Resource Nationalism and the New Geoeconomics of Critical Minerals: Outlook to 2040

The report analyzes the impact of rapidly growing demand for critical minerals (lithium, cobalt, nickel, copper, and rare earth elements) on global trade flows and supply chain structures. These resources are becoming essential to low-carbon technologies, battery systems, electric vehicles, digital infrastructure, and industrial electrification. According to the International Energy Agency (IEA), lithium demand will increase by 353% between 2024 and 2040, graphite demand by 131%, and the share of clean technologies in lithium demand will rise from 62% to 87%.

Demand growth is accompanied by a high concentration of supply. In 2025, the Democratic Republic of the Congo accounted for 74% of global cobalt production, Indonesia for 67% of nickel, and China for 69% of rare earth elements and 78% of natural graphite. Concentration is even higher in processing: China dominates the refining of lithium, cobalt, and rare earth elements, while Indonesia accounts for 43% of global nickel processing capacity. This structure increases supply chain vulnerability and dependence on a limited number of suppliers.

Since 2020, countries with large reserves of critical minerals have stepped up their use of trade measures aimed at increasing domestic processing and strengthening national control over exports. Nearly 100 new export measures have been introduced, including licensing requirements, export duties, bans, and quotas. The Democratic Republic of the Congo, China, and Indonesia have adopted the largest number of measures. These instruments are intended to develop domestic processing, increase revenues, and control strategic resources.

The report focuses in particular on the emergence of export sovereignty. The trend toward “resource nationalism” is taking hold in African countries, where governments restrict raw material exports to encourage domestic processing. Zimbabwe, which has the largest lithium reserves in Africa, doubled its export revenues to $178.6 million per quarter after introducing a statutory ban on exports of unprocessed ore. Countries of the Global South are increasingly requiring multinational corporations to establish processing facilities within their borders, reshaping established value chains and redistributing economic benefits.

At the same time, the largest importers (the EU, the United States, and Japan) are developing diversification strategies, expanding processing, developing processing, and establishing international partnerships. Since 2022, 58 new cooperation agreements on critical minerals have been signed, covering exploration, mining, processing, use, and recycling. Modern agreements combine trade, investment, and industrial policy tools, including subsidies, offtake contracts, export credit, and coordination of pricing mechanisms.

According to the STEPS projection scenario through 2040, global demand for critical minerals will grow rapidly: lithium demand will increase by 353%, graphite by 131%, nickel by 69%, magnet rare earth elements by 65%, cobalt by 49%, and copper by 28%. Meanwhile, the share of clean technologies in demand will rise substantially: for lithium, from 62% to 87%; for graphite, from 32% to 52%; for nickel, from 17% to 42%; and for cobalt, from 32% to 41%.

The report draws several conclusions. Global trade in critical minerals is entering a period of profound structural change. Rising demand, highly concentrated supply, and the active use of trade policy create the risk of market fragmentation and the formation of competing blocs. For developing countries, the key challenge is to move from supplying raw materials to participating in processing and manufacturing. Stronger international cooperation and coherent trade policies are essential to building resilient, transparent, and inclusive supply chains that support the global energy transition.

Author: Candidate of Economic Sciences, Associate Professor, Department of World Economy and International Finance, Financial University under the Government of the Russian Federation, Moscow, Alexey Alekseevich Soluyanov