Oil is no longer the only weapon in the room. Whoever controls lithium, cobalt, and rare earth elements controls the next century — and a ferocious, largely invisible war is already being fought over them.
When Oil Was King
For most of the 20th century, the global economy ran on a simple equation: whoever controlled oil, controlled the game. Wars were fought over it, alliances were built around it, and entire foreign policies were shaped by it. The Middle East became the most fought-over piece of real estate on the planet not because of its culture or climate — but because of what sat beneath its sand.
That era is not over. But it is being aggressively interrupted. The energy transition has triggered a new scramble for raw materials — lithium, cobalt, rare earth elements — that makes the old oil wars look almost straightforward. This is no longer environmental policy. This is the new geopolitics of power.
The New Battlefield: Critical Minerals
The numbers tell the story bluntly. Global clean energy investment crossed $2.2 trillion in 2025, with two-thirds of every dollar spent on energy globally already going toward cleaner technologies. But here is what rarely makes headlines: that entire system — solar panels, EV batteries, wind turbines, advanced semiconductors, missile guidance systems — runs on a small group of minerals that are extraordinarily concentrated in the hands of very few countries.
Lithium, cobalt, nickel, graphite, and rare earth elements are strategic infrastructure now — not commodities. The race to secure supply chains is reshaping international relations in ways most people are not yet tracking.
The International Energy Agency projects that demand for these minerals will increase several times over by 2040 just to meet clean energy targets. If you throw in defence manufacturing — which consumes rare earths at industrial scale for everything from radar systems to drone motors — the picture becomes even more acute. A single F-35 fighter jet carries approximately 900 pounds of rare earth materials. A nuclear submarine needs more than 9,000 pounds. There is no version of modern military power that does not depend on these minerals.
China's Kill Switch
China understood this decades before anyone else. Today, it controls approximately 60% of global rare earth mining and over 90% of global processing and refining. It dominates battery-grade graphite, lithium processing, and the manufacturing of the permanent magnets that go into almost every advanced technology product on the planet. This is not an accident — it is the result of deliberate, state-directed industrial policy going back to the 1990s.
And Beijing has now demonstrated, repeatedly, that it is willing to use this dominance as a weapon.
In April 2025, China imposed export restrictions on seven rare earth elements in direct retaliation for US tariffs — covering samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These are not obscure industrial inputs. They are the building blocks of US defence systems. In October 2025, China escalated further, announcing that companies with any affiliation to foreign militaries — including American ones — would be largely denied export licences for rare earths. The Pentagon's own assessment was blunt: US manufacturers have limited capacity to replace Chinese supply quickly, stockpiles would last only months under a full embargo, and the defence industrial base is structurally exposed.
A temporary truce was brokered following the Trump-Xi meeting in November 2025, suspending some restrictions for one year. But the fundamental vulnerability did not go away — it was simply deferred. China proved beyond any reasonable doubt that it holds what analysts at the Center for Strategic and International Studies have called a "kill switch" over Western defence production. That is not a metaphor. It is an operational reality.
Beyond defence, China has also restricted exports of tungsten, antimony, and silver — the latter formally elevated to the same strategic status as rare earths in early 2026. The message is consistent: Beijing will weaponise its supply chain dominance whenever it calculates that the leverage is worth deploying.
America's Catch-Up Sprint
Washington has finally accepted that its decades-long reliance on Chinese mineral processing was a strategic blunder of the first order. The response under the Trump administration has been characteristically aggressive — and, in several respects, transactional to a degree that makes traditional allies uncomfortable.
The most prominent move was the US-Ukraine critical minerals agreement, signed in May 2025. Under the deal, the United States gained preferential access to future revenues from Ukraine's natural resource projects in exchange for continued military and economic support. Ukraine holds significant reserves of titanium, graphite, lithium, and beryllium — 22 of the 34 minerals the European Union classifies as critical. The deal was framed as post-war reconstruction investment, but the underlying logic was straightforward: Trump wanted a non-Chinese supply chain, and Ukraine's mineral wealth was the currency of the negotiation. Ukraine pushed back on the worst terms of earlier drafts — including an initial US demand for $500 billion in mineral revenues as repayment for aid — and ultimately secured a more equitable structure. But the geopolitical subtext was unmistakable: US assistance now comes with a resource dividend attached.
Domestically, the Trump administration invoked Defence Production Act powers to accelerate mining, struck an equity deal with US rare earth miner MP Materials that included government price floors and an offtake guarantee, and pushed through new procurement rules mandating that by January 1, 2027, Chinese-sourced rare earths will be entirely banned from the US defence supply chain. That deadline is less than a year away, and the race to build non-Chinese processing capacity — in Canada, Australia, and the US itself — is in full sprint mode. The aggregate US datacenter capital spending alone is expected to approach $500 billion in 2026, all of it generating demand for precisely these minerals.
India's Window — and Its Risks
India sits in a position that is simultaneously promising and precarious. The country holds significant geological reserves — 482.6 million tonnes of rare earth ore identified by the Geological Survey of India, along with substantial deposits of cobalt, copper, graphite, and nickel. The Reasi lithium deposit in Jammu & Kashmir, estimated at 5.9 million tonnes, completed its advanced exploration phase in early 2026. On paper, India has cards to play.
The Modi government has moved to play them. The National Critical Minerals Mission, launched in January 2025 with a ₹16,300 crore outlay, was upgraded further in the Union Budget 2026-27, which exempted 25 critical minerals from basic customs duty, announced dedicated rare earth corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu, and introduced a ₹7,280 crore PLI scheme for the manufacturing of 6,000 tonnes of rare earth permanent magnets annually. Through KABIL — Khanij Bidesh India Limited — India is also securing overseas assets, with large-scale lithium brine exploration already underway in Argentina and scouting for cobalt assets in Australia and Chile. Just last week, on March 2, India signed a $1.9 billion agreement with Canada's Cameco for uranium supply — shifting away from Russian supply channels toward a G7-embedded partner. India has also been formally inducted into the US-led Mineral Security Partnership, giving it access to allied friend-shoring supply chains.
But here is what India's government tends to gloss over: being a policy signatory and being a processing power are very different things. India currently imports 100% of its lithium, cobalt, and nickel needs. It remains heavily dependent on China for rare earth processing. The domestic ecosystem for battery-grade refining and magnet manufacturing barely exists at scale. The gap between the ambition announced in budget speeches and the infrastructure on the ground is real — and in the critical minerals race, that gap costs time India cannot afford to waste.
The risks cut in two directions. If India moves too slowly, it ends up as a raw material exporter — the same trap that has kept Africa's mining economies structurally weak for decades. If it moves without environmental safeguards, it risks the social and ecological backlash that has derailed mining projects across the Global South. Getting the balance right requires execution discipline that India's policy machinery has not always demonstrated.
What Comes Next
Three developments are worth watching closely through the rest of 2026.
First, the Pentagon deadline. By January 1, 2027, all Chinese-sourced rare earths must be removed from the US defence supply chain — an extraordinarily tight timeline for an industry where new processing facilities take years to build. Whether this becomes a genuine strategic shift or a compliance fiction on paper remains to be seen.
Second, China's truce expiry. The November 2025 agreement suspending export controls runs until November 2026. After that, Beijing retains full discretion to reimpose restrictions. If US-China relations deteriorate further, rare earths remain one of the highest-leverage tools Xi Jinping can deploy short of military action.
Third, AI's minerals appetite. Datacenter construction is consuming copper, silicon, aluminium, and specialty materials at scale. The countries that can supply both the minerals and the clean energy to power these facilities will have outsized leverage in the next decade's technology race — and that is not just a US-China story.
Editorial View · Santhosh Vishwamitra
The New Resource War Has No Armistice Date
Oil defined the 20th century. Critical minerals will define the 21st. The difference is that this fight is not just about fuelling economies — it is about powering weapons, building AI infrastructure, and determining who leads the next era of civilisation.
China played the long game on this and won the first round. It built mines, refineries, and processing capacity for decades while Western governments debated policy papers. The West is now in catch-up mode — and catch-up mode is expensive, slow, and politically messy. Some of the transactional moves we are seeing, from Trump's Ukraine minerals deal to pressure on African nations to choose sides, are the inevitable consequence of that strategic neglect.
India must not repeat that mistake. The National Critical Minerals Mission is a serious step forward — but seriousness on paper is not the same as scale on the ground. India needs to move from policy architecture to actual processing capacity, from MoUs to magnet factories, and from diplomatic memberships to deliverable supply chains. The window to do that from a position of genuine leverage is open. It will not stay open indefinitely — because in this race, everyone else is already running.
The Bottom Line
Lithium is the new oil. Rare earths are the new OPEC. And China already owns the refinery. The question for every other nation — including India — is whether they are building a seat at this table, or waiting to be told what they can order from it.
About the Author
Santhosh Vishwamitra
Founder, SVM Labs
Writer and analyst covering geopolitics, global trade, and the intersections of power and technology. Founder of SVM Labs. For web development and writing content, visit santhoshvishwamitrablog.wordpress.com.
Michael Elkan
© 2026 Vishwamitra Chronicles | Santhosh Vishwamitra. All rights reserved. Independent research, analysis, and educational publishing.