By Clyde Russell
LAUNCESTON, Australia (Reuters) – The term critical minerals has become so widespread that it has effectively lost its meaning, as it could be applied to virtually every metal being mined.
What is needed is a new definition that differentiates between what is genuinely vital to a country, and what is just something of importance.
It also was clear at last week’s Mining Indaba 2025 conference in Cape Town that what is critical to one country isn’t necessarily of much importance to another.
So what is a better definition of a critical mineral?
Simply put, it’s a mineral that you don’t have and are worried that you won’t be able to get in the future.
This means that a critical mineral is one that you need, but you don’t have domestic reserves, your strong allies also don’t have sufficient deposits and you don’t control enough of the supply chain to ensure you get what you need when you need it.
A mineral in this situation is distinct from what commodity analysts CRU refer to as a core mineral, which is one that you need but you are fairly confident that you will be able to source now and in the future.
Why is this distinction important?
From a Western perspective, a core mineral is one that you largely can leave to market forces to supply, relying on private mining companies to explore, develop and produce on commercial terms.
However, a genuinely critical mineral is likely to require a different strategy to acquire, such as directly funding new mines, building strategic relationships with host countries and offering offtake agreements that aren’t dependant on market prices.
China has proven much more adept at targeting minerals it sees as critical, investing in mines and infrastructure in foreign countries and in processing plants at home, thereby locking in control of the supply chain.
This has seen China, the world’s biggest importer of commodities, come to dominate much of the global supply chain for minerals vital to the energy transition, such as lithium, cobalt, nickel and rare earths.
It’s no surprise that these four are on China’s list of critical minerals, but given that China now dominates their production and supply, are they still critical to China?
The answer is probably not, but only because Beijing was strategic, rather than solely commercial, in how it went about ensuring it could ensure supply.
These four minerals are also on the critical list of both the United States and the European Union, as are copper, aluminium, antimony, graphite and tungsten.
Critical minerals that are on China’s list alone include iron ore, gold, potash and uranium.
It could be argued that these are indeed genuine critical minerals for China as they are both vital to the economy and ones where Beijing has limited influence over the supply chains.
Take iron ore for example. China relies on imports for more than 80% of its needs, and of its imports more than 90% come from Australia, Brazil and South Africa.
While there are Chinese shareholdings in some of the companies mining iron ore in these countries, Beijing lacks control over the resources and has in effect been a price-taker for the past two decades.
NEW TACTICS NEEDED
Turning to the United States and Europe, it could be questioned as to why copper is on their critical mineral list, as there is little threat to supply, given much of the world’s mined copper is controlled by Western companies in countries that are broadly aligned with the West.
The same could be said for aluminium and lithium, and there are questions as to whether cobalt is actually that vital for the energy transition any longer.
Nickel is an interesting case, as both the United States and the European Union classify it as critical, but they have done nothing to ensure supply.
Rather, they have allowed Chinese-controlled mines and processing plants in Indonesia to dominate the market while those in countries like strong ally Australia are shuttered amid low prices.
If nickel was truly critical, it would be logical to ensure the continued supply from allied nations, even if it cost more to do so.
Likewise if Western countries are genuinely worried about securing minerals such as graphite, tungsten and rare earths, then they need to amend the ways they go about developing mines.
Western mining companies find it difficult to secure long-term funding as they can’t guarantee the price to be received in several years’ time, when a mine can be built and become operational.
This means they lose out to Chinese companies that don’t care about the commercial outcomes as much.
Western governments also have to become more proactive in engaging countries with resources, using both soft power such as aid programmes and direct benefits such as market access in order to cultivate stronger resource relationships.
However, it appears that U.S. President Donald Trump is adopting the exact opposite tactic, abandoning aid and threatening widespread tariffs on allies and enemies alike.
The European Union also appears to move at a glacial pace, producing policies and reports on critical minerals but seemingly doing very little to actually go out and develop supply chains it controls.
The views expressed here are those of the author, a columnist for Reuters.
(Editing by Jamie Freed)
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