For nearly half a century, the global trading architecture operated under a convenient neoliberal fiction: that open markets, low tariffs and frictionless, just-in-time supply chains were politically neutral.
Today the insatiable demand for critical minerals, from lithium and cobalt to platinum group metals (PGMs) and rare earths, has shattered that illusion.
Geopolitical strategy, state security and resource sovereignty have dethroned mere cost efficiency as the primary drivers of international commerce.
We are witnessing a profound structural fracture: global trade is fragmenting into ideologically aligned mineral blocs, while resource-rich nations across the Global South are seizing their reserves to dismantle historically extractive terms of trade and assert true industrial agency.
The 20th century trade regime was anchored in liquid hydrocarbons, with global trade lanes drawn around oil pipelines, maritime chokepoints and tanker routes dominated by Opec and Western energy majors. In contrast, the 21st century energy transition and AI hardware ecosystem rely heavily on mineral refining, chemical synthesis and metallurgy.
Unlike oil, which features relatively distributed global refining, critical mineral supply chains exhibit extreme midstream concentration risk. According to UNCTAD research, a tiny cluster of countries controls the overwhelming majority of global extraction and processing.
South Africa sits at the epicentre of this global trade realignment, holding massive reserves of manganese, chrome and PGMs essential for green hydrogen and industrial tech. However, the country faces a critical structural imperative
China, in particular, maintains a dominant market share in magnet rare earth refining, battery-grade lithium and cobalt chemical processing. From a critical analysis standpoint, this concentration has transformed refining capacity into a strategic geopolitical lever, dismantling the neoliberal premise that global supply chains naturally optimise for security and stability.
In response to structural vulnerabilities, developed economies are leveraging aggressive trade policy and state intervention to build preferential, ideologically aligned supply corridors.
Western initiatives such as the US Inflation Reduction Act, the EU Critical Raw Materials Act and the Minerals Security Partnership (MSP) FORGE platform condition tax credits, market access and state subsidies on minerals extracted or processed within “friendly” allied nations.
Consequently the World Trade Organisation’s multilateral framework is being bypassed in favour of bilateral critical mineral pacts, strategic off-take agreements and price-support mechanisms like binding price floors. This dual-bloc fragmentation replaces open multilateralism with weaponised interdependence, where trade rules are dictated by political capital rather than comparative advantage.
Historically resource-rich developing nations occupied a subordinate position in the global division of labour relegated to exporting cheap raw materials while importing expensive finished goods. Mineral-rich nations across the Global South are systematically rejecting this “extract-and-export” model. UNCTAD data highlights a sharp surge in national export bans, quotas and licensing restrictions aimed at capturing midstream value.
Indonesia imposed raw nickel export bans and moratoriums on unrefined processing plants, forcing foreign automotive and battery firms to build domestic smelters.
Zimbabwe instituted bans on raw lithium concentrate exports alongside export quotas, compelling Chinese and Western investors to process lithium sulphate locally. The Democratic Republic of Congo (DRC) enforced cobalt export quotas to regulate market supply and capture higher battery value locally.
The critical minerals boom is not merely a resource rush; it is a fundamental rewrite of the rules of global trade, replacing neoliberal open markets with geopolitical alignment, local industrialisation and resource sovereignty
By leveraging regional blocs like the African Union (AU) and ASEAN, resource-endowed nations are coordinating trade stances to shift from passive suppliers to active industrial hubs.
South Africa sits at the epicentre of this global trade realignment, holding massive reserves of manganese, chrome and PGMs essential for green hydrogen and industrial tech. However, the country faces a critical structural imperative. It must rapidly address domestic energy reliability and rail infrastructure bottlenecks — or risk being bypassed as capital shifts toward jurisdictions capable of handling energy-intensive midstream processing.
Diplomatically, South Africa’s leadership under its G20 Presidency championing the G20 Critical Minerals Framework positioned the nation as a vital bridge. By advocating for value retention, technology transfer and equitable trade rules, South Africa is mediating between Western capital requirements and the African continent’s demand for true resource sovereignty.
The critical minerals boom is not merely a resource rush; it is a fundamental rewrite of the rules of global trade, replacing neoliberal open markets with geopolitical alignment, local industrialisation and resource sovereignty.
Under traditional market dynamics, buyers could easily substitute commodities or switch suppliers to drive down costs. Critical minerals such as lithium, cobalt, manganese, PGMs and rare earths are non-substitutable hardware foundations for the green energy transition, AI data centres and advanced defence systems.
Because geological reserves are heavily concentrated in specific Global South jurisdictions, Western and East Asian industrial powerhouses face an inescapable physical reality: they cannot innovate around geography. This turns physical possession of reserves into direct geopolitical leverage.
By implementing deliberate state interventions such as raw mineral export bans, licensing quotas and processing mandates, nations like Indonesia (nickel), Zimbabwe (lithium) and the DRC (cobalt) are breaking this cycle. They are forcing multinational corporations to build refineries, smelters and manufacturing ecosystems locally as the mandatory price of admission.
Global South nations no longer must accept take-it-or-leave-it terms from a single Western-dominated market framework. Instead they can play competing powers against one another
Other African nations and several major Latin American and Southeast Asian states have implemented strict export bans, state monopolies or mandatory local processing laws to capture value. These also include:
Ghana (lithium & bauxite);Chile (lithium);Guinea (bauxite & iron ore);Namibia (lithium and rare earths); and Mexico (lithium).
The fragmentation of global trade into competing power structures such as Western-led MSP corridors vs Chinese midstream dominance and expanded Brics networks eliminates the traditional Western monopsony.
Global South nations no longer must accept take-it-or-leave-it terms from a single Western-dominated market framework. Instead they can play competing powers against one another, demanding direct infrastructure investment, technology transfer and local equity stakes in exchange for long-term off-take access.
Historically individual developing countries were isolated and forced into a “race to the bottom” on environmental standards and royalty rates.
Today regional and multilateral platforms such as the AU’s Green Minerals Strategy, ASEAN and South Africa’s advocacy for the G20 Critical Minerals Framework enable collective bargaining.
By standardising export rules, royalty structures and local content requirements across entire regions, the Global South prevents foreign capital from pitting one mineral-rich state against another.
Cengani is a political studies master’s graduate from Nelson Mandela University
Sowetan