Critical material supply chains are becoming more exposed to geopolitical risks and disruptions, industry leaders said at the Resourcing Tomorrow conference this week in London.
"The ever-changing geopolitical environment is going to have a negative impact on securing minerals for the energy transition," Rio Tinto chairman Dominic Barton said.
The growing competition between China and the US in matters of trade was identified as one of the main risks by private equity investor Fiore Group's chief officer Frank Giustra. China earlier this year restricted exports of critical minerals crucial for electrification, such as graphite, gallium and germanium.
Latin American countries are also imposing stricter regulations, such as mining tax reforms introduced in Chile and Peru, Giustra said.
There has been a fivefold increase in export controls on critical minerals in the past 15 years, according to data from JP Morgan.
The risk of resource nationalism could exacerbate an already significant copper deficit, speakers said.
Meanwhile, relatively new market participants are emerging in the mining industry, who are well-positioned to gain prominence in the next few years. "The Middle East is operating well in the east and the west. We can see it in Saudi Arabia, which is co-operating with China," Giustra said.
Geopolitical dynamics are likely to influence trade flows and supply chains. Russia's increased influence in African countries, for example, could alter trade patterns with the west.
In an increasingly multipolar landscape, the use of currencies other than the US dollar to settle deals and trade agreements is on the rise, with fresh talks about so-called de-dollarisation.
"We are seeing new bilateral trade agreements between countries to bypass the US middleman," Giustra said.
The Reserve Bank of India and the Central Bank of UAE, for example, recently signed an agreement to use local currencies in bilateral trade.
"Since the war in Ukraine started, the US has been exporting inflation to low-income countries, and the global south has been feeling the impact," he added. "We will see more of this while China is trying to internationalise the yuan."
Policymakers and private companies should work to diversify and build more resilient global supply chains, as well as co-operate with like-minded partners in an international environment that is constantly changing, delegates were told.
