Estelle Denton-Townshend has a PhD from the University of Waikato in New Zealand. She currently works at the University of Waikato where she is a teaching fellow. Divergent Options’ content does not contain information of an official nature, nor does the content represent the official position of any government, any organization, or any group.
Title: An Assessment of Critical Minerals, Strategic Competition and Ukraine
Date Originally Written: 4 March 2025
Date Originally Published: 9 March 2025
Authors and / or Article Point of View: There is potential for a major shortage in the global supply and refining capacity of critical minerals and metals. This shortage will significantly impact the relationships between countries that have these essential manufacturing inputs and those that need them. As the global political order shifts, this issue will become more significant, impacting alliances and intensifying the strategic competition between the U.S. and China.
Summary:
The demand for critical minerals is surging due to their pivotal role in the green-energy transition, defence systems, and advances in AI. China maintains a dominant position in the supply chains, including the refinement of numerous critical minerals. Ukraine, which possesses 22 types of critical minerals, faces significant challenges to secure access to these materials from both its adversary, Russia, and its ally, the United States. This scenario highlights the intense geopolitical competition for these resources. Critical minerals are essential for the prosperity and security of states in the emerging era of decarbonization and advanced AI.
Text:
The demand for critical minerals is increasing due to their growing importance for the green-energy transition, defence systems, and advances in AI. The EU’s critical minerals list includes 34 minerals, while the U.S.’s list comprises 50 [1]; [2]. Ukraine possesses 22 of these critical minerals [3]; [4]. NATO identifies 12 minerals as critical for the Allied defence industry of which Ukraine has six [5]; [6]. As noted by Andy Home, a senior metals columnist for Reuters, due to supply vulnerabilities, critical minerals and metals are a “new bargaining chip on the geopolitical table” [7].
In the now infamous press conference on February 28, 2025, President Trump sought to finalize a deal that gave the U.S. access to Ukraine’s rare earth minerals, and he wanted this deal secured before a security guarantee was discussed. President Zelenskyy made it clear he wanted a security guarantee upfront. However, this transactional approach to geopolitics became unstuck as Zelenskyy, Trump and Vice President Vance publicly argued over the deal [8].
In the press conference Trump made his administration’s goals clear:
As you know our country doesn’t have much raw earth minerals. We have a lot of oil and gas, but we don’t have a lot of the raw earth. What we do have is protected by the environmentalists but that can be unprotected, but still, it’s not very much. They have among the best in the world in terms of raw earth. We are going to be using that, taking it, using it for al l the things we do including AI and including weapons, military. It’s really going to satisfy our needs. So, it’s something that we just worked out really well. We have a lot of oil, lot of gas, but we don’t have raw earth. This has just about every component of the raw earth that we need for computing, for all of the things we do. This puts us in great shape [9].
Trump’s focus on rare earth minerals is set against a backdrop of strategic competition with China, and the U.S. desire to spend less defending Ukraine against Russia. As Trump stated on his Truth Social account, “this war is far more important to Europe than it is to us – We have a big, beautiful Ocean [sic] as separation” [10]. However, isolating the critical mineral issue reveals several interesting points. The U.S. Geological Survey states that China dominates the world’s rare earth market, extracting 240,000 tonnes by the end of 2023 and holding reserves of 44 million. The U.S. is the second largest producer extracting 43,000 tonnes in 2023 and having reserves of 1.8 million tonnes [11]; [12]. China also dominates the refining process of critical minerals and is the world’s largest importer [13].
The day after the Biden administration worked to limit China’s chip sector development, the Chinese Commerce Ministry issued a directive on the sale of dual military and civilian use materials to the U.S. due to national security concerns. Restrictions were placed on the export of superhard materials like graphite, gallium, germanium, and antimony to the U.S. These minerals have extensive military applications [14]. Shortly after this exchange of trade restrictions, in January 2025, the Trump administration imposed 10% tariffs on all Chinese goods. Minutes later, China responded with trade restrictions on five critical minerals used heavily in military, information technology, and clean energy products: tungsten, indium, bismuth, tellurium, and molybdenum [15].
The U.S. Department of Defense has repeatedly highlighted the urgency of securing supply chains for critical minerals, including rare-earth minerals. Manifestations of rising strategic competition, such as U.S. pressure on NATO countries to spend more on defence, European fears of Russian encroachment, wariness over Chinese intentions in the Indo-Pacific, the Ukraine war, the Israeli-Gaza war, and rising global tensions, have all contributed to increased military spending. Accordingly, U.S. General James Rainey, commander of the U.S. Army’s Futures Command, points out that the race for dominance in AI, machine learning, and quantum computing is generating evolutionary changes in the character of war [16]. These changes are adding significant momentum to the global race to secure critical minerals. Adam Burstein, the U.S. technical director for strategic and critical materials, confirms the significance of these materials: “virtually every Defense Department system, from unmanned aerial systems and fighter jets to submarines uses critical minerals” [17].
The exponential growth of AI is heavily driven by commercial markets, and this has further intensified the demand for critical minerals [18]. Critical minerals are needed in the manufacturing of AI components such as semiconductors. Furthermore, as AI technology develops it will require an accompanying surge in power demands. Many experts worry about the ability of existing power grids to account for a massive rise in electricity demand. This increase in demand for electricity will also contribute to additional pressure on critical mineral supplies [19].
As climate mitigation and adaptation of green technologies advance, new supply chain anxieties have emerged. The shift towards sustainable energy is not simply limited to reduced use of fossil fuels but also requires increased use of new materials. In fact, according to the International Energy Agency (IEA), clean energy is the key driver of the rise in demand for critical minerals [20]. “A clean energy system is much more minerals- and metals intensive than a conventional fossil fuel energy system, and even with increased circularity, the implications for the extraction of raw materials, and for global competition to secure access to them, are enormous” [21]. According to the IEA if countries meet their current carbon neutral projections, the demand for the critical minerals will triple by 2030, and quadruple by 2040 [22]. Supply chains are not only at risk from geopolitical disruptions from adversaries, but there is also the risk of damage to new and existing mining infrastructure from extreme weather events fuelled by climate change [23].
Returning to the dispute in the oval office, Trump told Zelenskyy that he “doesn’t have the cards right now” [24]. Through the strategic lens of critical raw materials that might not be completely accurate. Most countries are placing a strong emphasis on technology development and the transition to green energy. China currently has a significant advantage in the refining and supply of critical minerals and metals, and this is a significant dynamic in U.S.-China strategic competition. This situation provides Ukraine with some leverage for future negotiations. However, Trump has paused military aid to Ukraine, while insisting that a deal is still possible [25]. His actions belie the U.S.’ commitment to its allies and demonstrate the importance of self-interest in transactional relations.
Endnotes:
[1] European Commission. Critical raw materials. European Commission. [Online] 2023. https://single-market-economy.ec.europa.eu/sectors/raw-materials/areas-specific-interest/critical-raw-materials_en
[2] Ukrainian Geological Survey & Ministry of Environmental Protection and Natural Resources of Ukraine. Ukraine: Mining Investment Opportunities. State Service for Geology and Mineral Resources of Ukraine. [Online] 2024. https://www.geo.gov.ua/wp-content/uploads/presentations/en/investment-opportunities-in-exploration-production-strategic-and-critical-minerals.pdf
[3] Duggal, Hanna and Ali, Marium. Mapping Ukraine’s rare earth and critical minerals. Al Jazeera. [Online] 28 February 2025. https://www.aljazeera.com/news/2025/2/28/mapping-ukraines-rare-earth-and-critical-minerals
[4] Ukrainian Geological Survey & Ministry of Environmental Protection and Natural Resources of Ukraine. Ukraine: Mining Investment Opportunities. State Service for Geology and Mineral Resources of Ukraine. [Online] 2024. https://www.geo.gov.ua/wp-content/uploads/presentations/en/investment-opportunities-in-exploration-production-strategic-and-critical-minerals.pdf
[5] NATO. NATO releases list of 12 defence-critical raw materials. NATO. [Online] 11 December 2024. https://www.nato.int/cps/en/natohq/news_231765.htm
[6] Ukrainian Geological Survey & Ministry of Environmental Protection and Natural Resources of Ukraine. Ukraine: Mining Investment Opportunities. State Service for Geology and Mineral Resources of Ukraine. [Online] 2024. https://www.geo.gov.ua/wp-content/uploads/presentations/en/investment-opportunities-in-exploration-production-strategic-and-critical-minerals.pdf
[7] Home, Andy. Commentary: Critical minerals take centre stage in world politics. Reuters. [Online] 1 March 2025. https://www.reuters.com/markets/commodities/critical-minerals-take-centre-stage-world-politics-andy-home-2025-02-28/
[8] Volodymyr, President Zelenskyy, Trump, President Donald and Vance, Vice President James D. Watch Trump and Zelenskyy’s full remarks during White House meeting. Youtube. [Online] 25 February 2025. https://www.youtube.com/watch?v=kEOv4x_FIsc
[9] Volodymyr, President Zelenskyy, Trump, President Donald and Vance, Vice President James D. Watch Trump and Zelenskyy’s full remarks during White House meeting. Youtube. [Online] 25 February 2025. https://www.youtube.com/watch?v=kEOv4x_FIsc
[10] Trump, President Donald. Truth Social. [Online] 2025. https://x.com/realDonaldTrump/status/1892242622623699357
[11] Cordier, Daniel J. Rare Earths. US Geological Survey (USGS). [Online] 2024. https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-rare-earths.pdf
[12] Rockwell, Keith. How China is weaponising its dominance of critical minerals trade. East Asia Forum. [Online] 19 February 2025. https://eastasiaforum.org/2025/02/19/how-china-is-weaponising-its-dominance-in-critical-minerals-trade/
[13] Weihuan, Zhou. Why China’s critical mineral strategy goes beyond geopolitics. World Economic forum. [Online] 19 November2024. https://www.weforum.org/stories/2024/11/china-critical-mineral-strategy-beyond-geopolitics/
[14] Lv, Amy and Munroe, Tony. China bans export of critical minerals to US as trade tensions escalate. Reuters. [Online] 4 December 2025. https://www.reuters.com/markets/commodities/china-bans-exports-gallium-germanium-antimony-us-2024-12-03/
[15] Shivaprasad, Asthitha, Lv, Amy and Jackson, Lewis. What are the five critical metal exports restricted by China. Reuters. [Online] 5 February 2025. https://www.reuters.com/markets/commodities/what-are-five-new-critical-metal-exports-restricted-by-china-2025-02-04/
[16] Seffers, George I. Gen. James Rainey: Man-Machine Integration May Revolutionize Combat Arms. Signal. [Online] 17 August 2023. https://www.afcea.org/signal-media/gen-james-rainey-man-machine-integration-may-revolutionize-combat-arms/
[17] Vergun, David. Securing Critical Minerals Vital to National Security, Official Says. US Department of Defense. [Online] 10 Janary 2025. https://www.defense.gov/News/News-Stories/Article/Article/4026144/securing-critical-minerals-vital-to-national-security-official-says/
[18] The Oregon Group. Fourth Industrial Revolution: Articial Intelligence and the next critical minerial supercycle. The Oregon Group. [Online] 2024. https://theoregongroup.com/themencode-pdf-viewer/?file=https://theoregongroup.com/wp-content/uploads/2024/04/Artificial-Intelligence-and-the-next-Critical-Mineral-Supercycle-The-Oregon-Group.pdf#zoom=page-width&pagemode=thumbs
[19] The Oregon Group. Fourth Industrial Revolution: Articial Intelligence and the next critical minerial supercycle. The Oregon Group. [Online] 2024. https://theoregongroup.com/themencode-pdf-viewer/?file=https://theoregongroup.com/wp-content/uploads/2024/04/Artificial-Intelligence-and-the-next-Critical-Mineral-Supercycle-The-Oregon-Group.pdf#zoom=page-width&pagemode=thumbs
[20] International Energy Agency. A new frontier for Global energy security: critical minerals. International Energy Agency. [Online] 2024. https://www.iea.org/topics/critical-minerals
[21] Carrara, S., Bobba, S., Blagoeva, D., Alves Dias, P., Cavalli, A., Georgitzikis, K., Grohol, M., Itul, A., Kuzov, T., Latunussa, C., Lyons, L., Malano, G., Maury, T., Prior Arce, A., Somers, J., Telsnig, T., Veeh, C., Wittmer, D., Black, C., Pennington, D. Supply chain analysis and material demand forecast in strategic technologies and sectors in the EU – A foresight study. European Commission: JRC Publishing Repository. [Online] 2023. https://publications.jrc.ec.europa.eu/repository/handle/JRC132889
[22] International Energy Agency. A new frontier for Global energy security: critical minerals. International Energy Agency. [Online] 2024. https://www.iea.org/topics/critical-minerals
[23] Carlin, David and Arshad, Marheen. Sectoral Risk Briefings: Insights for Financial Insitutions. UN Environment Programme. [Online] May 2024. https://www.unepfi.org/wordpress/wp-content/uploads/2024/05/Climate-Risks-in-the-Metals-and-Mining-Sector-1.pdf
[24] Volodymyr, President Zelenskyy, Trump, President Donald and Vance, Vice President James D. Watch Trump and Zelenskyy’s full remarks during White House meeting. Youtube. [Online] 25 February 2025. https://www.youtube.com/watch?v=kEOv4x_FIsc
[25] Shalal, Andrea, Slattery, Gram. Trump pauses all U.S. aid to Ukraine after angry clash with Zelenskiy. Reuters. [Online] 4 March 2025. https://www.reuters.com/world/europe/trump-halts-all-us-military-aid-ukraine-white-house-official-says-2025-03-04/
