Highlights

• The demand for critical minerals is projected to increase sixfold by 2040, creating a $400 billion market in clean energy technologies.
• China currently controls nearly every step of the critical minerals supply chain, prompting aggressive industrial policies from the US and EU to reduce dependence.
• Current strategies focus on domestic mining, international partnerships, and recycling technologies, but fundamental challenges in breaking China's economic monopoly remain unresolved.

The global shift toward clean energy has sparked an intense race to secure critical minerals (CMs)—the raw materials essential for electric vehicles, batteries, and renewable energy technologies. The demand for lithium, rare earth elements, cobalt, and graphite is expected toskyrocket sixfold by 2040, creating a projected $400 billion market.

While these minerals are found in Africa and Latin America, China has established itself as the dominant force in extraction, processing, and manufacturing, controlling nearly every step of the supply chain. The U.S. and the EU now face an urgent challenge: how to reduce their dangerous dependence on China without destabilizing global supply chains.

In response, Washington and Brussels have launched aggressive industrial policies—the 2022 U.S. Inflation Reduction Act (IRA) and the 2023 EU Green Deal Industrial Plan—designed to de-risk their mineral supply chains. Both initiatives focus on three key strategies: expanding domestic mining and processing, securing supply agreements with allies, and investing in recycling technologies.  And now President Trump as issued executive orders including pushes for energy domination and a quest for rare earths and critical minerals.

Yet, this thesis (opens in a new tab) by Janis Chen highlights a key question: Are these efforts truly enough? While the IRA and the EU’s Green Deal aim to break free from China’s monopoly, neither directly addresses the fundamental issue of China’s ability to retaliate economically or undercut global prices to maintain dominance. Additionally, these strategies rely heavily on partnerships with resource-rich developing nations, often without ensuring fair labor and environmental protections—raising concerns about merely shifting the problem rather than solving it.  From this vantage President Trump’s moves may not be sufficient either.

As the geopolitical battle over critical minerals intensifies, the West must ask whether policy ambition is being matched by real structural change—or if China will simply outmaneuver them once again.