The European Union is making a major shift in its strategy to useful resource safety, making ready to launch a strategic stockpiling program for vital minerals. Amid rising geopolitical tensions and dangers, this new EU stockpiling technique, which the Monetary Occasions first reported on final weekend, indicators Brussels’s intent to scale back vulnerabilities within the provide of key uncooked supplies and elements, reminiscent of uncommon earths, lithium, and everlasting magnets, which might be important for clear vitality applied sciences, digital infrastructure, and protection functions. Whereas the EU just isn’t the primary to undertake such measures—Japan, South Korea, and america have lengthy maintained nationwide stockpiles—this transfer underscores a broader securitization of vital mineral provide chains. However whereas stockpiling might provide short-term resilience, it displays a largely unilateral response to a broader world problem. With out stronger multilateral cooperation, such methods danger exacerbating useful resource competitors and undermining efforts to make sure honest and equitable entry to the supplies wanted for the worldwide vitality transition.
Latest tensions between america and China over rare-earth exports seem to have eased following a brand new commerce settlement signed final month, however this diplomatic breakthrough provides solely non permanent aid in an more and more risky market. Deeper structural challenges are apparent: the shortage of sturdy worldwide governance and coordination throughout vital uncooked materials worth chains. Earlier episodes underscore the issue. In April, U.S. President Donald Trump pressured Ukraine right into a vital minerals deal that will enable america entry to Ukraine’s mineral sources as a situation for continued army assist. Trump additionally repeatedly made provocative claims about buying Greenland (“We want Greenland very badly”), not ruling out utilizing army power, motivated partly by Greenland’s huge untapped mineral sources.
The European Union is making a major shift in its strategy to useful resource safety, making ready to launch a strategic stockpiling program for vital minerals. Amid rising geopolitical tensions and dangers, this new EU stockpiling technique, which the Monetary Occasions first reported on final weekend, indicators Brussels’s intent to scale back vulnerabilities within the provide of key uncooked supplies and elements, reminiscent of uncommon earths, lithium, and everlasting magnets, which might be important for clear vitality applied sciences, digital infrastructure, and protection functions. Whereas the EU just isn’t the primary to undertake such measures—Japan, South Korea, and america have lengthy maintained nationwide stockpiles—this transfer underscores a broader securitization of vital mineral provide chains. However whereas stockpiling might provide short-term resilience, it displays a largely unilateral response to a broader world problem. With out stronger multilateral cooperation, such methods danger exacerbating useful resource competitors and undermining efforts to make sure honest and equitable entry to the supplies wanted for the worldwide vitality transition.
Latest tensions between america and China over rare-earth exports seem to have eased following a brand new commerce settlement signed final month, however this diplomatic breakthrough provides solely non permanent aid in an more and more risky market. Deeper structural challenges are apparent: the shortage of sturdy worldwide governance and coordination throughout vital uncooked materials worth chains. Earlier episodes underscore the issue. In April, U.S. President Donald Trump pressured Ukraine right into a vital minerals deal that will enable america entry to Ukraine’s mineral sources as a situation for continued army assist. Trump additionally repeatedly made provocative claims about buying Greenland (“We want Greenland very badly”), not ruling out utilizing army power, motivated partly by Greenland’s huge untapped mineral sources.
These incidents spotlight a rising danger that vital uncooked supplies could also be used as devices of geopolitical leverage, with smaller or resource-rich international locations dealing with stress to enter into asymmetrical or extractive bilateral agreements that probably undermine their sovereignty and long-term improvement targets. To handle these points, the worldwide group ought to set up a dependable institutional framework to handle dangers to international locations and provide chains, promote transparency, and guarantee equitable entry and profit sharing. In any other case, such geopolitical flashpoints are more likely to recur with rising frequency and rising stakes.
At present, no establishment exists to coordinate the governance of uncooked supplies globally—although their systemic significance is barely rising. In keeping with the Worldwide Useful resource Panel, a physique of scientists and coverage consultants established by the United Nations Setting Program, useful resource extraction and use have greater than tripled since 1970. By 2060, useful resource extraction might rise even additional by 60 p.c from 2020 ranges, driving rising environmental harm, local weather change, and geopolitical dangers.
The dangers of this clear governance hole are rising tensions amongst international locations over these sources, exploitation of nations within the world south, and, within the absence of generally adopted requirements, environmental impacts from mining explorations. Additionally, intensifying world competitors for vital uncooked supplies is fueling nationwide stockpiling. Uncoordinated stockpiling by a number of international locations will set off a worldwide race for useful resource hoarding, which in flip results in market distortions and inflation of costs. It may additionally gas mistrust and provoke retaliatory insurance policies, such because the imposition of export restrictions or export bans, and in addition a shift towards zero-sum useful resource diplomacy.
New concepts and initiatives are rising to handle these challenges. One such proposal, just lately put ahead by the United Nations College, is the creation of a International Minerals Belief, a mechanism for collective stockpiling of vital minerals and coordinated, equitable distribution amongst international locations. Colombia has referred to as for a world minerals treaty, pushed by the pressing have to fight unlawful gold mining and its devastating influence on human well being and the setting. These are a daring steps towards addressing one of the crucial undergoverned features of the worldwide financial system. Nonetheless, negotiating such a treaty on the worldwide stage poses vital challenges. First, a decision would have to be handed at December’s UNEA-7, a gathering of the United Nations’ highest environmental decision-making physique. Securing settlement amongst member states to even start formal negotiations is a political and procedural hurdle, notably given diverging nationwide pursuits over useful resource sovereignty, commerce, and improvement priorities. If a decision have been adopted, the treaty negotiation course of would possible span a number of years, involving protracted discussions over definitions, scope, enforcement mechanisms, and financing—mirroring the advanced pathways of different multilateral environmental agreements.
Another choice might be a extra agile and rapid step: the institution of an Worldwide Supplies Company, fashioned initially by a coalition of nations. This might in all probability be a gaggle of center powers, moderately than massive gamers.
Led by the co-chairs of the Worldwide Useful resource Panel, a rising variety of worldwide organizations (together with the World Enterprise Council for Sustainable Growth, Membership of Rome, and WWF) and consultants have issued a worldwide name to motion for enhancing world supplies stewardship and governance via an such an company. Now the Worldwide Power Company (IEA) itself has added its voice to rising requires larger cooperation on the difficulty of vital minerals. In its newest International Important Minerals Outlook, printed in Might, the IEA warned of rising dangers of disruption to mineral provide chains because the market turns into more and more concentrated as a substitute of turning into extra diversified.
This focus is very true in refining and processing, regardless of efforts by the Biden administration and the EU to construct refining and processing capability and make investments billions of {dollars} beneath packages such because the EU’s Important Uncooked Supplies Act. Between 2020 and 2024, almost 90 p.c of development in refined provide got here from a handful of dominant suppliers. Indonesia leads in nickel processing, whereas China dominates the refining of cobalt, graphite, uncommon earths, and, together with the Democratic Republic of the Congo, copper. Because of this, the highest three refining international locations now maintain a median market share of 86 p.c, up from 82 p.c in 2020.
An Worldwide Supplies Company might serve a number of vital capabilities. On the most simple stage, it will provide authoritative information on world materials flows, reserves, market traits and costs, and recycling charges. It could additionally facilitate coverage coordination on points reminiscent of sustainable extraction, round financial system integration, and equitable profit sharing. As well as, the company might provide dispute decision and negotiation assist for mineral agreements—as seen in current instances involving america and Ukraine and america and Congo. Capability constructing can be one other core operate, serving to resource-rich international locations strengthen their negotiation capabilities. Lastly, the company might play a coordinating function throughout provide disruptions or geopolitical tensions, reminiscent of potential future rare-earth embargoes by China or different key suppliers.
The company’s world information hub would cowl the total vary of supplies important for attaining local weather and sustainable improvement targets, with a selected give attention to vital minerals. The info hub would improve transparency throughout world provide chains and allow the monitoring of their environmental and social impacts. Past information provision, the company would promote sustainable materials use and round financial system rules by advancing extra core missions reminiscent of enhancing materials effectivity and circularity throughout key sectors reminiscent of mining, vitality, and development. It could assist enhancing fairness and accountability via profit sharing, honest contracts, and environmental, social, and governance requirements. By strengthening world cooperation and coverage alignment, fragmented responses and useful resource nationalism will be averted.
To satisfy these goals, the company’s broader mandates might embody setting worldwide technical benchmarks and sustainability requirements for extraction, processing, and recycling, in addition to offering technical help and capability constructing to resource-rich international locations to strengthen negotiation capability and environmental oversight. It could act as a impartial platform for dispute decision and dialogue between governments, corporations, and communities impacted by useful resource extraction actions and assist innovation and funding in round applied sciences and various supplies via data trade and public-private partnerships. In so doing, the company would align world materials governance with environmental integrity, financial improvement, and geopolitical stability.
There are classes from current historical past of worldwide establishments being established to handle geopolitical useful resource crises. The IEA was established in 1974 within the wake of the 1973 oil shock, which uncovered the vulnerability of oil-importing international locations to produce shocks and geopolitical disruptions. Created beneath the framework of the Group for Financial Cooperation and Growth (OECD), the IEA was designed to foster larger coordination amongst industrialized nations in responding to vitality emergencies and to scale back their collective dependence on OPEC oil. Its founding mandate centered on creating shared vitality safety methods, establishing emergency oil-sharing mechanisms, and enhancing the transparency of vitality markets via dependable information and evaluation. Over time, the IEA developed into a number one authority on world vitality coverage, providing coverage recommendation and an institutional automobile for cooperation on vitality coverage. The IEA gives information and forecasts and fosters worldwide cooperation on vitality transitions to handle local weather change. The company’s creation mirrored the belief that fragmented nationwide responses to useful resource crises have been insufficient and that multilateral coordination was important for each financial stability and geopolitical resilience.
One other instance is the Worldwide Renewable Power Company (IRENA), established in 2009 as a response to the rising world recognition of the necessity to speed up the deployment of renewable vitality applied sciences to handle local weather change, vitality entry, and sustainable improvement. Not like the IEA, which was created in response to fossil gas provide shocks, IRENA was fashioned to assist international locations of their transition to renewable vitality by offering coverage recommendation, capability constructing, know-how street maps, and information on renewable vitality traits. Its creation marked a shift in world vitality governance towards a extra inclusive and forward-looking strategy centered on decarbonization and equitable vitality entry.
A few of the challenges for the institution of an Worldwide Supplies Company is that it’s going to require political buy-in from each producing and consuming nations. It additionally should keep away from duplicating present initiatives and as a substitute foster complementarity. In the best way the IEA was established as an OECD initiative, the company wouldn’t want full U.N. endorsement however moderately governmental endorsement at a serious summit.
Establishing an Worldwide Supplies Company will face a number of implementation challenges, starting with the necessity to translate professional proposals into political momentum. The primary vital step might be for a gaggle of governments to collectively make a proper political dedication and publicly champion the concept. This might ideally be inside multilateral boards such because the G-20 (lead this 12 months by South Africa) or at UNEA-7.
This might have to be adopted by the event of a transparent mandate and governance construction (balancing the pursuits of each uncooked material-producing international locations and industrialized international locations with company know-how suppliers) via inclusive consultations.
A 3rd step would contain securing preliminary funding and institutional assist, probably from a mixture of governments and multilateral banks. This might probably additionally come from the philanthropic sector and foundations.
Lastly, to construct credibility and reveal worth early on, the company ought to give attention to a set of focused coordination capabilities—reminiscent of information harmonization, diplomatic disaster response protocols, or capability constructing for mineral-producing international locations—whereas leaving the door open to evolve right into a treaty-supporting physique over time.
Establishing a brand new establishment might sound difficult, particularly at a time when multilateralism is beneath pressure and plenty of international locations are retreating from worldwide commitments. But such an company provides probably the most promising path to align sustainability, useful resource safety, and fairness in an more and more material-intensive world financial system. The worldwide race for sources should not change into one other world danger.
