The scramble for critical minerals has handed resource-rich Global South countries their strongest negotiating position in decades. Indonesia's nickel ore export ban, Chile's push for state control of its strategic lithium salt flats, and the DRC's 2025 cobalt export ban and quotas all point to the same question: should these nations use their geological leverage to force industrialization, or accept pragmatic partnerships that keep the minerals flowing?
The strategic fork
2.2x
Lithium Demand Growth, 2024–2030
Lithium demand rises from 205 kt in 2024 to 455 kt in 2030 in the IEA's Stated Policies Scenario, with clean energy technologies accounting for most of the increase (Global Critical Minerals Outlook 2025)
70%+
China's Processing Share
China's share of refining in 2024: about 70% of lithium chemicals, 78% of cobalt, and over 90% of rare earths (IEA, Global Critical Minerals Outlook 2025)
~45%
Indonesia's Refined Nickel Share
Indonesia's share of global refined nickel production in 2024, after its 2020 raw ore export ban; Chinese companies own most of the refining assets (IEA, Global Critical Minerals Outlook 2025)
~73%
DRC Cobalt Share
The DRC's estimated share of world mined cobalt production in 2025 (USGS, February 2026), giving it immense leverage
Two Paths Forward
Resource Nationalism
Demand domestic processing, play US and China against each other, mandate local ownership stakes
- ●Forces technology transfer and domestic industrialization
- ●Maximizes long-term value capture from finite mineral deposits
- ●Creates manufacturing jobs and builds industrial capacity
- ●Leverages the urgency of the energy transition while demand is at peak desperation
Risk
Delays development timelines as foreign investors hesitate or withdraw. Risk of capital flight to countries with friendlier terms. Requires state capacity to regulate complex industries effectively. Environmental costs of rapid, state-directed industrialization can be severe.
Pragmatic Partnerships
Prioritize extraction efficiency, choose partners by reliability and investment, accept foreign ownership in exchange for technology transfer
- ●Faster revenue generation and employment from accelerated extraction
- ●Attracts best-in-class operators with proven processing technology
- ●Reduces political risk for foreign investors, ensuring steady capital flow
- ●Avoids the institutional capacity constraints of state-directed industrialization
Risk
Risk of perpetual commodity dependence without genuine industrial upgrading. Foreign partners may transfer minimal technology while extracting maximum value. Locks in long-term contracts that limit future renegotiation leverage. Environmental and labor standards may be set by foreign operators, not host nations.
Critical Minerals Leverage: Key Moments
January 2020
Indonesia Bans Raw Nickel Exports
Indonesia implements a full ban on raw nickel ore exports, forcing foreign miners to invest in domestic smelting and processing capacity. Chinese companies go on to build most of the smelting and refining capacity that follows.
April 2023
Chile Announces National Lithium Strategy
President Boric announces a strategy requiring state majority control of lithium production in salt flats deemed strategic, signaling a shift toward resource nationalism in the world's largest lithium reserve holder.
June 2023
Indonesia Extends Its Export Ban to Bauxite
Emboldened by the nickel ban's results, Indonesia bans exports of bauxite ore, the raw material for aluminium, to push domestic refining. The government had announced the ban in December 2022.
March 2024
Chile Names Its Strategic Salt Flats
Chile designates the Atacama and Maricunga salt flats as strategic, with the state holding a majority stake, and invites private companies to express interest in 26 other salt flats.
February 2025
DRC Suspends Cobalt Exports
Facing a cobalt glut and prices at their lowest in over a decade, the DRC, the world's largest cobalt producer, suspends cobalt exports. In October 2025 it replaces the ban with export quotas capped at 96,600 tonnes a year for 2026 and 2027, intensifying the resource nationalism playbook.
2026 and beyond
The Leverage Window Narrows?
Advances in battery recycling, sodium-ion alternatives, and deep-sea mining could begin to erode the geological concentration that gives Global South nations their current bargaining power.
Signal
- ●EV adoption keeps growing: global electric car sales topped 17 million in 2024, more than 20% of new cars sold (IEA, Global EV Outlook 2025)
- ●US and EU legislation explicitly incentivizes non-Chinese mineral supply chains, creating durable demand for alternative sources
- ●Since its nickel ore export ban, Indonesia has become the world's largest nickel refiner, with almost 45% of global output in 2024 (IEA) — the model can work
- ●China's dominance in mineral refining (about 70% of lithium chemicals, 78% of cobalt, and over 90% of rare earths in 2024, per the IEA) creates genuine supply chain vulnerability that Western governments must address
- ●Climate policy commitments are legally binding in many jurisdictions, making the energy transition demand structural rather than cyclical
Noise
- ●Battery technology will eliminate the need for these minerals within five years — sodium-ion and solid-state remain far from scale
- ●Deep-sea mining will flood the market with cheap alternatives — regulatory and environmental barriers remain enormous
- ●Western reshoring will fully replace Global South supply — the geology, cost structures, and timelines make this impractical
- ●Resource nationalism always fails — the historical record is far more nuanced, with clear successes alongside failures
- ●China will simply find substitutes and move on — most critical minerals have no viable near-term substitutes at scale
The 2025-2026 window represents a unique convergence of forces. The energy transition is accelerating, US-China competition for supply chain security is intensifying, and the geological concentration of critical minerals gives a handful of Global South nations leverage they have never had before. Indonesia has already demonstrated that export bans can force downstream investment. Chile is testing whether state partnership requirements deter or attract capital. The DRC is testing whether contract renegotiation and export quotas translate into genuine industrialization or merely higher prices and royalty checks. Each of these experiments is being watched by dozens of other mineral-rich nations — from Zimbabwe's lithium to the Philippines' nickel to Argentina's lithium triangle — all asking the same question: how hard should we push? The answer will shape whether the energy transition creates a new class of industrialized economies or simply replaces oil dependence with mineral dependence, leaving the same countries at the bottom of the value chain.
Institutional Capacity Gaps
Regulating complex mining and processing industries requires technical expertise, legal frameworks, and enforcement capacity that many resource-rich nations are still building. Without these, export bans and ownership mandates become difficult to implement effectively.
Infrastructure Deficits
Domestic processing requires reliable electricity, water, transportation, and port infrastructure. In the DRC, for example, mineral-rich provinces lack the basic infrastructure needed to support smelters and refineries, forcing continued reliance on raw ore exports.
Environmental Trade-offs
Indonesia's nickel processing boom has come with significant environmental costs — deforestation, water pollution, and carbon emissions from coal-powered smelters. Balancing industrialization with environmental sustainability is a genuine constraint, not just activist rhetoric.
Corruption and Governance Risks
The resource curse is real. Without transparent governance, mineral wealth can fuel elite capture rather than broad-based development. Contract renegotiations and state ownership mandates create opportunities for rent-seeking that undermine the nationalist rationale.
Geopolitical Retaliation Risk
Aggressive resource nationalism can provoke trade retaliation, diplomatic pressure, or support for regime change. Smaller nations in particular must weigh the benefits of hard bargaining against the risks of alienating powerful trading partners.
Inside the War Room
Jakarta's Nickel Gambit: The 2020 Export Ban Decision
Indonesian President Joko Widodo bet that the world's hunger for battery-grade nickel would force processing investment to come to Indonesia, and banned raw nickel ore exports from January 2020. Chinese companies built most of the smelters and refineries that followed, and by 2024 Indonesia was producing almost 45% of the world's refined nickel (IEA). The gambit became the template for resource nationalism in the critical minerals era.
Boric's Lithium Announcement: Sovereignty vs. Speed
When Chilean President Gabriel Boric announced the national lithium strategy in April 2023, critics warned that its state-control requirements could deter investment. The first big test came in the Salar de Atacama: in December 2025, state miner Codelco and SQM formed NovaAndino Litio, a joint venture with majority state participation that covers lithium production there through 2060. Whether the model attracts new capital to Chile's other salt flats is still being tested.
The DRC Standoff: Contract Renegotiation and Export Controls as Leverage
The DRC's repeated renegotiation of mining contracts — particularly with Chinese operators in the copper-cobalt belt — has tested the limits of sovereign leverage. In 2025 it reached for a blunter tool. It suspended cobalt exports in February, then on October 16 replaced the ban with export quotas: 18,125 tonnes for the rest of 2025 and up to 96,600 tonnes a year in 2026 and 2027 (USGS). The quotas show how far a dominant producer can push, and how much it depends on enforcing the rules it sets.
The US Minerals Security Partnership: A Western Counter-Offer
Launched by the US State Department in June 2022, the US-led Minerals Security Partnership offers Global South nations an alternative to Chinese investment — financing, market access, and technology transfer in exchange for supply commitments. The partnership gives resource-rich nations a second bidder at the table, increasing their leverage but also forcing them to navigate great-power politics with limited margin for error.
“The critical minerals leverage window is real but finite. Global South nations hold genuine geological advantages that the energy transition has made strategically vital. Indonesia's nickel export ban proves the model can work — but it also reveals the costs: environmental damage, dependence on Chinese capital, and questions about the depth of technology transfer. The nations that will benefit most are those that combine geological leverage with institutional capacity, transparent governance, and strategic patience. Resource nationalism without state capacity is just rent-seeking with better branding.”
Active Strategic Fork — High Stakes, Uncertain Duration
The OPEC Analogy — and Its Limits
The comparison between today's critical minerals leverage and OPEC's 1970s oil power is tempting but imprecise. Oil exporters had a single commodity with no near-term substitutes and a cartel structure to coordinate supply. Critical minerals are diverse (lithium, cobalt, nickel, rare earths each have different geographies and market dynamics), coordination among producing nations is nascent at best, and substitution timelines are measured in years, not decades. The lesson: individual nations can extract concessions, but the dream of a 'minerals OPEC' that collectively dictates terms to the industrialized world remains far more aspiration than reality.
The decisive moment
The global energy transition has created an unprecedented shift in geopolitical leverage. The same countries that spent decades as commodity exporters — shipping raw materials to industrialized nations at thin margins — now control the inputs that every electric vehicle, battery, and wind turbine requires. Lithium, cobalt, nickel, manganese, and rare earth elements have become the new oil, and the nations sitting on top of these deposits are reassessing their bargaining position.
Indonesia set the template in January 2020 when it banned the export of raw nickel ore, forcing miners to process the metal domestically or lose access entirely. The gambit worked — at least partially. Chinese companies built smelters and refineries on Indonesian soil, and by 2024 Indonesia produced almost 45% of the world's refined nickel, most of it in Chinese-owned plants, according to the IEA's Global Critical Minerals Outlook 2025. The country has shifted from raw ore exporter toward industrial processor. But the environmental costs have been severe, and questions remain about whether the technology transfer has been genuine or superficial.
Chile, which holds the world's largest lithium reserves (9.2 million tonnes, according to the USGS in February 2026), has taken a different but related approach. President Gabriel Boric's April 2023 national lithium strategy requires state majority control of lithium production in salt flats the government deems strategic. In March 2024 the government named the Atacama and Maricunga salt flats as strategic and opened 26 others to private companies, a sign that even market-friendly nations are rethinking the terms of mineral extraction. The DRC, which mined an estimated 73% of the world's cobalt in 2025 (USGS), has repeatedly renegotiated mining contracts with Chinese firms. In 2025 it went further: it suspended cobalt exports in February and, in October, replaced the ban with export quotas capped at 96,600 tonnes a year for 2026 and 2027.
The backdrop to all of this is the intensifying US-China competition for critical mineral supply chains. The US Inflation Reduction Act (2022) and the EU Critical Raw Materials Act (2024) created incentives for 'friendshoring' mineral processing away from China, although the US ended the IRA's clean-vehicle tax credits, including the consumer credit tied to critical-mineral sourcing, for vehicles acquired after September 30, 2025. This gives Global South nations a rare opportunity to play both sides — offering preferential access to whichever great power offers the best terms for domestic industrialization. But the window may not stay open forever. Synthetic alternatives, deep-sea mining, and recycling technologies could erode the leverage that geology currently provides.
The strategic fork facing these nations is not abstract — it is playing out in real time across boardrooms, ministries, and international summits. The choices made in 2025 and 2026 will determine whether the energy transition replicates the extractive patterns of the fossil fuel era or creates a genuinely new industrial geography.
Apply the lessons
A framework for assessing how Global South countries can convert geological advantage into lasting industrial development during the energy transition.
Audit your geological leverage
Map exactly which minerals you control, your global market share, and the timeline before substitutes or alternative sources become viable. Your leverage has an expiration date — know it.
Build institutional capacity before imposing mandates
Export bans and ownership requirements only work if you can enforce them and manage the downstream industries they create. Invest in regulatory frameworks, technical expertise, and anti-corruption mechanisms first.
Create competitive tension among bidders
The strongest negotiating position comes from having multiple credible partners competing for access. Engage both US-aligned and Chinese capital simultaneously, using each as leverage against the other.
Define non-negotiable technology transfer benchmarks
Distinguish between genuine technology transfer (local engineers running processing plants, domestic R&D capacity) and superficial compliance (foreign-run operations with local labor). Build milestone-based requirements into every partnership agreement.
Frequently asked questions
What are critical minerals and why are they strategically important?+
How is Indonesia using its nickel reserves as leverage?+
What is the risk that these minerals lose their strategic value?+
Could Global South mineral-rich nations form an OPEC-like cartel?+
Your country is rich in the minerals the energy transition depends on. For decades you exported them raw and cheap.
How hard do you push for local value capture now?
Europe's rearmament trade-off
A buyer-side view of the same resource squeeze.
More Strategic Forks
Other consequential decisions worth studying.
The Global South AI Adoption Fast Lane
While Europe builds regulatory frameworks and the US debates safety guardrails, India and Southeast Asia are pursuing aggressive AI deployment through fast lanes for innovation. Microsoft pledged in February 2024 to give 2 million people in India AI skills by 2025, and in January 2025 raised the goal to 10 million people by 2030. Abu Dhabi's Government Digital Strategy 2025–2027, announced in January 2025, aims to make it the world's first fully AI-native government by 2027. Organizations focused exclusively on Western markets may find themselves outpaced by competitors building capabilities in the world's fastest-growing regions.
Current ForksThe Autonomous Vehicle Liability Threshold
Autonomous vehicle companies are racing toward mass deployment with liability frameworks still fragmented and insurance models untested. In August 2025, a Miami jury held Tesla partly liable for a fatal crash involving its Autopilot driver-assistance system. The industry's response to its first landmark fatality case against a fully driverless service will set precedent for decades — and the choice between aggressive legal defense and collaborative regulatory engagement could determine whether autonomous driving reaches mainstream adoption or stalls in legal limbo.
Current ForksThe Public Market AI Monetization Reckoning
The largest technology companies are pouring hundreds of billions into AI infrastructure while adoption metrics tell a sobering story. In PwC's 2026 Global CEO Survey, published in January 2026, only 22% of CEOs said they apply AI to a large or very large extent in demand generation, and 19% in their products, services and experiences. In PwC's 2025 workforce survey, just 14% of workers used generative AI daily. With Gartner forecasting $2.7 trillion of worldwide AI spending in 2026 (September 2026), the question facing every public company board is not whether to invest, but how to communicate the inevitable J-curve to investors who demand quarterly results.
Current ForksThe Sovereign AI Infrastructure Decision
Europe's regulatory convergence — NIS 2, the Cyber Resilience Act, and the AI Act, alongside the Commission's Cloud Sovereignty Framework for cloud procurement — is forcing the world's largest cloud providers into a binary infrastructure decision. Build sovereign-stack variants that satisfy every requirement but fragment your platform and erode margins, or maintain global unity with compliance add-ons and risk being locked out of government and regulated-industry contracts. The clock is ticking: member states had to transpose NIS 2 by 17 October 2024, and under Regulation (EU) 2026/1744 the AI Act's high-risk obligations now apply from 2 December 2027 (2 August 2028 for AI in regulated products).
Current ForksEurope's Rearmament vs. Industrial Policy Trade-off
Europe faces a major industrial policy fork. Defense spending commitments are surging past 2% of GDP, and at the June 2025 Hague summit NATO allies agreed a target of 5% of GDP by 2035 (3.5% for core defense plus 1.5% for related spending). But every euro allocated to tank production is a euro not spent on battery gigafactories or hydrogen infrastructure. For companies like Rheinmetall, BAE Systems, and Airbus Defence, the strategic question is pivotal: which bet defines the next decade?
Current ForksThe Continuous Planning Transformation
The annual, static budget is obsolete before the ink dries. Forward-thinking finance organizations are moving to continuous planning — shifting from describing the past to prescribing the future. Yet in FP&A Trends' 2024 survey, 57% of organizations still took one to three months to prepare a budget, and 53% needed more than five days to produce a forecast. The question isn't whether continuous planning is better. It's whether organizations can survive the cultural upheaval required to get there.
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Sources & further reading
- International Energy Agency (2025). Global Critical Minerals Outlook 2025. IEA.
- International Energy Agency (2025). Global EV Outlook 2025. IEA.
- U.S. Geological Survey (2026). Mineral Commodity Summaries 2026: Cobalt. U.S. Geological Survey.
- U.S. Geological Survey (2026). Mineral Commodity Summaries 2026: Lithium. U.S. Geological Survey.
- U.S. Geological Survey (2026). Mineral Commodity Summaries 2026: Nickel. U.S. Geological Survey.
- U.S. Geological Survey (2025). 2023 Minerals Yearbook: Indonesia [Advance Release]. U.S. Geological Survey.
- Hunton Andrews Kurth (2023). Chilean Government Releases its National Lithium Strategy. Hunton Andrews Kurth.
- Convergencia Latina (2024). Chile maintains control of strategic salt flats in Atacama and Maricunga and opens 26 to private companies. Convergencia Latina.
- Codelco (2025). Codelco and SQM form NovaAndino Litio, the joint venture for the development of lithium in the Salar de Atacama. Codelco.
- Mining Weekly (2025). Congo suspends cobalt exports for four months amid oversupply. Mining Weekly.
- Will Owen (2022). US joins key partner countries in strengthening critical mineral supply chains. Global Mining Review.
- Clifford Chance (2025). One Big Beautiful Bill Act: Notable Terminations of Tax Credits for Solar, Wind, Hydrogen and Clean Vehicles. Clifford Chance.
- Juan Carlos Jobet, Tom Moerenhout and Diego Rivera Rivota (2024). Chile's State-Centric Lithium Policy May Deter Investment. Center on Global Energy Policy, Columbia University SIPA.
Cite this analysis
Stratrix. (2026). The Global South Critical Minerals Bargain. Strategic Forks. Retrieved from https://www.stratrix.com/strategic-forks/global-south-critical-minerals
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