{"id":28044,"date":"2026-11-04T21:23:34","date_gmt":"2026-11-04T21:23:34","guid":{"rendered":"https:\/\/globalnewstoday.uk\/index.php\/2026\/11\/04\/the-missing-critical-minerals-investment-foreign-affairs\/"},"modified":"2026-11-04T21:23:34","modified_gmt":"2026-11-04T21:23:34","slug":"the-missing-critical-minerals-investment-foreign-affairs","status":"publish","type":"post","link":"https:\/\/globalnewstoday.uk\/index.php\/2026\/11\/04\/the-missing-critical-minerals-investment-foreign-affairs\/","title":{"rendered":"The Missing Critical Minerals Investment – Foreign Affairs"},"content":{"rendered":"

Since its founding in 1922, Foreign Affairs<\/em> has been the leading forum for serious discussion of American foreign policy and global affairs. The magazine has featured contributions from many leading international affairs experts.
Tom Moerenhout<\/span> is a Professor at Columbia University\u2019s School of Public and International Affairs, Director of Critical Materials at Columbia University\u2019s Center on Global Energy Policy, and Executive Director at the Geneva Platform for Resilient Value Chains.
Kevin Brunelli<\/span> is a Nonresident Fellow at Columbia University\u2019s Center on Global Energy Policy and previously served in the Office of Critical Minerals and Energy Supply Chains at the U.S. Department of State.
To Catch Up to China, America and Its Allies Must Dig<\/a>
Tom Moerenhout<\/a> and Kevin Brunelli<\/a>
The United States and its allies are finally taking supply chains for critical minerals seriously. China has spent the last three decades building a dominant share of global mineral production, and the export controls Beijing has introduced periodically since 2023 have made clear just how dangerous it is for other countries to rely on China for access to materials that are essential components of semiconductors, defense technologies, and automobiles.
Washington and European capitals are now trying to minimize their exposure. Alongside private firms, these governments have begun investing in both upstream industries including mines, refineries, and recycling infrastructure and downstream industries such as magnets and batteries. The bulk of their efforts so far have focused on mines already in operation or close to it and on refining. It is true that the United States<\/a> and Europe do not have sufficient facilities to process raw ore into specialized chemicals or refined materials and that building more refining facilities will help reduce their reliance on China and alleviate immediate supply chain concerns.
But this is a temporary fix. Refining facilities are valuable only if they have a steady, long-term supply of raw materials. That, in turn, requires new mines, especially as advanced industries demand ever more minerals. Because building a mine takes roughly 20 years, ensuring a long-term supply of minerals requires investing in new mines now. China<\/a>, which is committed to maintaining its supply chain dominance, has been willing to allocate substantial capital to such ventures. Japan has, too, ever since China blocked exports of critical minerals to the country amid a dispute over the Senkaku Islands (known in China as the Diaoyu Islands) in 2010, which pushed Tokyo to start the long process of disentangling its own supply chains. But Japan still has a long way to go; after 15 years of investing, the country has reduced its dependence on China for rare earths from about 90 percent to between 65 and 70 percent\u2014not nearly enough to supply its own needs, much less those of its allies.
In short, investing in refining is necessary but insufficient. To avoid future supply chain vulnerabilities, the United States and its allies, especially those in the G-7, must also start building a pipeline of new mines. These investments are long bets, and they are risky. But when successful, they reap high rewards.
The United States and <\/strong>its allies significantly outperform China in mineral exploration. Australian and Canadian firms alone account for roughly one-third of global exploration spending. But the vast majority of geological prospects never become operating mines. This is not for lack of financing in prospecting but because of the many financial disincentives and risks that appear once a mining project moves forward.
The initial stages of mining development rely chiefly on a unique ecosystem of mining companies called \u201cjuniors,\u201d so called because they have a small market cap, focus exclusively on one or a few projects, and are nowhere large enough to list on major stock exchanges. Most of them list in Australia or Canada and concentrate on the initial high-risk exploration stages. Geological uncertainty makes betting on junior ventures extraordinarily risky, but if a mineral <\/strong>deposit proves to have significant reserves, the junior can sell the project or bring in a new partner, and that payout is large.
Yet in the next stages, investors tend to lose patience or run out of capital. Although initial prospecting is relatively cheap, subsequent feasibility studies that estimate a deposit\u2019s size, engineering needs, costs, and expected returns can easily run into the tens of millions of dollars, in addition to the costs of drilling, engineering, permitting, and development planning. Commercial lenders stay away because these projects have no immediate revenue, no assets to offer as collateral, and no guarantees they will even be viable. The risk, in short, is too high to take for uncertain returns. Large mining companies also avoid these projects because they face pressure from shareholders to provide maximum returns. Even as demand for minerals has risen, the share of revenue that major mining companies have reinvested in new development has stayed flat.
Without outside financing, juniors cannot complete the studies needed to attract additional financing for construction, even if they have found a promising deposit. As single-asset companies, they have no other cash flow or assets to offer as collateral for additional loans. This moment is often referred to as the \u201cvalley of death.\u201d Many companies looking for a way out of this predicament have turned to one reliable source of investment: China. Chinese companies are much more willing to take on this type of risk and provide the necessary capital to advance mining projects, and they are often the only viable option for juniors. Thus, China\u2019s dominance in global supply chains relies on Western companies\u2019 exploration. It endures not because China offers more competitive terms but because at a key financing stage, it is the only game in town.
China has been expanding its supply pipeline for critical minerals for decades. In 2025, it spent a record $32 billion on metals and mining projects through its Belt and Road Initiative<\/a>, breaking the previous year\u2019s record of $21 billion. Chinese firms are also willing to invest in equity, buying ownership stakes in companies that come with no guaranteed returns. Additional spending takes the form of resources-for-infrastructure deals, by which China funds infrastructure such as ports, energy facilities, and railways in mineral-rich countries in exchange for a share in the profits of mining projects\u2014which Chinese companies and state banks may also help finance. By investing in a broad portfolio of mineral projects across several countries, Chinese firms can let the profits of those that succeed cover the losses of those that fail.
Apart from capital, the most important part of China\u2019s mining strategy is know-how. Because failure is so common, the ability to identify deposits with the highest potential to deliver is crucial. Beijing relies on specialized state-owned enterprises, geological firms, private companies, and government officials to vet projects and work with host governments to secure permits, infrastructure, and delivery. The only G-7 country that maintains a comparable on-the-ground presence for mining projects is Japan, in countries such as Australia, Canada, Peru, and Uzbekistan. These projects are intended to secure critical minerals that can support Japan\u2019s industries, but they are currently insufficient to meet all of Japan\u2019s production needs, let alone broader allied needs.
The disparity between China\u2019s mining investments and those of the United States and its allies is most evident in Africa, home to some of the largest untapped mineral resources. Whereas the United States invested about $300 million in critical mineral projects on the continent in 2023, China invested about $8 billion to $10 billion. Washington has recognized the need to close this gap, but it still has a long way to go.
In the Democratic Republic of the Congo, a particular focus of the Trump administration<\/a>, Chinese companies control about 70 percent of cobalt and copper mines. Between 2008 and 2020, Chinese banks and companies extended over $9 billion in credit for mine development and operations in Congo, in addition to $3 billion in infrastructure loans from the Export-Import Bank of China. The United States and other G-7 countries had the opportunity to take part in these investments but judged the projects to be too risky. In 2015, for example, the Canadian-listed mining company Ivanhoe Mines sought funding for its Kamoa-Kakula copper project in Congo. With no Western investors willing to take on the risk, the Chinese firm Zijin Mining acquired an ownership stake. Today, Kamoa-Kakula is on track to become one of the largest copper mines in the world. Meanwhile, in 2016 and 2020, the only major American mining company active in Congo sold its stakes in two substantial copper-cobalt deposits, its only remaining stakes in the country, to a Chinese mining company.
The owners of a mine control where its minerals eventually go. When Chinese firms own a mine, the output flows either to their refineries or downstream manufacturers in China. The Chinese battery giant CATL, for example, has an ownership stake in the Kisanfu mine in Congo, where it secures a steady supply of copper and cobalt for its batteries. U.S. automakers and allied battery producers have also invested in some projects, but none to the same degree\u2014even still, much of that material flows through China. The concentration of this refined material in China gives Beijing ever-greater market power and the ability to weaponize it.
In theory, the United States and its allies have the means of financing their own pipeline of future mining projects. In 2024, two Toronto-based stock exchanges hosted nearly 1,100 publicly listed mining companies, 40 percent of the global total. These companies account for roughly one-third of the world\u2019s total mining equity capital raised over the last five years. About half of the listed companies\u2019 projects were based in Canada. The Australian Stock Exchange is another key exchange, with about 850 companies listed in 2024 for mining development.
But these companies are facing pressures that discourage investment in promising projects. The world\u2019s most accessible mineral deposits have already been tapped, so potential new deposits are often located in more complicated geological environments, making the early stages of exploration more difficult and costly. Moving from exploration to production is also taking more time, as increased social and environmental requirements draw out permitting processes. This lengthening timeline lowers private investors\u2019 appetite for risk because they have to wait longer for their investments to start generating returns. At the same time, Chinese overproduction of critical minerals has depressed prices for key commodities. Despite strong signals that demand for the minerals will continue to increase, these low prices discourage new players from entering the game and weaken investors\u2019 incentives to help those already in it.
U.S. and allied governments therefore need to draw in substantial new investment. The United States has made a start by taking equity stakes in <\/strong>domestic and international mining companies and expanding loans to them. Official announcements claim that these investments total around $50 billion, although the value of the deals that have been signed falls closer to $9 billion, and the money actually moving adds up to around $4 billion. Most of this money does not go to the projects languishing in the valley of death. Instead, the projects getting funded are those that are closer to production, because they can help tackle immediate supply risks.<\/p>\n

This is a good start, but ventures that remain at early stages still need funding, and private investors are still wary of mining projects. Since 2025, the few institutional investors that have gotten involved tended to do so after the U.S. government announced an equity stake or loan to back a project. Although such caution is not new, relying on government signals and public investment sets up a perverse incentive for private companies not to invest in the absence of public support, which is exactly what governments want to avoid.
To really pull in private capital for exploration and mine development, the United States and the European Union should take a page from Canada\u2019s book. The Canadian government offers tax credits to companies engaged in mineral exploration, and its \u201cflow-through shares\u201d system helps mining companies finance exploration and development by offering tax incentives to investors. If the rest of the G-7 can establish this kind of financial architecture, far more exploration capital would flow to critical mineral projects. And if member countries link their systems by letting investors claim tax benefits for exploration anywhere in the G-7, they could build the large, shared pool of exploration and development capital needed to support projects through to construction. In addition, G-7 countries must remove barriers for large institutional investors to enter the mining sector\u2014primarily by reforming their tax codes, which currently disincentivize tax-exempt investors, such as pension funds, endowments, and foundations, from investing in mining projects because returns on such investments can be taxed as income.
Finally, when the incentives for private investment still do not line up for certain projects, G-7 countries should use public capital to directly help mining companies escape the valley of death. To do this, the United States, Japan, and European countries should set up a joint facility to pool financing for feasibility studies, which are particularly difficult to raise private funding for, establishing a broad portfolio so that the losses from any failures are covered by the winners. This pooled fund would allocate grants to promising projects in exchange for equity in the project or a royalty once the mine goes into production. Many projects would still fail, but with a dedicated, well-staffed facility, the quality of investments would likely improve\u2014as they have for China, which takes a similar portfolio approach to early-stage mining. And the benefits to both investors and national interests would far outweigh the lost capital.
Today\u2019s chokepoints for critical minerals sit mostly at the processing or refining stage, but future threats to the minerals needed for manufacturing, energy, artificial intelligence, and defense technology will be at the mines. G-7 countries have the markets and the policy tools to build a pipeline of secure mining projects and prevent the next economic emergency. Investment in refining facilities means little if the United States and its allies have no minerals to feed them a decade from now. The only choice, then, is to commit to financing new mining projects now.
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Since its founding in 1922, Foreign Affairs has been the leading forum for serious discussion of American foreign policy and global affairs. The magazine has featured contributions from many leading international affairs experts.Tom Moerenhout is a Professor at Columbia University\u2019s School of Public and International Affairs, Director of Critical Materials at Columbia University\u2019s Center on […]<\/p>\n","protected":false},"author":1,"featured_media":28045,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-28044","post","type-post","status-publish","format-standard","has-post-thumbnail","category-world"],"_links":{"self":[{"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/posts\/28044","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/comments?post=28044"}],"version-history":[{"count":0,"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/posts\/28044\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/media\/28045"}],"wp:attachment":[{"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/media?parent=28044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/categories?post=28044"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/globalnewstoday.uk\/index.php\/wp-json\/wp\/v2\/tags?post=28044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}