What happens when countries start competing not just over territory or technology, but over the supply chains underneath them?

The United States has just announced a one-year restriction on exports of tungsten scrap and battery waste, part of a broader effort to keep recoverable critical minerals at home, expand domestic recycling and reduce its dependence on foreign supply chains, particularly those dominated by China.

On the surface, it looks like another piece of trade policy. Look closer, and it becomes part of a much larger contest over who controls the materials the modern economy cannot function without.

Why tungsten? Why now? And why are governments suddenly so concerned about where seemingly unremarkable materials like scrap metal end up?

To understand that, we need to go back sixteen years: to a fishing boat, a disputed group of islands, and a supply chain most of the world had barely thought about.

By 2010, rare earths had become essential to the modern economy. They were used in virtually everything from smartphones, hard drives and hybrid cars to radar systems, precision weapons and high-performance magnets. What made them particularly significant was how difficult they were to substitute and how concentrated their supply had become, with China accounting for the vast majority of global production.

Despite the name, rare earth elements are not exactly rare in geological terms. Many occur in the Earth’s crust at abundances comparable to more familiar metals. The problem is that they are rarely found in concentrations that make them easy or economical to extract. They are typically dispersed through ore deposits, often mixed with one another and sometimes found alongside radioactive materials. Producing relatively small quantities can therefore require moving and processing large amounts of ore, with significant environmental and economic costs.

China’s rare-earth industry expanded rapidly over the following decades. Between 1978 and 1995, its rare-earth production increased by an average of 40% a year. As Chinese output and exports expanded through the 1990s, global prices fell and competing producers struggled to remain viable. By 2010, China dominated global rare-earth production.

That concentration was even greater for some strategically important heavy rare earths. Elements such as dysprosium and terbium were essential to high-performance magnets, electronics and defense systems, meaning several major industries depended on a highly concentrated source of supply.

That vulnerability became impossible to ignore in September 2010. A Chinese fishing captain was detained after his vessel collided with two Japanese Coast Guard ships near the disputed Senkaku/Diaoyu Islands, which are administered by Japan but claimed by China. As diplomatic tensions escalated, rare-earth shipments from China to Japan were temporarily disrupted, exposing just how dependent Japan, and much of the wider global economy, had become on Chinese supply.

At this point, I found myself asking a fairly obvious question: if rare earths are found around the world, why couldn’t Japan just buy them somewhere else?

Finding another deposit, it turned out, was only part of the solution. Mining is just the beginning. Once out of the ground, rare earths have to be separated from one another, refined and processed into materials manufacturers can actually use. By 2010, much of that capacity was concentrated in China as well.

Alternative deposits existed in countries such as the United States and Australia, but replacing Chinese supply required much more than opening another mine. It meant building processing facilities, developing technical expertise, securing investment and connecting each stage of the supply chain. None of that could happen overnight.

For years, there was little economic pressure to change that arrangement because the system worked. China could produce rare earths at enormous scale, manufacturers had reliable access to the materials they needed, and consumers benefited from lower costs.

Japan’s response was swift. Within a month of the 2010 disruption, the government had approved a ¥100 billion supplementary package, about $1.2 billion at the time, to strengthen the resilience of its rare-earth supply chain.

In 2011, state-backed JOGMEC and trading company Sojitz provided $250 million in loans and equity to Australia’s Lynas, securing at least 8,500 tonnes of rare-earth products a year for Japan over the following decade—roughly 30% of the Japanese market at the time.

But Japan wasn’t just looking for alternative suppliers. It was also challenging the rules that had made the disruption possible in the first place.

In March 2012, the United States and the European Union joined Japan in challenging China’s rare-earth export restrictions at the World Trade Organization. The three argued that China’s export quotas, duties and other restrictions unfairly limited foreign access to critical raw materials while giving domestic manufacturers an advantage. China rejected that characterization, maintaining that the restrictions were intended to conserve resources and limit the environmental damage caused by mining.

Announcing the US challenge from the White House, President Barack Obama argued that China’s policies were distorting the market: “If China would simply let the market work on its own we would have no objections.”

Two years later, the WTO had largely sided with the challengers. In March 2014, a WTO panel found that China’s export duties, quotas and certain restrictions on rare earths, tungsten and molybdenum were inconsistent with its trade obligations. China appealed, but the WTO’s Appellate Body mostly upheld the findings, and the rulings were formally adopted in August 2014. By 2015, China had removed the export quotas and duties covered by the dispute.

By then, however, the economics that had made alternative suppliers so attractive were beginning to change. Rare-earth prices had surged more than ten-fold during the 2010–11 crisis, making new sources of supply suddenly look both strategically necessary and commercially attractive. As fears of shortages eased and new production entered the market, however, prices fell sharply. Projects conceived during the boom now had to compete in a very different market.

One of the projects caught up in that changing market was Mountain Pass, a California mine that had once been at the centre of the global rare-earth industry. It had supplied much of the world’s demand before cheaper Chinese production and environmental problems contributed to its decline, eventually bringing mining to a halt in 2002. Years later, Molycorp set out to revive it.

The company raised roughly $400 million through an IPO in July 2010 and eventually poured more than $1 billion into rebuilding and expanding Mountain Pass, hoping to restore a domestic American rare-earth supply chain. Mining restarted in 2012. At first, the timing appeared almost perfect: prices were soaring and governments were suddenly confronting the risks of depending so heavily on China.

But then the market turned. As rare-earth prices fell, Molycorp was left with an expensive new operation competing in a market still dominated by lower-cost Chinese supply. Production problems, mounting losses and heavy debt made matters worse. In June 2015, less than three years after restarting mining, Molycorp filed for Chapter 11 bankruptcy. Mountain Pass was idled later that year.

It was difficult to miss the irony. Falling prices were good news for manufacturers and consumers, but they also weakened the business case for the very alternative suppliers governments wanted.

The crisis had shown the risks of dependence, but the years that followed showed just how difficult it would be to break away from it.

The immediate crisis eventually passed, but many of the supply-chain vulnerabilities it exposed remained. By 2022, the competition had moved beyond rare earths. This time, the focus was advanced semiconductors, a supply chain in which China did not hold the same position it did in rare earths.

In August, President Joe Biden signed the CHIPS and Science Act, committing roughly $52 billion to semiconductor manufacturing, research and related incentives in the United States. The legislation was intended to strengthen domestic chipmaking capacity, but it also reflected the growing strategic importance Washington placed on an industry increasingly central to economic and national security.

Two months later, the US went further. On October 7, the US introduced sweeping export controls designed to restrict China’s ability to obtain advanced computing chips, develop supercomputers and manufacture advanced semiconductors. The rules also limited exports of certain chipmaking equipment and restricted US persons from supporting some advanced semiconductor production in China without a license. Washington justified the measures on national-security grounds, particularly the potential military applications of advanced computing technology.

Within a few months, semiconductors had become a central part of the US–China economic confrontation. China’s response would follow the next year.

In July 2023, Beijing announced export controls on gallium and germanium, requiring exporters to obtain government licenses to ship specified products abroad from August 1. China said the measures were intended to protect national security.

At the time, China accounted for roughly 98% of global gallium production and was also the dominant producer of germanium, making both markets highly concentrated.

Both metals sit inside technologies at the centre of the US–China competition. Gallium is used in compounds such as gallium nitride (GaN) and gallium arsenide (GaAs) for specialized semiconductors and communications technologies, while germanium is used in semiconductors, fibre optics, infrared optics and solar technologies.

Less than a year earlier, Washington had moved to restrict China’s access to advanced semiconductors and the equipment needed to manufacture them. Beijing’s new controls affected a different part of the same supply chain: some of the materials those technologies depend on.

Three months later, it was graphite.

In October, China announced export controls on certain high-specification synthetic graphite and natural flake graphite products, effective December 1. Graphite is the dominant material used in lithium-ion battery anodes, placing it at the heart of electric vehicles, consumer electronics and energy storage.

Once again, the advantage was not simply what lay underground. It was processing. China had built an enormous industrial base for turning graphite into the specialized material battery manufacturers actually needed; more than 90% of global anode material is now produced there.

By 2024, the list kept growing.

In August, Beijing added antimony and related products to its export-control regime. Used across advanced manufacturing and strategic applications, antimony exposed another familiar vulnerability: the United States had no domestic mined production and remained heavily dependent on imports, with China its largest foreign source.

Gallium. Germanium. Graphite. Antimony.

In little more than a year, Beijing had placed controls on a growing collection of materials underpinning semiconductors, communications, batteries and advanced industries. In December 2024, that approach shifted, with new measures applying specifically to the United States.

A day after Washington announced another round of restrictions on China’s semiconductor industry, Beijing tightened its own controls specifically against the United States. Exports of dual-use gallium, germanium, antimony and superhard materials to the US would, in principle, no longer be permitted, while graphite shipments would face stricter end-user and end-use scrutiny. China also prohibited exports of dual-use items to US military users or for military purposes.

Two months later, the list expanded again.

On February 4, 2025, China introduced new export controls on specified products and technologies involving tungsten, tellurium, bismuth, molybdenum and indium. Unlike the December measures, these were not limited specifically to the United States. Beijing again cited national security and non-proliferation obligations.

Among them was tungsten—the metal at the centre of this story.

Which brings us back to the present. In July 2026, President Donald Trump gave federal officials new authority to restrict exports of scrap and waste containing recoverable critical minerals. Days later, the Commerce Department announced a one-year restriction on exports of tungsten-containing scrap and battery waste, effective August 27, as part of an effort to retain more recoverable minerals for domestic use and reduce foreign dependence.

Sixteen years after the 2010 rare-earth crisis, both countries are increasingly treating control over critical supply chains as an instrument of economic and national-security policy.

So why are governments doing this, and why now?

The White House argues that America’s inadequate supply of critical minerals and materials “poses an increasing risk to our national defense and security,” warning that dependence on foreign sources leaves the country vulnerable to supply disruptions.

But beneath that language lies the same vulnerability this story began with: dependence. The new policy is part of a broader effort to recover more critical minerals domestically, expand processing capacity and reduce reliance on foreign supply chains.

In other words, the United States is trying to make itself harder to cut off.

But why have minerals most people rarely think about become important enough for governments to fight over?

Part of the answer is that the foundations of economic power are changing. For much of the last century, access to oil and gas shaped industrial strength, energy security and geopolitics. Fossil fuels remain strategically important, but they are increasingly being joined by another class of resources: critical minerals.

As economies electrify and technologies such as artificial intelligence, electric vehicles and renewable energy expand, materials including copper, lithium, nickel, cobalt, graphite and rare earth elements are becoming increasingly important to the infrastructure underneath them. Batteries need lithium and graphite. Electricity grids require enormous quantities of copper and aluminum. Rare-earth magnets power electric motors and wind turbines, while other strategic minerals feed into semiconductors and advanced technologies.

Demand is already moving in that direction. In 2024, lithium demand grew by nearly 30%, while demand for nickel, cobalt, graphite and rare earths rose by 6–8%.

Oil helped determine who could power the industrial economy. Critical minerals are increasingly helping determine who can build the technologies shaping the next one.

For decades, global supply chains were built primarily around efficiency. Increasingly, governments are asking them to deliver something else: resilience. The rare-earth crisis and the export controls that followed exposed the trade-off. Concentrating production could lower costs, but it also created vulnerabilities.

Governments are increasingly willing to pay to reduce them. Public financing can support mines and processing facilities that might struggle to compete on price alone; stockpiles provide buffers against disruption; recycling recovers materials already inside domestic economies; and partnerships with allies create alternative sources without requiring complete self-sufficiency.

The change does not mean efficiency no longer matters. It means governments are increasingly willing to pay a kind of “mineral security premium” for greater resilience.

There is still a catch. Diversification remains uneven. New mining capacity is emerging outside dominant suppliers, but refining and downstream manufacturing are proving harder to replicate. In rare earths, for example, the IEA expects nearly 50,000 tonnes of mining capacity outside the leading producer by 2035, compared with less than 40,000 tonnes of planned refining and separation capacity and only around 18,000 tonnes further downstream.

The goal is shifting from building the cheapest supply chain possible to building one that can survive disruption.

So where might the next pressure points emerge?

Lithium, copper, graphite, nickel and rare earth elements sit at the centre of expanding supply chains for batteries, electricity networks, electric vehicles and advanced manufacturing.

Under the IEA's 2025 stated-policy scenario, lithium demand was projected to grow from 205,000 tonnes in 2024 to 928,000 tonnes in 2040—more than fourfold. Copper demand was projected to rise from about 26.7 million tonnes to 34.1 million tonnes over the same period.

But rising demand alone does not make a mineral a geopolitical flashpoint. The greater danger comes when growing demand meets concentrated supply, limited substitutes and alternatives that take years to develop.

The IEA's 2025 outlook projected 2035 mine-supply shortfalls of roughly 30% for copper and 40% for lithium, while graphite and rare earths faced a different vulnerability: greater geographical concentration.

The next strategic mineral may therefore not be the one the world is running out of. It may be the one the world needs, but cannot easily get from somewhere else.

The search for alternatives is already reshaping the mineral economy. But having minerals underground will not be enough.

Australia is well positioned as an alternative supplier, while Indonesia has demonstrated how processing can transform a country's strategic importance. Rather than remaining primarily an exporter of nickel ore, Indonesia used export restrictions and industrial policy to encourage more processing at home.

Latin America may have an even larger opportunity. The region already produces around 40% of the world's mined copper and roughly a quarter of its lithium, yet, excluding lithium, it refines only around 20% of the key energy minerals it extracts.

The IEA estimates that expanding domestic processing could raise the value generated by the region's mineral sector to around $220 billion by 2035, nearly 50% above today's level.

The countries that benefit most from the new mineral economy may not simply be those with the resources, but those capable of processing them.

Businesses face much the same calculation. Companies exposed to critical-mineral constrictions can diversify suppliers, secure materials through long-term agreements and direct investment, and increasingly consider geopolitical risk alongside price when deciding where to source.

Others can reduce their exposure through recycling, substitution and product redesign, or hold larger inventories of materials that cannot easily be replaced.

The shift mirrors what is happening at government level: efficiency is no longer enough. Companies increasingly have to price resilience into how their supply chains are built.

The consequences extend far beyond mining.

Artificial intelligence may appear largely digital, but the infrastructure underneath it is intensely physical. Data centers, semiconductor manufacturing, electricity networks and advanced electronics all depend on critical minerals.

Defense faces the same vulnerability. NATO has identified 12 defense-critical raw materials, including gallium, germanium, graphite, lithium, rare earth elements and tungsten, warning that disruptions could affect the production of essential equipment.

Clean energy magnifies the issue through scale. Batteries, electricity grids, wind turbines, solar systems and electric vehicles require vast quantities of copper, lithium, graphite, nickel and rare earths.

And that is where the significance of these seemingly small markets becomes clearer: enormous amounts of economic activity can depend on relatively small quantities of material flowing through highly concentrated supply chains.

That is what makes these minerals strategic. Their importance lies not simply in what they cost, but in the much larger industries that cannot function without them.

A relatively small disruption upstream can reverberate through industries worth billions downstream.