22 June 2026, NIICE Commentary 12576
Prapti Das
For more than two decades, oil and natural gas have been at the centre of international politics. However, due to the global shift towards digitalisation and green technologies, there has been a structural change in geopolitical priorities. Historically, control over energy resources determined a nation’s economic growth, military capability, and geopolitical influence. However, the global transition towards clean energy, advanced technologies, and digital economies has introduced a new category of strategic resources, i.e., critical minerals.
Critical minerals, including lithium, cobalt, nickel, rare earth elements, graphite, and copper, have become essential for the production of electric vehicles (EVs), semiconductors, renewable energy technologies, batteries, telecommunications, and defence systems. As countries improve the pace of technological transformation and energy transition policies, control over these minerals is increasingly becoming a source of economic and strategic power. Asia has emerged as one of the central arenas in this competition. The region combines manufacturing dominance, large consumer markets, technological innovation, and growing geopolitical rivalry. As a result, competition over critical mineral supply chains is becoming an important dimension of contemporary geoeconomics.
Critical Minerals and Geoeconomic Competition
Critical minerals are not just scarce but are essential to key industries and quite difficult to replace if the supply chain gets disrupted. Unlike conventional commodities, these resources are the backbone of emerging high-value sectors and future-oriented technologies. The growing importance of critical minerals reflects a broader transformation in international politics where economic tools increasingly influence strategic outcomes. It is not just about importing enough oil or gas anymore. Now, governments are seeking to control the process from the start to the finish line, i.e., extraction, processing, transportation, and technological ecosystems connected to these minerals.
This shift in the mindset has led to what experts describe as geoeconomic competition (the use of economic capabilities to achieve geopolitical objectives) as nations are pulling every economic lever to gain a strategic advantage over opponents, which includes securing supply chains, reducing risky dependencies, and establishing technological supremacy. The battle for these minerals is not just business; it is shaping a broader context of politics and balance of power.
China’s Dominance and Strategic Leverage
China occupies a leading position in global critical mineral supply chains. Although the United States and Australia produce significant amounts of rare earth elements, China holds a near-monopoly on the global processing and refining of critical minerals. It controls nearly 70% of mining capacity and 90% of processing capacity worldwide. A prime illustration of this is lithium, which is used in production of battery and electric vehicles. China is recognised as the global leader in lithium processing and constitutes approximately 65%-75% of the globe’s battery-grade lithium refining capacity.
Lithium is required for batteries and EVs, whereas gallium is used in semiconductors. Nearly two decades back, demand for these materials was limited, but due to the technological shift, which fuelled the increase in demand, has outpaced the production ability, which, in turn, has intensified the competition for these minerals. Today, the global markets of semiconductors and electric vehicles are worth more than tens of billions of dollars. Through long-term investment, industrial policy, overseas mining partnerships, and state-supported supply chain initiatives, China has created substantial influence across these strategic sectors.
China’s position extends beyond domestic production. Chinese firms have expanded mining investments across Asia, Africa and Latin America while strengthening manufacturing ecosystems linked to renewable energy and electric mobility. This concentration of processing capacity has generated concerns among many countries regarding supply dependence and strategic vulnerability. As geopolitical tensions increase, critical minerals are increasingly viewed through the lens of national resilience and economic security.
India’s Emerging Critical Mineral Strategy
In recent years, India has been increasingly recognising critical minerals as a strategic priority, as it is heavily dependent on imports from numerous countries for many crucial rare earth elements. The rapid pace of industrialisation, energy transition goals, increasing digital infrastructure, and ambitions to strengthen domestic manufacturing have increased India’s demand to secure mineral access. India’s strategy for critical minerals is defined by a multi-pronged strategy.
Recent policy discussions highlight the need for diversification of supply chains, expanding international partnerships, and continuing domestic exploration. India has noted to strengthen cooperation with mineral-producing countries through alliances like the U.S.-led Minerals Security Partnership (MSP) & the Indo-Pacific Economic Framework (IPEF) and improve investment in processing capabilities. In addition to counter China’s monopolistic control, India has initiated the National Critical Minerals Mission (NCMM), which is the government’s roadmap for secure access to critical minerals. Khanij Bidesh India Limited (KABIL), the primary public sector vehicle tasked with identifying, exploring, and acquiring overseas mineral assets such as lithium and cobalt projects in resource-rich nations like Australia and Argentina.
For India, critical minerals, in addition to being a matter of economic issue, are strategic to its future industrial competitiveness, energy independence, and technological development. This changing approach reflects an understanding that future geopolitical influence will be defined in terms of how countries secure critical minerals.
Competition Beyond China and India: The Role of Emerging Asian Actors
The emerging geoeconomic landscape is not limited to the major powers. Countries such as Indonesia, Vietnam, Japan, and South Korea are emerging players in regional mineral supply chains. The ASEAN member states are attempting to balance their heavy reliance on Chinese investment against the need to create regional industrial upgrades.
Indonesia is responsible for more than 60% of the worldwide supply of nickel. By implementing strict export bans on raw nickel, the country has positioned itself as one of the key players in nickel production and downstream industrial development. Meanwhile, Japan and South Korea are enhancing their technological capabilities and diversifying supply partnerships. Vietnam has attracted attention due to its growing manufacturing sector and its strategic location in regional supply networks.
These developments indicate that Asia’s future economic influence will not depend solely on competition between large powers but also on the strategic choices of mid-level economies. The rise of diversified supply chains may gradually reshape regional production networks and economic interdependence.
Strategic Risks and Challenges
Although new avenues of opportunity are emerging, the continued competition for critical minerals presents numerous challenges. A primary challenge is the unequal distribution of mineral extraction and processing, which creates supply vulnerabilities. Secondly, competition for natural resources may also increase geopolitical tensions between nations, and could lead to further fragmentation of economies. Environmental impacts are another major concern. The extraction of minerals often contributes to ecological degradation, water scarcity & degradation and negative impacts on local social systems. Finally, countries that are seeking rapid industrial growth are facing difficulty in balancing economic security while pursuing sustainable development at the same time. These problems suggest that securing critical minerals will require not only investment but also governance mechanisms that promote long-term resilience through careful management of mineral resource development.
Conclusion
Critical minerals are emerging as one of the defining strategic resources of the twenty-first century. As economies move toward advanced manufacturing, renewable energy, and digital transformation, competition over mineral supply chains is likely to become increasingly significant. Asia, as a manufacturing, technological and geopolitical centre occupies a central position in this transition. However, the future of regional development will require not just controlling resources but also building diversified, resilient and sustainable supply networks. In a constantly evolving global economy, the strategic influence in the coming decades may be determined not only by access to oil and gas but also by who controls the minerals that provide the power for future technologies.
Prapti Das is a Research Intern at NIICE and a student at the School of National Security Studies, Central University of Gujarat.
