Resource nationalism redraws critical minerals playbook

Resource nationalism is expanding beyond taxes and royalties, forcing lithium and rare earth investors to navigate export controls, production quotas, processing mandates and government intervention as governments compete for control of critical minerals.

The shift is turning critical minerals from a traditional mining business into a geopolitical contest, according to global law firm Gibson Dunn. Recent moves by China, the Democratic Republic of the Congo (DRC), Vietnam, Indonesia, Chile, the European Union and the United States are reshaping supply chains and introducing legal risks that were largely absent during previous commodity cycles. The minerals at the centre of the struggle are essential for electric vehicles, energy storage systems and advanced technologies.

“Resource nationalism has moved well beyond royalty disputes,” the firm said in a recent analysis. “For lithium and the rare earth elements, the legal terrain is shifting as quickly as the political one, and the strategies that protected investors during the last commodities cycle will not be sufficient for the next.”

Governments increasingly view critical minerals as strategic assets tied to economic competitiveness, technological leadership and national security, raising the stakes for producers, investors and manufacturers alike.

Power shift

China provided the clearest recent example when it expanded export controls on rare earth elements, materials and technologies in October 2025. Although Beijing suspended the measures a month later as part of a broader understanding with Washington, the framework remains available for future use. The episode underscored China’s willingness to leverage its dominance in rare earth processing during international negotiations and highlighted the vulnerability of global supply chains to political decisions.

Producer nations are also asserting greater control over mineral resources. The DRC imposed a cobalt export ban in February 2025 before replacing it with production quotas later in the year, disrupting a market that supplies battery manufacturers worldwide. 

Some companies declared force majeure under existing contracts while major producers disagreed over the policy. 

Indonesia’s nickel export ban, in contrast, has attracted billions of dollars in downstream investment and become a model for other resource-rich jurisdictions. Vietnam has tightened state control over rare earth mining and banned exports of raw materials, while Chile continues to favour a state-led approach to lithium development.

The result is a widening divide between producing countries seeking more value from their resources and consuming nations attempting to secure reliable supplies for energy transition technologies, defence systems and advanced manufacturing. The US has elevated critical minerals to a national security priority through strategic reserves and allied supply-chain initiatives, while the European Union’s Critical Raw Materials Act aims to reduce dependence on foreign suppliers and boost domestic processing. Similar policies are emerging across other industrial economies.

Legal risks

The legal implications for investors are growing as governments rely on export restrictions, licensing changes, processing requirements and production quotas rather than outright nationalizations. Such measures can alter project economics and trigger disputes under bilateral investment treaties and free trade agreements. Investors may argue governments have violated expectations created by permits, contracts or public commitments, leading to claims involving indirect expropriation or breaches of fair and equitable treatment standards.

“Many mining and infrastructure agreements negotiated during previous commodity cycles contain stabilization clauses intended to protect investors from regulatory changes,” Gibson Dunn lawyers noted. Governments, however, may increasingly invoke national security, public interest or economic necessity arguments to justify policy shifts.

Export controls can also create disputes over force majeure provisions, while companies operating across multiple jurisdictions face overlapping export-control systems, sanctions regimes and foreign-investment reviews. Joint ventures, strategic investments and offtake agreements are attracting heightened scrutiny as regulators focus on national security and foreign influence.

What’s next

Gibson Dunn said companies should act before disputes arise by reviewing ownership structures, updating contracts to address modern resource-nationalism risks and evaluating political-risk insurance. The firm also recommends reassessing processing locations and supply-chain design, arguing that geography may become as important as geology in determining project success.

The broader trend shows little sign of reversing. Governments across the political spectrum increasingly agree that critical minerals deserve special treatment because of their importance to energy transition technologies, artificial intelligence, advanced manufacturing and defence. While specific policies may evolve, competition for control of strategic resources continues to intensify.

The latest wave of resource nationalism differs from earlier cycles in both scope and sophistication. Export controls, processing mandates, investment restrictions and supply-chain alliances have created a far more complex landscape than traditional tax increases or royalty disputes. For companies operating in lithium, rare earths and other critical minerals, legal strategy is becoming inseparable from business strategy. The winners may be those best equipped to navigate a world where governments increasingly influence who can produce, process and profit from the minerals powering the global economy.