Critical minerals undergird great power competition and war. These nonfuel minerals and mineral materials are vital to countries’ defense industrial bases, enabling the production of military platforms like tanks as well as munitions and artillery shells. Therefore, mineral supplies can help sustain military power, while mineral shortages can severely undermine it. For example, the Allied powers’ control of most of the world’s minerals before World War II proved instrumental in their eventual victory over the Axis powers.
Minerals remain important for military power today. Iron is used in steel, which is necessary for military components like ship hulls and tank armor. Copper is commonly used in munitions such as bullets and artillery shells. And lithium and other minerals have gained further relevance due to their use in new energy technologies, like high-capacity batteries. The U.S. Army aims to field an entirely electric non-tactical light-duty vehicle fleet by 2027, and the army’s climate strategy emphasizes installing battery storage systems and generating renewable electricity on its bases.
Yet, the importance of these minerals also makes them a dangerous vulnerability if their supply chains are not secure—and unfortunately, the U.S. and other NATO militaries rely on defense industrial bases with vulnerable mineral supply chains. Given their limited domestic mineral production, both the United States and Europe depend heavily on mineral imports, including from rival powers like China, which supplies minerals such as graphite, rare earth elements, and other battery minerals, and Russia, which provides aluminum, nickel, and titanium. In June 2023, NATO Secretary General Jens Stoltenberg warned the alliance to avoid becoming overdependent on Chinese minerals, just as many NATO countries previously became overdependent on Russian gas. Additionally, the U.S. government holds limited mineral inventories in its National Defense Stockpile, while the European Union (EU) has walked back its plans to develop a centralized mineral stockpile.
Mineral supply chain risks are rising as the adoption of renewable energy technology increases mineral demand and as the rearmament efforts of the U.S. and allied militaries in support of Ukraine use more minerals. Coupled with limited production and stockpiles, the U.S. and other NATO militaries face three serious risks that could lead to mineral shortages: foreign export controls; rising military demand amid great power competition, including the possibility of a U.S.-China conflict; and disrupted sea-lanes. The United States and other NATO countries must act now to address these supply chain risks.
The Role of Minerals in World War II
The present mineral vulnerability of the United States and NATO contrasts with U.S. mineral dominance in a different period of great power competition: before and during World War II. According to geologist Charles K. Leith, the United States was “the world’s greatest owner, producer, seller and consumer of minerals” in 1938, controlling major mineral resources across Canada, Central America, and South America. Notably, the United States and the British Empire together controlled about 75 percent of global mineral supplies. The United States did, however, lack a substantial mineral stockpile before the war, although the 1939 Strategic and Critical Materials Stock Piling Act formally established a stockpiling plan with funding. Regardless, the United States in this period was a mineral powerhouse.
Despite the United States’ strong mineral position, the U.S. military experienced supply constraints before and during the war. First, the country faced export controls that reduced its access to foreign minerals. Before the war, for instance, Germany placed export restrictions on certain mineral products, such as copper sulfate. Interestingly, the United States also faced export controls from its geopolitical partners. In October 1940, Canada instituted a copper export ban that applied to the United States, except under certain conditions, like U.S. entities fulfilling munitions contracts for Allied countries.
At the same time, soaring military demand caused mineral shortages as production failed to keep pace with requirements. Amid the U.S. military buildup from 1940 to 1941, aluminum production, which was important for manufacturing aircraft, increased by 50 percent, but it still failed to meet the demand from planned aircraft manufacturing output. After the United States entered the war, increased manufacturing of bullets and artillery shells caused supply issues for copper, while heightened defense production overall triggered shortages of manganese, nickel, tin, and zinc.
During the war, U.S. mineral imports also faced disruption from contested sea-lanes. Axis submarine warfare impacted U.S. mineral imports from Asia, the Caribbean, and South America. For example, submarines sank South American bauxite cargoes headed to U.S. aluminum plants. Mineral imports from the western hemisphere that had previously been “considered reasonably safe, even in war,” as the U.S. Bureau of Mines’ Elmer W. Pehrson noted, were threatened. Despite the submarine threat, large volumes of minerals could still be imported, but those imports—along with domestic production—were insufficient to meet demand.
Similar Mineral Risks Today, but From a Weaker Position
Compared with the strong mineral position of the United States and its partners in great power competition before and during World War II, the U.S. military and NATO are in a far weaker position today (see figure 1).
The United States today relies on a greater share of mineral imports to meet domestic consumption, indicating a relative decline in U.S. mineral production compared with consumption. For some minerals, U.S. production has even stopped completely. The U.S. supply of niobium, which is used in steel and superalloys, “has been a concern during every national military emergency since World War I,” according to the U.S. Geological Survey, but the element has not been mined in the United States since 1959.
Mineral inventories in the U.S. National Defense Stockpile have also dwindled since the 1950s, hindering the stockpile’s ability to fully satisfy mineral demand for key U.S. sectors during a potential national emergency, such as a U.S.-China conflict. As of March 2023, the value of stockpile inventories was $912.3 million, just 1.2 percent of the stockpile’s 1962 value of approximately $77.1 billion (adjusted for inflation). In 2023, the Department of Defense estimated that the U.S. military in “base case” national emergency scenarios, such as a large-scale conventional U.S.-China conflict, would have shortfalls in sixty-nine materials. The current stockpile would cover only about 40 percent of the military’s projected shortfalls in a one-year conflict followed by three years of recovery and replenishment.
Other NATO countries and partners have limited mineral production and stockpiles, too. The EU imports between 75 and 100 percent of most metals it consumes, and neither the union nor its member states have mineral stockpiles—though the EU is now facilitating the joint purchasing of minerals by interested firms and member-states. Canada also does not have such a stockpile, and the United Kingdom discontinued its facility in 1984. The risks of limited—or nonexistent—strategic stockpiles became apparent during the 2021 global energy crisis, when the United Kingdom had enough natural gas stored to last only four to five winter days. For NATO countries generally, the situation is no better for the minerals critical for their militaries.
Today, the United States and its partners face risks to their critical mineral supply chains just as their militaries’ mineral demand is rising. These risks pose greater consequences now, as compared to before and during World War II, given NATO countries’ weaker mineral positions and China’s mineral dominance. The three main risks could lead to mineral shortages: foreign export controls; rising military demand amid great power competition, including a possible U.S.-China conflict; and disrupted sea-lanes.
First, foreign export controls are an urgent concern. China imposed a de facto ban on exporting graphite to Sweden in 2021 and placed restrictions on exporting gallium, germanium, and graphite to all countries in late 2023. Most U.S. imports of these minerals come from China, and Chinese gallium and germanium exports have indeed fallen significantly. In December 2023, Beijing banned the export of technology for making rare earth magnets. Conceivably, China could impose export controls on other minerals that the United States and other NATO countries import from China, like bismuth, tantalum, and rare earth elements.
Other countries, such as Russia, could also impose export controls that would impact NATO members’ mineral imports. A 2023 report by the Organisation for Economic Co-operation and Development found that Argentina, China, India, Kazakhstan, Russia, and Vietnam imposed the most new export restrictions on critical raw materials from 2009 to 2020. Throughout the Russia-Ukraine war, Russia has imposed export bans on a variety of mineral products, too, including, most recently, precious metal waste and scrap.
The second risk stems from increased allied production of defense platforms and munitions that contain minerals. This increased production is largely to replenish stocks of depleted matériel sent to support Ukraine in the Russia-Ukraine war. A 2023 report from the Hague Centre for Strategic Studies found that European countries face high or very high supply risks for several critical minerals with military applications, including aluminum, beryllium, chromium, copper, and natural graphite for towed artillery, which Ukraine heavily relies on.
The United States faces similar mineral shortage risks from its efforts to supply Ukraine militarily. The United States produced 28,000 155-millimeter artillery shells, which are made of various minerals, per month in 2023 but expects to produce 100,000 shells per month by the end of 2025. While the U.S. military has not released recent mineral consumption figures, previous periods of heightened U.S. military production increased mineral demand. During U.S. military mobilization in 1941, for instance, Pehrson wrote that U.S. mineral consumption “exceeded all previous records” and “reflected the rapid rate at which the United States was mobilizing for war.”
In a possible U.S.-China conflict, the United States and other NATO countries would face increased risks of mineral shortages, too. In war games simulating a U.S.-China conflict over Taiwan, the Center for Strategic and International Studies found that the U.S. military used 5,000 long-range missiles in the first three weeks of combat, which would increase demand for minerals used in missiles, such as steel alloys. While projecting mineral consumption in a U.S.-China conflict is difficult given limited open-source information on the material composition of defense platforms and munitions, the high rates of matériel attrition in the Russia-Ukraine war demonstrate how wartime demands often exceed expectations and available supply.
Third, increased tensions and possible conflict in the Taiwan Strait would disrupt sea-lanes that transport minerals from East Asia—a region from which the United States and other NATO countries import many minerals. Japan, which faced Chinese export controls on rare earth elements in 2010 after a collision between a Chinese fishing vessel and Japanese Coast Guard vessels, and South Korea are major mineral producers and maintain large stockpiles, yet the United States and NATO would struggle to access these resources if conflict broke out in East Asia. Australia and Canada are also major mineral producers, but they do not maintain critical mineral stockpiles. Like Japan and South Korea, Australia’s supply routes to the United States and other NATO countries could face disruption in a conflict encompassing the South China Sea. For the U.S. military, Canada is the only major mineral producer with a largely secure supply route to the United States.
Policy Recommendations
The U.S. government is taking steps to address risks to its mineral supply chains. The Department of Defense is seeking to increase U.S. mineral production by financially supporting domestic mineral producers, and Congress is authorizing and appropriating funds for new material acquisitions for the National Defense Stockpile. Furthermore, the National Defense Authorization Act for Fiscal Year 2024 directed the secretary of defense to secure critical minerals from “reliable sources” like Australia, and it added Australia and the United Kingdom to the list of countries eligible to receive priority funds for critical mineral projects, for example through the Defense Production Act.
But the United States and other NATO countries must do more. To begin, they should increase their mineral stockpiles, prioritizing minerals used by their militaries. For instance, bismuth is used in U.S. defense systems, but the U.S. government does not stockpile it. The United States and other NATO countries should stockpile minerals by procuring domestically produced minerals where reserves exist, to help facilitate domestic production. They should also consider prepaying for these minerals to help fund prospective mineral projects. The U.S. government and its allies could potentially fund these stockpiles through higher tariffs on imported minerals from China and Russia. In fact, a study group of U.S. mineral experts after World War I proposed tariffs to fund a U.S. antimony stockpile.
The United States and other NATO countries should also expand their efforts to increase domestic mining and recycling of minerals. The U.S. government has accelerated its critical mineral efforts through the Department of Defense and the Department of Energy, and it should continue its efforts with financial support for building new domestic mines, smelters, and refineries as well as expanding existing facilities and restarting idled ones. Mineral projects require significant upfront capital to build, take years to generate cash flow, and face environmental, social, and governance risks—all of which dissuade companies from investing millions, and potentially billions, in such projects.
Consequently, the U.S. and allied governments could fill a private sector gap by providing capital to these projects. The U.S. mineral industry also faces regulatory challenges and limited technical expertise, which could be partly addressed by statutory classification to prioritize critical minerals development on federal lands and increased funding for existing and new university programs in mining and mineral processing.
The U.S. government and other NATO countries should consider friendshoring production for minerals with limited domestic reserves, such as bismuth. Friendshoring is the process of relocating critical supply chains among geopolitical partners, and doing so would help reduce shortage risks for the minerals in question. The U.S. government and its partners are already pursuing mineral friendshoring initiatives, such as the Minerals Security Partnership, the Partnership for Global Infrastructure and Investment, and various bilateral agreements with countries including Australia, Japan, the Democratic Republic of the Congo, Zambia, and Canada. The success of these initiatives remains to be seen.
However, such international efforts prove challenging during great power competition, as many countries seek to increase mineral production domestically and decrease their mineral imports for economic and geopolitical reasons.
In any case, the United States and other NATO countries should prioritize friendshoring with countries with the greatest supply chain resilience. To illustrate, the United States should focus on partnering with countries that have overland routes to the United States; thus, lithium could be sourced from Argentina or Chile instead of Australia. The most secure friendshoring partner for the United States is Canada, which was a vital source of critical minerals during World War II. Today, however, Canada does not have the scope or scale of mineral reserves to completely satisfy U.S. demand.
In a possible U.S.-China conflict, overcoming mineral shortages may demand more than simply increasing available supply. The United States and other NATO countries should therefore consider mineral substitution and rationing to alleviate the pressure on the production of certain minerals. For example, depleted uranium can be substituted for alloyed steel in the production of 120-millimeter tank projectiles without a significant decrease in their effectiveness. In the case of a supply strain, the government could require defense contractors to replace alloyed steel with depleted uranium in that munitions class. During World War II, the U.S. military temporarily replaced brass—a copper-zinc alloy—with steel in cartridge cases; without such a substitution, the U.S. Navy said, it “probably would have been virtually impossible to wage a modern war with the supplies of copper . . . then available in this country.”
The history of the twentieth century suggests that absent such actions to strengthen mineral supply chains, the United States and NATO could be ill prepared for a world more reliant on batteries and renewable energy technologies—let alone a conflict with the world’s mineral superpower, China.