Conflict: A Security-Focused Approach to Critical Mineral Policy (Marcellus Policy Analysis)

By Liam Martin, Fall 2023 Marcellus Policy Fellow

As America and China move towards “great power conflict,” American policymakers must prioritize reliable access to critical minerals. These minerals, including cobalt, lithium, nickel, and rare earth elements (REEs), fill essential roles in technology, energy, and defense sectors as raw materials for microprocessors, magnets, batteries, superalloys, and superconductors. As a result of the push for lower energy emissions and the rise in concerns about security manufacturing in the aftermath of the Russo-Ukrainian War, demand for these minerals is expected to rise by between 100% and 350% by 2030. Yet America plays a negligible role in the critical mineral market. China is the largest refiner of critical minerals in the world, refining nearly two-thirds of the world’s cobalt, copper, and lithium, and nearly 90 percent of the world’s REEs. China, therefore, holds a massive advantage over the United States in a sector likely to define much of the global economy and one which is essential for America’s national security. To overcome this disadvantage, America must implement policies to build up the domestic critical mineral industry, build up its critical mineral stockpiles, and support “friendshoring” of mineral production to allied countries.

Among policy thinkers in the critical minerals sphere, two main schools of thought exist: those who argue for reliance on market mechanisms or international cooperation to ensure America will continue to have access to these minerals, and those who believe that mineral access will become a tool of great power competition. The former school tends to emphasize the role of those minerals in a clean energy transition to combat the global threat of climate change, while the latter emphasizes the defense applications of the minerals. Although scholars debate the usefulness of the “great power competition” framework, two facts are certain: foreign policy voices of both parties are committed to the framework, and critical minerals will remain a vital U.S. interest either way. Therefore, this paper will examine America’s strategic dilemma in the mineral sector through the lens of competition with China.

Within the framework of U.S.-China security competition, security concerns will take precedence over normal economic incentives and international cooperation cannot be expected with any certainty. Therefore, America should prepare for interruptions in the global critical mineral supply from China, potentially threatening defense manufacturing. Market forces alone cannot provide for America’s security needs because of the infrastructure costs and development time which critical mineral refining requires. In the event of a conflict with China, defense mineral needs will far outpace current capacities as they did in previous American wars. Therefore, American security requires a stronger mineral policy.