Critical Minerals are the New Oil and Gold
Raheem Nkumane outlines why the race for critical minerals will define decades of future growth and innovation.
The role of oil and gold in the global economy and the world’s industrial landscape cannot be understated. Oil powered the industrial revolution for almost two centuries while gold’s historical value supported monetary systems across continents. Corresponding to their importance, control over these resources also entails strategic power for nations. While oil and gold remain as relevant as ever, critical minerals are becoming just as important as the global economy shifts towards massive adoption of clean energy, artificial intelligence, and modern defense technologies. According to the International Energy Agency, demand for critical minerals could increase by up to 700% by 2040 if the world is to meet its declared climate goals alone, something which does not take into account the other range of critical mineral uses.
Critical minerals are raw materials needed for the manufacturing of electric vehicles, wind turbines, solar panel cells, semiconductors, AI infrastructure, and various technologies used in the defense and aerospace industries. The U.S. government now refers to these materials as “key building blocks of our defense industrial base.” This is no exaggeration, as the Pentagon’s Defense Industrial Strategy noted that 90% of the US’ advanced weapons systems rely on critical minerals. What defines a critical mineral constantly evolves, however the list largely includes lithium, cobalt, copper, nickel, rare earth elements (REEs), silicon, and niobium.
As national security and economic competitiveness increasingly rely on the sourcing of these minerals, power competition has developed for control over their supply chains. China, having established a near-monopoly over mineral mining and refining capabilities, has a considerable headstart over other nations. It controls over 60% of global rare earth mining and over 85% of refining capabilities — constituting an even tighter control than that of OPEC over oil. China even supplies the U.S. with over half of its 21 non-fuel minerals. Beijing has also demonstrated how dominance over supply chains can wield power when it banned exports of gallium, germanium, and antimony in early 2025, and temporarily halted the export of rare earth magnets. This, for obvious reasons, has Washington worried – a foreign adversary able to cut off supply for critical minerals represents an acute national security risk.
That said, control over existing mining and refining capabilities represents only one aspect of the current landscape. The search for and discovery of new deposits can easily change the current balance of power, just as North Sea oil and U.S. shale once altered the geopolitics of energy relations. Among the potential sites of such rebalancing are South America’s “Lithium Triangle”, which holds more than half of known reserves. Argentina, Bolivia and Chile together hold nearly 60% of the world’s lithium reserves, and Argentina alone witnessed a 200% growth of it lithium exports over the past few years. Africa’s copper and cobalt deposits are another arena, where resources remain largely untapped. The seabed present additional potential hotspots.
Unlike the oil industry in which state-owned companies or oil majors mostly dominated in the early days, the critical minerals sector has rapidly opened up to a variety of actors, including governments, mining juniors, commodity traders, and local consultants. These entities serve as vital connectors between resource-rich areas and the industries that require critical minerals.
Geneva-based commodity firm BGN International, for instance, is already well-established in global oil, gas, and LPG markets. In light of global shifts, it has recently expanded into critical minerals by establishing an American company, BGN USA, in a bid to help meet Washington’s critical minerals directives. The American firm has already set up marketplaces for African critical minerals — initiatives designed to allow Western-aligned governments and firms easy access to resources regulated by stringent transparency and human rights laws. By connecting suppliers in Africa with defense, renewable energy and AI industries, BGN is positioning itself as a key link between supply and demand while currying favor with Washington, London and other key allied partners.
Trafigura is another notable competitor in the field, which is now financing new mines and refineries from Africa to Australia. Vitol, and Gunvor — additional firms that have traditionally focused on oil — are investing significant sums into metals trading as well. Together, these companies are shifting their focus in preparation for a global economy relying on critical minerals. The top five commodity traders alone invested more than $15 billion in critical minerals projects in 2024.
The role of the private sector is crucial for government strategies too. While Washington retains its levers in the form of tariffs and international partnerships to secure foreign supplies — domestically, it is using the Defense Production Act to provide subsidies for refining and funding for local projects like the MP Materials’ rare-earth magnet plant.
Internationally, it relies on its allies, including Australia, Japan, Argentina as well as G7 partners to work together on improving supply chain security. Certain reforms have allowed the import of foreign deposits, such as those from Australia, levy free for U.S. defense procurement.
In parallel with government initiatives, investors and trading firms are providing capital for the infrastructure necessary in building independent supply chains. These companies effectively extend the reach of governments by making the supply chains economically viable.
The stakes could not be higher. If oil defined the last century, critical minerals will shape the coming one. Countries that fail to secure their supplies in this field and/or to build a measure of independence from their competitors risk becoming vulnerable to market shocks and adversaries’ strategies. The oil crises of the 1970s provide the important lesson that waiting until scarcity strikes is a mistake.
Policymakers need to focus on a number of key areas to prepare for the transformation of the global economy. This includes the diversification of supply sources, investments in domestic production capabilities, and enforcing regulatory standards to ensure transparency. Capital investments from private sector firms should complement government strategies, not replace them. Vice versa, responsible government strategies should build on the opportunities private sector powerhouses represent.
Critical minerals are not just another commodity cycle. They are the basis of clean energy and digital revolutions. If handled well, they can drive decades of growth and innovation. If mismanaged, however, they could create new dependencies, ignite resource nationalism, and repeat the worst mistakes of the oil age. Analysts warn that if demand outpaces supply, the world could witness a minerals shock similar to the 1970s oil shock as early as the 2030s.
Public-private partnerships have an opportunity to get ahead of this trend. With smart investments, they can not only avert such shocks but also exceed expectations in scaling up production.
Raheem Nkumane is Chairman and CEO of Eersteling Gold Mining Company Ltd, Fulus Holdings, and AU Metals and Investment, and serves as Director of Thubekani Mining Services, Silk Route Gold Refinery, and Mzizi Capital. He is also Deputy Chairman of MuntajatalArd, a commodity trading and mining consulting company based in Riyadh. With decades of experience spanning gold, critical minerals, and commodity markets across Africa and beyond, Mr. Nkumane is a leading voice in the evolving discourse on global resource security, investment, and sustainable mining policy.
Image: Alchemist-hp - Own work via Wikimedia Commons.
