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December 22, 2025 - This year marked a significant change for the global mining industry as it navigated the impact of growing geopolitical tensions on commodity markets while racing to meet calls to decarbonise operations. Eagle-eyed on critical minerals essential to the energy transition, including copper, lithium and rare earths, countries ramped up efforts this year to secure supply and strengthen supply chains against geopolitical risk. The West is keen to challenge China’s market dominance through protectionist policies, as well as strategic alliances involving foreign minerals. As the demand for global critical minerals soars, mining operators are also increasingly using transformative technologies to optimise productivity and address challenges across the value chain. US-China tensions for critical mineralsThe mining industry has been subject to the fallout of ongoing macroeconomic and geopolitical shifts throughout 2025, with trade relations reshaping supply dynamics as countries compete for transition minerals. China is the gatekeeper of some of the world’s largest mineral supplies. It dominates the production of over 15 critical minerals, many of which are critical to the energy transition. For some, such as gallium and magnesium, China's share of global production is so dominant (98% and 95%, respectively) that there is virtually no competition. The Asian nation also accounts for 40% of the globe’s rare earth reserves, including neodymium, dysprosium, praseodymium and terbium. Its influence is even greater in separation and refining, representing about 91% of global capabilities. Recognising the risks associated with over-reliance on China, countries have been rushing to diversify their supply chains this year. The US led in this effort, which unravelled into a full-blown trade war. What began with Trump announcing a 10% tariff on Chinese imports in February and China retaliating with 10%-15% tariffs on certain US goods, alongside export controls on 25 rare earths, spiralled intoa wave of stricter tariffs which culminated in a 145% tariff rate on Chinese goods from the US and a 125% counter rate from China. When the US showed no signs of backing out, China expanded its export restrictions to include not only more rare earths but also lithium-ion batteries and graphite anode materials – all critical for the energy transition. “With China’s strong control over rare earths and other key minerals, its export restrictions this year exposed the dependence of global automakers, electronics manufacturers and energy producers on Chinese capacity,” says Gayathri Siripurapu, associate project manager at MINE’s parent company, GlobalData. As the year draws to a close, the US and China have de-escalated their tensions, with the US reducing the overall tariff on Chinese goods to around 47% and China suspending export bans and issuing new licenses. However, Siripurapu believes that there’s further potential for trade-related conflict, with the US–China rivalry “expected to continue to shape most supply chain disruptions in 2026”. The US represents countries across the world that have sought to not only invest more in domestic production but also establish new trade partners to overcome dependence on Chinese minerals. For instance, the US and another industry leader, Australia, signed a rare earths deal in October 2025 to build on existing investments and policies to establish a competitive and diversified minerals market. A key component of the deal involves both countries identifying priority projects to secure supply chains. The US and Australia have agreed to finance $1bn (A$1.54bn) for projects in both countries within six months. The US has also sought investment opportunities in Africa while Australia has looked towards Brazil and Indonesia. Rebecca Campbell, global head of mining and metals at White & Case, says that other critical mineral-producing nations such as Indonesia, Chile and many African countries are becoming much more assertive about value capture, pushing for local processing and higher participation from government to build up their industries as a Chinese alternative. Value capture is the process of recovering some or all the value public infrastructure creates for private landowners. Campbell says: “Add conflicts in the Middle East and Ukraine, raising the cost and complexity of shipping, and you have a world where supply chains are no longer neutral, but increasingly shaped by political alignment.” Siripurapu adds that mining and downstream industries are prioritising security of supply over lowest-cost sourcing, prompting diversification into new regions, long-term offtake agreements and investments in regional refining capacity. Copper, coal and precious metals reflect world’s shift in focusAs the wider energy industry made further headway in its decarbonisation ambitions this year, copper demand remains strong, as another critically important material for the energy transition, but it is uncertain whether supply can keep up. Global copper mine output is projected to grow by 2.1% by the end of 2025 to 23.4 million tonnes (mt), up from 22.9mt in 2024. The modest growth is primarily due to production declines in key regions. Copper production experienced several hits this year, including a mud rush at Freeport-McMoRan’s Grasberg block cave mine in Indonesia, which caused seven fatalities, after which it paused operations. Antofagasta also announced in October that production for 2025 would only reach the lower level of its previous forecast due to operational issues such as increasing input costs for diesel and water shortages in Northern Chile. In 2026, production levels are expected recover slightly, with GlobalData expecting a 4.7% growth to 24.5mt mainly from increased output from Chile, Peru, DR Congo, Indonesia and China. However, Siripurapu notes that even with this new output, “the market is still projected to be tight”, and supply risks, including permitting delays, grade declines and social instability, will continue to weigh on the industry. Renewables overtook coal in power generation for the first time, signifying a pivotal point in the energy transition. Coal production only increased marginally this year, with GlobalData projecting a 1.2% output from 2024 to reach 9,333mt. However, it is notable that a net increase in capacity is still forecast over the next decade, which will continue to buoy coal’s role within the power mix. Siripurapu notes that while many advanced economies are moving away from coal and scaling up renewables, the shift is uneven across the world. “Countries like India, China and those in Southeast Asia will continue to rely on coal for affordable, round-the-clock power, which will keep demand and production from falling sharply,” she explains. Looking toward 2026, GlobalData projects that global coal production will continue to increase, though reflecting continued weak output from China, alongside oversupply in Indonesia and the US. |
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