In an increasingly interconnected world, geopolitics plays a crucial role in the development of supply chains and the sourcing of raw materials. International conflicts, diplomatic tensions and economic sanctions directly influence access, costs and the stability of supply for key resources. This article explores how geopolitics is reshaping the global raw material trade landscape.
1. Dependence on Strategic Raw Materials
Many raw materials, such as oil, natural gas, rare earths and certain metals like lithium and cobalt, are essential to modern economies. These resources are often concentrated in politically unstable regions or controlled by a limited number of countries. For example:
- Rare earths: China dominates global production, accounting for nearly 70% of the supply. Trade tensions between China and the United States highlight the risks associated with excessive dependence.
- Natural gas: The Russia-Ukraine conflict has disrupted Europe’s energy supply, driving up prices and prompting an intensified search for alternatives.
2. Sanctions and Trade Restrictions
Economic sanctions imposed on certain raw material-producing countries have a significant impact on supply chains. For example:
- Iran: International sanctions limit oil exports, forcing importing countries to seek alternative suppliers.
- Russia: Restrictions imposed following the invasion of Ukraine have affected markets for oil, natural gas and even fertilizers.
These measures cause major disruptions as businesses must restructure their logistics chains to comply with new regulations.
3. Energy Transition and Geopolitical Rivalry
The shift toward a low-carbon economy is intensifying competition for raw materials used in green technologies. Lithium, cobalt and nickel, which are critical for electric battery manufacturing, have become strategic assets.
- Africa: Countries like the Democratic Republic of Congo, the world’s largest producer of cobalt, are at the center of rivalries between major powers.
- Latin America: The “Lithium Triangle” (Bolivia, Argentina, Chile) attracts foreign investors, but national protectionist policies complicate exploitation.
4. Source Diversification and Resilience
In the face of geopolitical risks, businesses and governments are working to diversify their sources of supply. This includes:
- Recycling: Promoting the recycling of raw materials to reduce dependence on imports.
- Strategic partnerships: Strengthening trade relations with stable and reliable countries.
- Localization: Investing in local or regional resource extraction to minimize external risks.
Conclusion
Geopolitics decisively shapes access to raw materials, creating challenges but also opportunities for businesses and governments. Diversification, international cooperation and technological innovation will be essential to ensuring supply security in an era of growing rivalry.